efc7-1487_sc13da.htm

INTRODUCTION.

This Schedule 13D Statement (this “Statement”) is filed on behalf of (i) MatlinPatterson FA Acquisition LLC, a Delaware limited liability company (“Matlin FA”), (ii) MatlinPatterson Global Opportunities Partners II L.P. (“Matlin Partners (Delaware)”), a Delaware limited partnership, (iii) MatlinPatterson Global Opportunities Partners (Cayman) II L.P. (“Matlin Partners (Cayman)” and, together with Matlin Partners (Delaware), the “Matlin Partners”), a Cayman Islands limited partnership, (iv) MatlinPatterson Global Advisers LLC (“Matlin Advisers”), a Delaware limited liability company, by virtue of its investment authority over securities held by each of the Matlin Partners, (v) MatlinPatterson Global Partners II LLC (“Matlin Global Partners”), a Delaware limited liability company, as the general partner of each of the Matlin Partners, (vi) MatlinPatterson Asset Management LLC (“Matlin Asset Management”), a Delaware limited liability company, as the holder of all of the membership interests in Matlin Global Partners and Matlin Advisers, (vii) MatlinPatterson LLC (“MatlinPatterson”), a Delaware limited liability company, as the holder of all of the membership interests in Matlin Asset Management, (vii) David J. Matlin and Mark R. Patterson each, as a holder of 50% of the membership interests in MatlinPatterson, and (viii) Christopher Pechock and Frank Plimpton, each an employee of Matlin Advisers, as the persons named in the Proxies described below. Matlin FA, Matlin Partners (Delaware), Matlin Partners (Cayman), Matlin Advisers, Matlin Global Partners, Matlin Asset Management, MatlinPatterson, David J. Matlin, Mark R. Patterson, Christopher Pechock and Frank Plimpton are collectively referred to in this Statement as the “Reporting Persons” and each is a “Reporting Person.” The purpose of this Statement is to disclose the beneficial ownership of the Reporting Persons in the common stock, par value $0.01 per share (“Common Stock”), of First Albany Companies Inc. (the “Issuer”).

ITEM 1. SECURITY AND ISSUER

The name of the issuer is First Albany Companies Inc. This Statement relates to the Issuer's common stock, par value $0.01 per share. The principal executive offices of the Issuer are located at 677 Broadway, Albany, New York 12207.

ITEM 2. IDENTITY AND BACKGROUND

The address of the principal office of each Reporting Person is:

c/o MatlinPatterson Global Advisers LLC

520 Madison Avenue

New York, New York 10022

(i) Matlin FA is a limited liability company organized under the laws of Delaware. The principal business of Matlin FA is to invest in equity and debt securities of companies.

(ii) Matlin Partners (Delaware) is a limited partnership organized under the laws of Delaware. Matlin Partners (Cayman) is a limited partnership organized under the laws of the Cayman Islands. Each of Matlin Partners (Delaware) and Matlin Partners (Cayman) are in the business of investing in equity and debt securities of companies.

(iii) Matlin Advisers is a limited liability company organized under the laws of Delaware. The principal business of Matlin Advisers is to serve as investment adviser to Matlin Partners (Delaware) and Matlin Partners (Cayman).

(iv) Matlin Global Partners is a limited liability company organized under the laws of Delaware. The principal business of Matlin Global Partners is to serve as General Partner of Matlin Partners (Delaware) and Matlin Partners (Cayman).

(v) Matlin Asset Management is a limited liability company organized under the laws of Delaware. Matlin Asset Management is the holder of all the membership interests in Matlin Global Partners and Matlin Advisers. Matlin Asset Management's principal business is owning Matlin Global Partners and Matlin Advisers.

(vi) MatlinPatterson is a limited liability company organized under the laws of Delaware. MatlinPatterson is the holder of all of the membership interests in Matlin Asset Management. MatlinPatterson's principal business is owning Matlin Asset Management.

(vii) David J. Matlin and Mark R. Patterson are each the holder of 50% of the membership interests in MatlinPatterson. David J. Matlin's principal occupation is acting as Chief Executive Officer of Matlin Advisers and Mark R. Patterson's principal occupation is acting as Chairman of Matlin Advisers. David J. Matlin and Mark R. Patterson are both citizens of the United States of America.

(viii) Christopher Pechock and Frank Plimpton are each employees of Matlin Advisers. The principal occupation of each of them is providing services to Matlin Advisers in relation to the making and management of investments. Christopher Pechock and Frank Plimpton are both citizens of the United States of America.

(ix) In the past five years, none of the Reporting Persons have been (a) convicted in a criminal proceeding (other than traffic violations or similar misdemeanors) or (b) party to a civil proceeding of a judicial or administrative body of competent jurisdiction in which it was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws nor has it been found to have violated such laws.

ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION

On May 14, 2007, Matlin FA entered into an Investment Agreement (the “Investment Agreement”) with the Issuer providing for the purchase (the “Share Purchase”) by Matlin FA and certain co-investors which may be designated by it (individually or collectively, the “Purchasers”), upon the terms and subject to the conditions of the Investment Agreement, of 33,333,333 newly issued shares of the Issuer’s Common Stock, for an aggregate cash purchase price of $50 million. The number of shares issuable to the Purchasers in consideration of the $50 million purchase price is subject to upward adjustment based on the Issuer’s net tangible book value per share at closing and certain other factors. Upon closing of the Share Purchase, and after giving effect to certain related issuances of restricted stock units to certain employees of the Issuer,, the Purchasers would own approximately 60% of the outstanding Common Stock (58% of the Common Stock, on a fully diluted basis). The Share Purchase is expected to close in the third quarter of 2007.

