REGISTRATION RIGHTS AGREEMENT
by and between
eSpeed, Inc.
and
The Investors Named Herein
TABLE OF CONTENTS
Page
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Article I. DEMAND REGISTRATIONS...................................................................................1
1.1 Requests for Registration................................................................................1
1.2 Number of Demand Registrations; Expenses.................................................................1
1.3 Effective Registration Statement.........................................................................2
1.4 Priority on Demand Registrations.........................................................................2
1.5 Selection of Underwriter.................................................................................2
1.6 Limitations, Conditions and Qualifica-tions to Obligations for a Demand Registration.....................2
Article II. PIGGYBACK REGISTRATIONS...............................................................................3
2.1 Right to Piggyback.......................................................................................3
2.2 Piggyback Expenses.......................................................................................4
2.3 Priority on Primary Registrations........................................................................4
2.4 Priority on Secondary Registrations......................................................................4
Article III. HOLDBACK AGREEMENTS..................................................................................4
Article IV. REGISTRATION PROCEDURES...............................................................................5
Article V. REGISTRATION EXPENSES..................................................................................7
5.1 Registration Expenses....................................................................................7
5.2 Holders' Expenses........................................................................................7
Article VI. UNDERWRITTEN AND OTHER OFFERINGS......................................................................8
6.1 Underwriting Agreement...................................................................................8
6.2 Obligations of Participants..............................................................................8
Article VII. INDEMNIFICATION......................................................................................8
7.1 Company's Indemnification Obligations....................................................................8
7.2 Holder's Indemnification Obligations.....................................................................9
7.3 Notices; Defense; Settlement............................................................................10
7.4 Indemnity Provision.....................................................................................11
Article VIII. DEFINITIONS........................................................................................11
8.1 Terms...................................................................................................11
8.2 Defined Terms in Corresponding Sections.................................................................12
Article IX. MISCELLANEOUS........................................................................................13
9.1 Amendments and Waivers..................................................................................13
9.2 Successors and Assigns..................................................................................13
9.3 Notices.................................................................................................13
9.4 Headings................................................................................................14
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9.5 Gender..................................................................................................14
9.6 Invalid Provisions......................................................................................14
9.7 Governing Law; Forum; Process...........................................................................15
9.8 Counterparts............................................................................................15
9.9 Additional Investors....................................................................................15
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REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of July 30,
2001, by and among eSpeed, Inc., a Delaware corporation (the "Company"),
Deutsche Bank AG (the "Initial Investor") and such other parties that otherwise
execute a joinder agreement and become a party hereto (collectively, the
"Investors").
RECITALS
WHEREAS, the Company desires to grant to the Initial Investor
registration rights with respect to the shares (the "Shares") of Class A Common
Stock underlying the warrants to purchase shares of Class A Common Stock (the
"Warrants") issuable upon conversion or redemption of the Company's Series C
Convertible Preferred Stock of the Company (the "Preferred Stock") issued to the
Initial Investor on the date hereof, on the terms and subject to the conditions
set forth herein.
NOW THEREFORE, in consideration of the mutual covenants and agreements
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree as follows:
Article I.
DEMAND REGISTRATIONS
1.1 Requests for Registration. Subject to Sections 1.2 and 1.3 hereof,
the Initial Investor may request, in writing, registration under the Securities
Act of all of their Registrable Securities. Within 15 days after receipt of any
such request, the Company will give notice of such request to all other
Investors and to other persons holding piggyback registration rights entitling
them to have securities of the Company included within such registration ("Other
Holders"). Thereafter, the Company will use all commercially reasonable efforts
to effect the registration under the Securities Act on Form S-3 or any similar
short-form registration statement (a "Short-Form Registration"), and will
include in such registration all Registrable Securities and securities of the
Company held by the Other Holders with respect to which the Company has received
written requests for inclusion therein within 20 days after the receipt of the
Company's notice, subject to the provisions of Section 1.4. All registrations
initiated by an Initial Investor pursuant to this Section 1.1 are referred to
herein as "Demand Registrations". The Company shall not be required to effect
any Demand Registration requested by an Initial Investor if within the 12 months
preceding the receipt by the Company of such request, the Company has filed and
has had declared effective by the Commission another Registration Statement to
which the Piggyback Registration rights set forth in Article II hereof apply and
such Initial Investor had an opportunity to include all the shares requested to
be included in such Registration Statements. The rights of an Initial Investor
pursuant to this Section 1.1 shall be assignable in accordance with the
provisions of Section 9.9.
1.2 Number of Demand Registrations; Expenses. Subject to Sections 1.1
and 1.3 hereof, the Initial Investor shall be entitled to, from and after the
five year anniversary of the date hereof, one Demand Registration; provided,
however, that all of the Preferred Stock shall have been fully converted into
Warrants. The Company will pay all Registration Expenses in connection with any
Demand Registration.
1.3 Effective Registration Statement. A registration requested pursuant
to Section 1.1 of this Agreement shall not be deemed to have been effected (i)
unless a Registration Statement with respect thereto has been declared effective
by the Commission, (ii) if after it has become effective, such registration 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, and, as a
result thereof, the Registrable Securities covered thereby have not been sold or
(iii) the Registration Statement does not remain effective for a period of at
least 60 days beyond the effective date thereof or, with respect to an
underwritten offering of Registrable Securities, until 60 days after the
commencement of the distribution by the holders of the Registrable Securities
included in such Registration Statement (or such shorter period which will
terminate when all Registrable Securities covered by such Registration Statement
have been sold, but not prior to the expiration of the applicable period
referred to in Section 4(3) of the Securities Act and Rule 174 thereunder, if
applicable). If a registration requested pursuant to this Article I is deemed
not to have been effected as provided in this Section 1.3, then the Company
shall continue to be obligated to effect the number of Demand Registrations set
forth in Section 1.2 without giving effect to such requested registration.