Under applicable NASDAQ rules, the Share Purchase is subject to approval by the Issuer’s shareholders. The Issuer has agreed to, as soon as practicable, prepare appropriate proxy materials, submit them to its shareholders and hold a special shareholders’ meeting for the purpose of obtaining approval by its shareholders of the transactions contemplated by the Investment Agreement and certain related matters.

On May 14, 2007, Messrs. George McNamee and Alan Goldberg, directors of the Issuer, and Mr. McNierney (each, a “ Stockholder “ and collectively, the “ Stockholders “), entered into voting agreements with Matlin FA (each, a “ Voting Agreement “ and collectively, the “ Voting Agreements “) pursuant to which the Stockholders agreed, among other things, to vote the shares of Common Stock beneficially owned by them (including any such shares of Common Stock acquired after the date of execution of the Voting Agreements upon the exercise of any stock options, warrants or similar instruments or otherwise) in favor of the Share Purchase and as directed by Matlin FA on certain ancillary matters. Pursuant to the Voting Agreements, each Stockholder granted to Christopher Pechock and Frank Plimpton, employees of Matlin Advisers, irrevocable proxies (the “Proxies”) to vote the shares of Common Stock beneficially owned by such Stockholders.

The Stockholders are currently the beneficial owners of an aggregate of 3,054,976 shares of Common Stock that are subject to the Voting Agreements and the Proxies. This Schedule 13D is being filed with respect to these shares of Common Stock. These shares of Common Stock are separate from the shares of Common Stock proposed to be acquired by Matlin FA pursuant to the Investment Agreement.

The Stockholders entered into the Voting Agreements and granted the Proxies as an inducement for Matlin FA to enter into and perform the Investment Agreement. None of the Reporting Persons has paid any additional consideration in connection with the execution and delivery of the Voting Agreements or the Proxies.

References to, and descriptions of, the Voting Agreements and the Proxies are qualified in their entirety by reference to the Voting Agreements and the attached Proxies which are included as Exhibit 3, and are incorporated herein in their entirety where such references and descriptions appear.

The above summary of the Investment Agreement does not purport to be complete and is qualified in its entirety by the full text of such agreement, a copy of which is attached as Exhibit 10.1 to the Issuer’s Report on Form 8-K filed on May 15, 2007 and is incorporated into this Item 3 by reference.

ITEM 4. PURPOSE OF TRANSACTION

The information set forth in Item 3 hereof is hereby incorporated by reference into this Item 4. The Reporting Persons (through Matlin FA) intend to consummate the Share Purchase as provided in the Investment Agreement upon satisfaction of various closing conditions, including without limitation, approval of the Share Purchase by the Issuer’s shareholders, NASD and other regulatory approvals and third party consents.

Pursuant to the Voting Agreements, the Stockholders, who beneficially own in the aggregate 3,054,976 shares of Common Stock, which represents approximately 19% of the shares of Common Stock deemed to be outstanding pursuant to Rule 13d-3(d)(1) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and approximately 19% of the currently outstanding voting power of the Issuer, have agreed, among other things (i) to vote their shares of Common Stock (a) in favor of the Share Purchase and certain related Shareholder Approvals (as defined in the Voting Agreements) , (ii) not to solicit, encourage or recommend to other shareholders of the Issuer that (w) they vote their shares of Common Stock in any contrary manner, (x) they refrain from voting their shares, (y) they tender, exchange or otherwise dispose of their shares of Common Stock pursuant to a “Competing Transaction” (as defined in the Voting Agreements), or (z) they attempt to exercise any statutory appraisal or other similar rights they may have, (iii) unless otherwise instructed in writing by Matlin FA, to vote their shares against any Competing Transaction” (as defined in the Voting Agreements) and (iv) not to, and not to permit any of their employees, attorneys, accountants, investment bankers or other agents or representatives to, initiate, solicit, negotiate, encourage, or provide confidential information in order to facilitate any Competing Transaction. The Voting Agreements expire at the earlier of: (i) the Closing (as defined in the Investment Agreement), (ii) the due and proper termination of the Investment Agreement in accordance with its terms, or (iii) the mutual consent of Matlin FA and each Stockholder.

The purpose of the Voting Agreements is to increase the likelihood that the Share Purchase and the other Shareholder Approvals referred to in the Investment Agreement will be approved by the shareholders of the Issuer at the shareholders meeting to be called by the Issuer to consider such matters pursuant to the Investment Agreement.

In the Investment Agreement, the Issuer has agreed that, on or prior to the Closing Date (as defined in the Investment Agreement), the Issuer will cause the size of its board of directors to be increased from seven to nine and to cause those of its current directors designated by Matlin FA to resign. The remaining directors are to appoint individuals designated by Matlin FA to fill the resulting vacancies. Matlin FA currently intends to nominate to the board three representatives of Matlin FA and its affiliates, three other individuals nominated by, but otherwise unaffiliated with, Matlin FA or the other Purchasers, as well as Mr. Lee Fensterstock, Mr. Peter J. McNierney and one other current member of the board.

Mr. Fensterstock, a securities industry veteran associated with Matlin FA, is expected to be hired by the Issuer as its Chairman and Chief Executive Officer. Mr. McNierney, who is currently the Chief Executive Officer of the Issuer, would become its President and Chief Operating Officer.

Prior to the Closing Date under the Investment Agreement, Matlin FA and Mr. Fensterstock intend to develop a Strategic Plan in consultation with the Issuer’s current management for restoring the Issuer to profitability and taking maximum advantage of the additional capital that will be made available to the Issuer and its subsidiaries as a result of the Share Purchase.

The Reporting Persons intend to continuously evaluate the Issuer's businesses and prospects, alternative investment opportunities and all other factors deemed relevant in determining whether additional Common Stock of the Issuer will be acquired by the Reporting Persons. At any time, additional Common Stock may be acquired or some or all of any Common Stock of the Issuer beneficially owned by the Reporting Persons may be sold, in either case in the open market, in privately negotiated transactions or otherwise. Except as otherwise disclosed herein, no Reporting Person currently has any agreements, beneficially or otherwise, which would be related to or would result in any of the matters described in Items 4(a) - (j) of Schedule 13D; however, as part of the ongoing evaluation of this investment and investment alternatives, any Reporting Person may consider such matters, and, subject to applicable law, may formulate a plan with respect to such matters, and, from time to time, any Reporting Person may hold discussions with or make formal proposals to management or the board of directors of the Issuer, other shareholders of the Issuer or other third parties regarding such matters.

ITEM 5. INTEREST IN SECURITIES OF THE ISSUER

(a)-(b) As of the filing date of this Statement, Matlin FA and the other Reporting Persons do not own any shares of Common Stock. However, as a result of the Voting Agreements, the Reporting Persons may be deemed to have (i) beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) and (ii) shared power to vote or direct the vote of 3,054,976 shares of Common Stock, which represents approximately 19% of the shares of Common Stock deemed to be outstanding pursuant to Rule 13d-3(d)(1), subject to the conditions and limitations of the Voting Agreements.

The Reporting Persons disclaim beneficial ownership of any Common Stock. Neither the filing of this Statement nor any of its contents shall be deemed to constitute an admission that the Reporting Persons or any of their affiliates is the beneficial owner of any Common Stock for purposes of Section 13(d) of the Exchange Act or for any other purpose.

Except as disclosed in this Statement, none of the Reporting Persons is entitled to any rights of a stockholder of the Issuer. Except as disclosed in this Statement, none of the Reporting Persons has (i) sole or shared power to vote or direct the vote or (ii) sole or shared power to dispose or direct the disposition of Common Stock.

(c) Except as disclosed in this Statement, none of the Reporting Persons has effected any transaction in Common Stock during the past 60 days.

(d) Not applicable.

(e) Not applicable.

The filing of this Statement shall not be construed as an admission by any of the Reporting Persons that it is, for purposes of Section 13(d) of the Exchange Act, the beneficial owner of shares of Common Stock owned by other parties.

ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER

On March 20, 2007, Matlin Advisers and the Issuer entered into a confidentiality letter agreement (the “Confidentiality Agreement”). Among other things, the Confidentiality Agreement provides that for a period of one year from the date of such agreement, Matlin Partners (Delaware) and any of its affiliates will not (i) acquire, agree to acquire or make any proposal to acquire any securities or property of the Issuer, unless such acquisition, agreement or proposal shall have been expressly first approved by the Issuer’s board of directors, (ii) solicit proxies from shareholders of the Issuer or otherwise seek to influence or control the management or policies of the Issuer or any of its affiliates, or (iii) assist advise or encourage any other person in doing any of the foregoing. In addition, Matlin Partners (Delaware) agreed that for a period of two years from the date of such agreement, without the prior written consent of the Issuer, it, and any of its affiliates, will not solicit or cause to be solicited the employment of or hire any officer, director or employee of the Issuer or its subsidiaries or affiliates. References to, and descriptions of, the Confidentiality Agreement are qualified in their entirety by reference to the Confidentiality Agreement which is included as Exhibit 4, and is incorporated herein in its entirety where such references and descriptions appear.

Other than as described in Items 3, 4, 5 and 6 of this Statement, the Investment Agreement and the Voting Agreements incorporated herein by reference and set forth as exhibits hereto, to the knowledge of the Reporting Persons, there are no contracts, arrangements, understandings or relationships (legal or otherwise) among the Reporting Persons or between such persons and any other person with respect to the securities of the Issuer, including, but not limited to, transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies.

ITEM 7. MATERIAL TO BE FILED AS EXHIBITS

1 Joint Filing Agreement, dated as of May 25, 2007, among the Reporting Persons.

2 Investment Agreement, dated as of May 14, 2007, by and between First Albany Companies Inc. and MatlinPatterson FA Acquisition LLC (incorporated herein by reference to Exhibit 10.1 of the Issuer's Current Report on Form 8-K filed on May 15, 2007)

3 Voting Agreements and Proxies, dated as of May 7, 2007, entered into between MatlinPatterson FA Acquisition LLC and each of Messrs. George McNamee, Alan Goldberg and Peter J. McNierney.

4 Confidentiality letter agreement dated March 20, 2007 between MatlinPatterson Global Advisers LLC and First Albany Companies Inc..

SIGNATURES

After reasonable inquiry and to the best of our knowledge and belief, we certify that the information set forth in this Statement is true, complete and correct.

Dated: May 25, 2007

	MatlinPatterson FA Acquisition LLC

	By:	/s/ Robert A. Weiss
		Name: Robert A. Weiss
		Title:

	MATLINPATTERSON LLC

	By:	/s/ Mark R. Patterson
		Name: Mark R. Patterson
		Title: Member

	MATLINPATTERSON ASSET MANAGEMENT LLC

	By:	/s/ Mark R. Patterson
		Name: Mark R. Patterson
		Title: Chairman

	MATLINPATTERSON GLOBAL ADVISERS LLC

	By:	/s/ Mark R. Patterson
		Name: Mark R. Patterson
		Title: Chairman

	MATLINPATTERSON GLOBAL PARTNERS II LLC

	By:	/s/ Mark R. Patterson
		Name: Mark R. Patterson
		Title: Director

	MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS II L.P.

	By: MatlinPatterson Global Partners II LLC, its general partner

	By:	/s/ Mark R. Patterson
		Name: Mark R. Patterson
		Title: Director

	L.P.MATLINPATTERSON GLOBAL OPPORTUNITIES PARTNERS (Cayman) L.P.

	By: MatlinPatterson Global Partners II LLC, its general partner

	By:	/s/ Mark R. Patterson
		Name: Mark R. Patterson
		Title: Director

	DAVID J. MATLIN

	By:	/s/ David J. Matlin
		Name: David J. Matlin

	MARK R. PATTERSON

	By:	/s/ Mark R. Patterson
		Name: Mark R. Patterson

	FRANK PLIMPTON

	By:	/s/ Frank Plimpton
		Name: Frank Plimpton

	CHRISTOPHER PECHOCK

	By:	/s/ Christopher Pechock
		Name: Christopher Pechock

EXHIBIT INDEX

1 Joint Filing Agreement, dated as of May 25, 2007, among the Reporting Persons.

3 Voting Agreements and Proxies, dated as of May 7, 2007, entered into between MatlinPatterson FA Acquisition LLC and each of Messrs. George McNamee, Alan Goldberg and Peter J. McNierney.

4 Confidentiality letter agreement dated March 20, 2007 between MatlinPatterson Global Advisers LLC and First Albany Companies Inc..

[EXECUTION COPY]

VOTING AGREEMENT

THIS VOTING AGREEMENT (“Agreement”), dated as of May 14, 2007, is made by and among MATLINPATTERSON FA ACQUISITION LLC, a Delaware limited liability company (the “Investor”), and ALAN P. GOLDBERG (the “Shareholder”), an individual and a shareholder of First Albany Companies Inc., a New York corporation (the “Company”).

PRELIMINARY STATEMENTS

WHEREAS, the Company and Investor are entering into an Investment Agreement (the “Investment Agreement”), dated as of May 14, 2007, providing for the issuance and sale by the Company to the Purchasers (as defined therein), and the purchase by the Purchasers from the Company, of certain shares (the “Purchased Shares”) of the common stock, par value $.01 per share, of the Company (“Common Stock”) that upon issuance will represent a majority of the outstanding Common Stock (such purchase, being sometimes hereinafter referred to as the “Investment”) upon the terms and subject to the conditions set forth in the Investment Agreement (as defined in the Investment Agreement).

WHEREAS, the Investment, the Charter Amendment (as defined in the Investment Agreement) and certain other aspects of the Transactions (as defined in the Investment Agreement) (collectively, the “Shareholders Approvals”, as more fully defined in the Investment Agreement) are subject to the approval of the holders of the Common Stock as provided in the Investment Agreement and as required under the New York Business Corporation Law (the “NYBCL”) and NASDAQ rules.

WHEREAS, the Shareholder beneficially owns and has the power to direct the voting of the shares of Common Stock set forth opposite his name on Exhibit A hereto. As used herein, the term “Shares” includes all shares of such Common Stock of which the Shareholder at any time prior to the termination of this Agreement is the beneficial owner or is otherwise able to direct the voting thereof (including any such shares of Common Stock acquired after the date hereof upon the exercise of any stock options, warrants or similar instruments or otherwise) and all securities issued or exchanged with respect to any such Shares upon any reclassification, recapitalization, reorganization, merger, consolidation, spin-off, stock split, combination, stock or other dividend or any other change in the Company’s capital structure.

WHEREAS, to induce Investor to enter into the Investment Agreement and to consummate the Investment, the Shareholder has agreed, upon the terms and subject to the conditions set forth herein, in his capacity as a Shareholder of the Company, to vote his Shares in favor of each of the Shareholder Approvals.

NOW, THEREFORE, for good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties to this Agreement agree as follows:

1. Shareholders’ Representations and Warranties.

(a) The Shareholder represents and warrants to the Investor that the Shareholder (i) is the record (except as may be noted on Exhibit A hereto) beneficial owner of that number of Shares set forth opposite its name set forth on Exhibit A hereto, free and clear of any mortgage, pledge, lien, security interest, claim, restriction on voting or otherwise or other encumbrance and (ii) has the right to vote or to direct the voting of such Shares free of any restriction or limitation.

(b) Neither the execution and delivery of this Agreement nor the performance by the Shareholder of his obligations hereunder will result in a violation of, or a default under, or conflict with any contract, trust, commitment, agreement, understanding, arrangement or restriction of any kind to which the Shareholder is a party or by which the Shareholder is bound or to which the Shares are subject, except, as would not prevent, delay or otherwise materially impair the Shareholder’s ability to perform his obligations hereunder. Execution, delivery and performance of this Agreement by the Shareholder will not violate, or require any consent, approval or notice under, any provision of any judgment, order, decree, statute, law, rule or regulation applicable to the Shareholder or the Shares, except (x) for any reports under Sections 13(d) of the Exchange Act as may be required in connection with this Agreement and the transactions contemplated hereby or (y) as would not reasonably be expected to prevent, delay or otherwise materially impair the Shareholder’s ability to perform his obligations hereunder.

2. No Other Proxies or Voting Trusts. The Shareholder hereby revokes any and all proxies and voting instructions with respect to the Shares previously given by Shareholder and agrees that he will not grant or give any other proxies or voting instructions with respect to the voting of the Shares, enter into any voting trust or other arrangement or agreement with respect to the voting of the Shares (and if given or executed, such proxies, voting instructions, voting trust or other arrangement or agreement shall not be effective), or agree, in any manner, to vote the Shares for or against any proposal submitted to the Shareholders of the Company except in furtherance of the proposals set forth in paragraph 3.

3. Agreements with Respect to the Shares.

(a) The Shareholder agrees during the Term (as defined in Section 7 below) of this Agreement:

(i) to vote the Shares (x) in favor of each of the Shareholder Approvals at every meeting of the Shareholders of the Company at which such matters are considered and at every adjournment thereof, and in any other circumstances upon which a vote, consent or other approval (including by written consent) relating to the Investment Agreement and the Transactions contemplated thereby or the Charter Amendment or any of the other Shareholder Approvals is sought and (y) with respect to all other proposals submitted to the shareholders of the Company which, directly or indirectly, in any way relate to the Investment or any of the other Transactions contemplated by the Investment Agreement, in such manner as Investor may direct; and

(ii) not to solicit, encourage or recommend to other shareholders of the Company that (w) they vote their shares of Common Stock in any contrary manner, (x) they refrain from voting their shares, (y) they tender, exchange or otherwise dispose of their shares of Common Stock pursuant to a Competing Transaction (as hereinafter defined), or (z) they attempt to exercise any statutory appraisal or other similar rights they may have.

(b) Unless otherwise instructed in writing by the Investor, during the Term of this Agreement, Shareholder will vote the Shares against any Competing Transaction.

(c) Except with the prior written consent of the Investor, during the Term of this Agreement, the Shareholder agrees that the Shareholder will not, and shall use his reasonable best efforts not to permit any employee, attorney, accountant, investment banker or other agent or representative of the Shareholder to, initiate, solicit, negotiate, encourage, or provide confidential information in order to facilitate any Competing Transaction.

(d) No person executing this Agreement (or an affiliate thereof) who is or becomes during the Term of this Agreement a director of the Company makes any agreement or understanding herein in his capacity as such director. The Shareholder is executing this Agreement solely in its capacity as the record and beneficial owner of the Shareholder’s Shares.

(e) For purposes of this Agreement, a “Competing Transaction” means any of the following (other than the transactions expressly provided for in and to be effected pursuant to this Agreement): (i) any merger, reorganization, consolidation, share exchange, business combination, liquidation, dissolution, recapitalization or similar transaction involving the Company; (ii) any direct or indirect acquisition or purchase, in a single transaction or series of related transactions, of (x) 20% or more of the consolidated gross assets of the Company and the Subsidiaries (as defined in the Investment Agreement), taken as a whole, (y) 20% or more of any class of voting securities of the Company or any Subsidiary (or any debt or equity securities convertible into or exercisable or exchangeable for such amount of voting securities) or (z) 15% or more of any class of voting securities of the Company or any Subsidiary (or any debt or equity securities convertible into or exercisable or exchangeable for such amount of voting securities) if such securities carry the right, contractually or otherwise, to appoint or designate any member or members of the Board; or (iii) any tender offer or exchange offer that, if consummated, would result in any Person or “group” (within the meaning of Section 13(d)(3) of the Exchange Act) beneficially owning 20% or more of any class of voting securities of the Company.

4. Proxies. In furtherance of the foregoing, the Shareholder is granting to Christopher Pechock and Frank Plimpton, representatives of the Investor, and each of them, with full power of substitution, irrevocable proxies and powers of attorney (which may be in the form annexed hereto or such other form consistent with the terms hereof and thereof as Investor may specify) on the matters described in paragraph 3, and to execute and deliver any written consents to fulfill such Shareholder’s obligations under this Agreement. This proxy is coupled with an interest and is irrevocable until the end of the Term of this Agreement, at which time it shall terminate.

5. Effect of Stock Splits, Stock Dividends, Recapitalizations, Etc.. In the event of any stock split, stock dividend, merger, reorganization, recapitalization or other change in the capital structure of the Company affecting the Shares or the acquisition of shares of Common Stock or other voting securities of the Company by the Shareholder, the number of Shares listed on Exhibit A beside the name of Shareholder shall be adjusted appropriately and this Agreement and the obligations hereunder shall attach to any additional Shares or other voting securities of the Company issued to or acquired by the Shareholder.

6. Specific Performance. The Shareholder acknowledges that it will be impossible to measure in money the damage to Investor if the Shareholder fails to comply with the obligations imposed by this Agreement, and that, in the event of any such failure, Investor will not have an adequate remedy at law or in damages. Accordingly, the Shareholder agrees that injunctive relief or any other equitable remedy, in addition to any remedies at law or damages, is the appropriate remedy for any such failure and will not oppose the granting of any such remedy on the basis that Investor has an adequate remedy at law. The Shareholder agrees not to seek, and agrees to waive any requirement for, the securing or posting of a bond in connection with Investor seeking or obtaining such equitable relief.

7. Term of Agreement; Termination.

(a) The term of this Agreement shall commence on the date hereof and shall terminate upon the earlier to occur of (i) the Closing (as defined in the Investment Agreement), (ii) the due and proper termination of the Investment Agreement in accordance with its terms, or (iii) the mutual consent of the Investor and the Shareholder (such period from the date hereof until such termination is referred to herein as the “Term”). Upon such termination, no party shall have any further obligations or liabilities hereunder.

(b) The obligations of the Shareholder set forth in this Agreement shall not be effective or binding upon the Shareholder until after such time as the Investment Agreement is executed and delivered by the Investor and the Company.

8. Miscellaneous.

(a) Entire Agreement. This Agreement constitutes the entire agreement among the parties with respect to the subject matter of this Agreement and supersedes all prior written and oral and all contemporaneous oral agreements and understandings with respect to the subject matter of this Agreement.

(b) Notices. Any notice, request, instruction or other document to be given hereunder by any party to the others shall be in writing and shall be deemed to have been duly given on the next business day after the same is sent, if delivered personally or sent by telecopy or overnight delivery, or five calendar days after the same is sent, if sent by registered or certified mail, return receipt requested, postage prepaid, as set forth below, or to such other persons or addresses as may be designated in writing in accordance with the terms hereof by the party to receive such notice.

If to the Investor, to:

MatlinPatterson FA Acquisition LLC

c/o MatlinPatterson Global Advisers LLC

520 Madison Avenue, 35^th Floor

New York, New York 10022

Attention: General Counsel

Fax: (212) 651-4011

with a copy by fax or messenger or courier to:

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

Facsimile: (212) 839-5599

Attention: Duncan N. Darrow and Michael H. Yanowitch

If to Shareholder, to the address set forth below Shareholder’s name on Exhibit A.

(c) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York as applied to contracts made and fully performed in such state without giving effect to the principles of conflict of laws thereof. Each party to this Agreement (“Party”) submits to the jurisdiction of any state or federal court sitting in the County of New York in any dispute or action arising out of or relating to this Agreement and agrees that all claims in respect of such dispute or action may be heard and determined in any such court. Each Party also agrees not to bring any dispute or action arising out of or relating to this Agreement in any other court. Each Party agrees that a final judgment in any dispute or action so brought will be conclusive and may be enforced by action on the judgment or in any other manner provided at law (common, statutory or other) or in equity. Each Party waives any defense of inconvenient forum to the maintenance of any dispute or action so brought and waives any bond, surety, or other security that might be required of any other Party with respect thereto.

(d) Rules of Construction. The descriptive headings in this Agreement are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. Words used in this Agreement, regardless of the gender and number specifically used, shall be deemed and construed to include any other gender, masculine or feminine, or neuter, and any other number, singular or plural, as the context requires. As used in this Agreement, the word “including” is not limiting, and the word “or” is not exclusive.

(e) Parties in Interest. This Agreement shall be binding upon and inure solely to the benefit of the parties to this Agreement and their legal successors-in-interest, and nothing in this Agreement, express or implied, is intended to confer upon any other person any rights or remedies of any nature whatsoever under or by reason of this Agreement.

(f) Counterparts. This Agreement may be executed in one or more counterparts, and each of such counterparts shall for all purposes be deemed to be an original, but all such counterparts together shall constitute but one instrument.

(g) Assignment. No party hereto shall assign its rights and obligations under this Agreement or any part thereof, nor shall any party assign or delegate any of its rights or duties hereunder without the prior written consent of the other party, and any assignment made without such consent shall be void. Except as otherwise provided herein, this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

(h) Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of all the parties.

(i) Extension; Waiver. Any party to this Agreement may extend the time for the performance of any of the obligations or other acts of any of the other parties to this Agreement or waive compliance by any other party with any of the agreements or conditions contained herein or any breach thereof. Any agreement on the part of any party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed on behalf of such party.

(j) Severability. If any term, provision, covenant or restriction herein, or the application thereof to any circumstance, shall, to any extent, be held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions herein and the application thereof to any other circumstances shall remain in full force and effect, shall not in any way be affected, impaired or invalidated, and shall be enforced to the fullest extent permitted by law.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have duly executed this Voting Agreement on the date first above written.

THE INVESTOR:

MATLINPATTERSON FA ACQUISITION LLC

By:_________________________

Name:

Title:

THE SHAREHOLDER:

_______________________________

ALAN P. GOLDBERG

Exhibit A

Voting Agreement

Shares Subject to Voting Control; Notice Address

A. Shares of Common Stock Subject to Shareholder’s Voting Control

1,106,807 shares of Common Stock

B. Address for Notices

ALAN P. GOLDBERG

c/o First Albany Companies Inc.

677 Broadway

Albany, NY 12207

FORM OF

IRREVOCABLE PROXY AND POWER OF ATTORNEY

The undersigned hereby appoints Christopher Pechock and Frank Plimpton, and each of them separately, with full power of substitution, for and in the undersigned’s name, to vote, express consent or disapproval, or otherwise act in such manner (including pursuant to written consent, but excluding the right to assert, perfect and prosecute dissenters’ rights of appraisal) and upon such matters as Christopher Pechock and/or Frank Plimpton or their respective proxies or substitutes shall, in their sole discretion, deem proper with respect to all of the shares of Common Stock of First Albany Companies Inc., a New York corporation, owned beneficially or of record by the undersigned.

The proxy granted hereby shall be irrevocable and may be exercised at any meeting of Shareholders, notice of which is given, or in respect of any written consent which is solicited prior to the due and proper termination of, and subject to and in accordance with the terms and conditions of, the Voting Agreement, dated as of May 14, 2007, between the undersigned and Matlinpatterson FA Acquisition LLC. This proxy is coupled with an interest sufficient in law to support such proxy.

Dated: May 14, 2007

___________________________

ALAN P. GOLDBERG

[EXECUTION COPY]

VOTING AGREEMENT

THIS VOTING AGREEMENT (“Agreement”), dated as of May 14, 2007, is made by and among MATLINPATTERSON FA ACQUISITION LLC, a Delaware limited liability company (the “Investor”), and GEORGE C. MCNAMEE (the “Shareholder”), an individual and a shareholder of First Albany Companies Inc., a New York corporation (the “Company”).

PRELIMINARY STATEMENTS

NOW, THEREFORE, for good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties to this Agreement agree as follows:

1. Shareholders’ Representations and Warranties.

3. Agreements with Respect to the Shares.

(a) The Shareholder agrees during the Term (as defined in Section 7 below) of this Agreement:

(b) Unless otherwise instructed in writing by the Investor, during the Term of this Agreement, Shareholder will vote the Shares against any Competing Transaction.

7. Term of Agreement; Termination.

8. Miscellaneous.

If to the Investor, to:

MatlinPatterson FA Acquisition LLC

c/o MatlinPatterson Global Advisers LLC

520 Madison Avenue, 35^th Floor

New York, New York 10022

Attention: General Counsel

Fax: (212) 651-4011

with a copy by fax or messenger or courier to:

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

Facsimile: (212) 839-5599

Attention: Duncan N. Darrow and Michael H. Yanowitch

If to Shareholder, to the address set forth below Shareholder’s name on Exhibit A.

(h) Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of all the parties.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have duly executed this Voting Agreement on the date first above written.

THE INVESTOR:

MATLINPATTERSON FA ACQUISITION LLC

By:_________________________

Name:

Title:

THE SHAREHOLDER:

____________________________

GEORGE C. MCNAMEE

Exhibit A

Voting Agreement

Shares Subject to Voting Control; Notice Address

A. Shares of Common Stock Subject to Shareholder’s Voting Control

1,553,367 shares of Common Stock

B. Address for Notices

GEORGE C. MCNAMEE

c/o First Albany Companies Inc.

677 Broadway

Albany, NY 12207

FORM OF

IRREVOCABLE PROXY AND POWER OF ATTORNEY

Dated: May 14, 2007

___________________________

GEORGE C. MCNAMEE

[EXECUTION COPY]

VOTING AGREEMENT

THIS VOTING AGREEMENT (“Agreement”), dated as of May 14, 2007, is made by and among MATLINPATTERSON FA ACQUISITION LLC, a Delaware limited liability company (the “Investor”), and PETER MCNIERNEY (the “Shareholder”), an individual and a shareholder of First Albany Companies Inc., a New York corporation (the “Company”).

PRELIMINARY STATEMENTS

NOW, THEREFORE, for good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties to this Agreement agree as follows:

1. Shareholders’ Representations and Warranties.

3. Agreements with Respect to the Shares.

(a) The Shareholder agrees during the Term (as defined in Section 7 below) of this Agreement:

(b) Unless otherwise instructed in writing by the Investor, during the Term of this Agreement, Shareholder will vote the Shares against any Competing Transaction.

7. Term of Agreement; Termination.

8. Miscellaneous.

If to the Investor, to:

MatlinPatterson FA Acquisition LLC

c/o MatlinPatterson Global Advisers LLC

520 Madison Avenue, 35^th Floor

New York, New York 10022

Attention: General Counsel

Fax: (212) 651-4011

with a copy by fax or messenger or courier to:

Sidley Austin LLP

787 Seventh Avenue

New York, New York 10019

Facsimile: (212) 839-5599

Attention: Duncan N. Darrow and Michael H. Yanowitch

If to Shareholder, to the address set forth below Shareholder’s name on Exhibit A.

(h) Amendment. This Agreement may not be amended except by an instrument in writing signed on behalf of all the parties.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have duly executed this Voting Agreement on the date first above written.

THE INVESTOR:

MATLINPATTERSON FA ACQUISITION LLC

By:_________________________

Name:

Title:

THE SHAREHOLDER:

____________________________

PETER MCNIERNEY

Exhibit A

Voting Agreement

Shares Subject to Voting Control; Notice Address

A. Shares of Common Stock Subject to Shareholder’s Voting Control

394,802 shares of Common Stock

B. Address for Notices

PETER MCNIERNEY

c/o First Albany Companies Inc.

677 Broadway

Albany, NY 12207

FORM OF

IRREVOCABLE PROXY AND POWER OF ATTORNEY

Dated: May 14, 2007

___________________________

PETER MCNIERNEY

CUSIP NO. 318465101

SCHEDULE 13D
	NAME OF REPORTING PERSON
1	S.S. OR I.R.S IDENTIFICATION NO. OF ABOVE PERSON

	MatlinPatterson FA Acquisition LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a)	o
			(b)	o

3	SEC USE ONLY


4	SOURCE OF FUNDS

	AF, WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

				o
6	CITIZENSHIP OR PLACE OF ORGANIZATION

	Delaware
		7	SOLE VOTING POWER

			-0-
		8	SHARED VOTING POWER
	NUMBER OF
	SHARES		3,054,976
	BENEFICIALLY OWNED	9	SOLE DISPOSITIVE POWER
	BY EACH REPORTING
	PERSON		-0-
	WITH	10	SHARED DISPOSITIVE POWER

			3,054,976
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	3,054,976
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

				o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	18.9961%
14	TYPE OF REPORTING PERSON

	PN

CUSIP NO. 318465101

SCHEDULE 13D
	NAME OF REPORTING PERSON
1	S.S. OR I.R.S IDENTIFICATION NO. OF ABOVE PERSON

	MatlinPatterson Global Opportunities Partners II L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a)	o
			(b)	o

3	SEC USE ONLY


4	SOURCE OF FUNDS

	AF, WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

				o
6	CITIZENSHIP OR PLACE OF ORGANIZATION

	Delaware
		7	SOLE VOTING POWER

			-0-
		8	SHARED VOTING POWER
	NUMBER OF
	SHARES		3,054,976
	BENEFICIALLY OWNED	9	SOLE DISPOSITIVE POWER
	BY EACH REPORTING
	PERSON		-0-
	WITH	10	SHARED DISPOSITIVE POWER

			3,054,976
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	3,054,976
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

				o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	18.9961%
14	TYPE OF REPORTING PERSON

	CO

CUSIP NO. 318465101

SCHEDULE 13D
	NAME OF REPORTING PERSON
1	S.S. OR I.R.S IDENTIFICATION NO. OF ABOVE PERSON

	MatlinPatterson Global Opportunities Partners (Cayman) II L.P.
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a)	o
			(b)	o

3	SEC USE ONLY


4	SOURCE OF FUNDS

	AF, WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

				o
6	CITIZENSHIP OR PLACE OF ORGANIZATION

	Cayman Islands
		7	SOLE VOTING POWER

			-0-
		8	SHARED VOTING POWER
	NUMBER OF
	SHARES		3,054,976
	BENEFICIALLY OWNED	9	SOLE DISPOSITIVE POWER
	BY EACH REPORTING
	PERSON		-0-
	WITH	10	SHARED DISPOSITIVE POWER

			3,054,976
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	3,054,976
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

				o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	18.9961%
14	TYPE OF REPORTING PERSON

	PN

CUSIP NO. 318465101

SCHEDULE 13D
	NAME OF REPORTING PERSON
1	S.S. OR I.R.S IDENTIFICATION NO. OF ABOVE PERSON

	MatlinPatterson Global Partners II LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a)	o
			(b)	o

3	SEC USE ONLY


4	SOURCE OF FUNDS

	AF, WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

				o
6	CITIZENSHIP OR PLACE OF ORGANIZATION

	Delaware
		7	SOLE VOTING POWER

			-0-
		8	SHARED VOTING POWER
	NUMBER OF
	SHARES		3,054,976
	BENEFICIALLY OWNED	9	SOLE DISPOSITIVE POWER
	BY EACH REPORTING
	PERSON		-0-
	WITH	10	SHARED DISPOSITIVE POWER

			3,054,976
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	3,054,976
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

				o
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	18.9961%
14	TYPE OF REPORTING PERSON

	HC

CUSIP NO. 318465101

SCHEDULE 13D
	NAME OF REPORTING PERSON
1	S.S. OR I.R.S IDENTIFICATION NO. OF ABOVE PERSON

	MatlinPatterson Global Advisors LLC
2	CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP		(a)	o
			(b)	o

3	SEC USE ONLY


4	SOURCE OF FUNDS

	AF, WC
5	CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)

				o
6	CITIZENSHIP OR PLACE OF ORGANIZATION

	Delaware
		7	SOLE VOTING POWER

			-0-
		8	SHARED VOTING POWER
	NUMBER OF
	SHARES		3,054,976
	BENEFICIALLY OWNED	9	SOLE DISPOSITIVE POWER
	BY EACH REPORTING
	PERSON		-0-
	WITH	10	SHARED DISPOSITIVE POWER

			3,054,976
11	AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON

	3,054,976
12	CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES

				x
13	PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)

	18.9961%
14	TYPE OF REPORTING PERSON

	IA

	MATLINPATTERSON FA ACQUISITION LLC

	By:	/s/ Robert A. Weiss
		Name Robert A. Weiss
		Title

	MATLINPATTERSON LLC

	By:	/s/ Mark R. Patterson
		Name Mark R. Patterson
		Title Member

	CHRISTOPHER PECHOCK

	By:	/s/ Christopher Pechock
		Name Christopher Pechock


		Very truly yours,

		First Albany Companies Inc.

	By:	/s/
		Name: Peter J. McNierney
		Title: Chief Executive Officer