1.4 Priority on Demand Registrations. If the Company includes in any
underwritten Demand Registration any securities which are not Registrable
Securities and the managing underwriters determine in good faith and
consequently advise the Company that in their opinion the number of securities
proposed to be included in such registration exceeds the number which can be
sold in such offering and would materially and adversely affect the success of
such offering, the Company will include in such registration (i) first, the
number of Registrable Securities requested to be included which, in the opinion
of such underwriters, can be sold, by the Investor initiating the Demand
Registration, (ii) second, that number of other shares of Common Stock proposed
to be included in such registration equally between Cantor ▇▇▇▇▇▇▇▇▇▇ Securities
and its Affiliates, and their successors and assigns ("Cantor") and (iii) third,
that number of other shares of Common Stock proposed to be included in such
registration, pro rata among any other holders exercising their respective
piggyback registration rights thereof based upon the total number of shares
which such holders propose to include in such registration.
1.5 Selection of Underwriter. If the Company so elects, the offering of
such Registrable Securities pursuant to such Demand Registration shall be in the
form of an underwritten offering. The Company shall select one or more
nationally recognized firms of investment bankers to act as the lead managing
Underwriter or Underwriters in connection with such offering and shall select
any additional investment bankers and managers to be used in connection with the
offering.
1.6 Limitations, Conditions and Qualifications to Obligations for a
Demand Registration. The Company shall be entitled to postpone, for a reasonable
period of time (but not exceeding 90 days), the filing of any registration
statement otherwise required to be prepared and filed by it pursuant to Section
1.1 if the Company determines, in its good faith judgment, that such
registration and offering would interfere with any material financing,
acquisition, corporate reorganization or other material transaction involving
the Company or any of its Affiliates and promptly gives the holders of
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Registrable Securities requesting registration thereof pursuant to Section 1.1
written notice of such determination, containing an approximation of the
anticipated delay. If the Company shall so postpone the filing of a registration
statement, holders of Registrable Securities requesting the Demand Registration
pursuant to Section 1.1 shall have the right to withdraw the request for
registration by giving written notice to the Company within 30 days after
receipt of the notice of postponement and, in the event of such withdrawal, such
request shall not be counted for purposes of the request for registration to
which holders of Registrable Securities are entitled pursuant to Section 1.1
hereof.
Article II.
PIGGYBACK REGISTRATIONS
2.1 Right to Piggyback. From and after the date which is twelve months
from the date of this Agreement, whenever the Company proposes to register any
of its equity securities under the Securities Act (other than a registration
effected in connection with a stock option or other employee benefit
arrangements of the Company or its affiliates (such as a Registration Statement
on Form S-8), a registration effected in connection with the conversion of debt
securities, a registration on any form that does not include substantially the
same information as would be required to be included in a registration statement
covering the sale of Registrable Securities (such as a Registration Statement on
Form S-4), or a registration effected in connection with an acquisition), and
the form of registration statement to be used may be used for the registration
of Registrable Securities (a "Piggyback Registration"), the Company will give
notice (the "Notice") to all Investors of its intention to effect such a
registration and will include in such registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein, subject to the provisions of Section 2.3 and 2.4 hereof. Such requests
for inclusion shall be in writing and delivered to the Company within five
business days after the Investor's receipt of the Notice and shall specify the
number of Registrable Securities intended to be disposed of and the intended
method of distribution thereof; provided, however, that the Company will use
commercially reasonable efforts to extend the time in which the Investor must
provide such written request for inclusion to the extent that such extension
does not impede the Company's ability to have the registration statement
declared effective or otherwise move forward in the registration offering or
sale process. Any holder shall have the right to withdraw its request for
inclusion of its Registrable Securities in any Registration Statement pursuant
to this Section 2.1 by giving written notice to the Company of its request to
withdraw. The Company may withdraw a Piggyback Registration at any time prior to
the time it becomes effective. The Company is not required to include in a
registration any Registrable Securities which the holder is not then entitled to
offer to sell whether by contractual restriction or by law. If a holder decides
not to include all of its Registrable Securities in any registration statement
filed by the Company, such holder shall nevertheless continue to have the right
to include any Registrable Securities in any subsequent registration statement
or registration statements as may be filed by the Company with respect to
offerings of its securities, all upon the terms and conditions set forth herein.
2.2 Piggyback Expenses. The Registration Expenses of the Investors will
be paid by the Company in all Piggyback Registrations.
2.3 Priority on Primary Registrations. If a Piggyback Registration is
an underwritten primary registration on behalf of the Company, and the managing
underwriters determine in good faith and consequently advise the Company that in
their opinion the number of securities requested to be included in such
registration exceeds the number which can be sold
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in such offering and would materially and adversely affect the success of such
offering, the Company will include in such registration (i) first, the
securities the Company proposes to sell, (ii) second, that number of other
shares of Common Stock proposed to be included in such registration by Cantor
and (iii) third, that number of other shares of Common Stock proposed to be
included in such registration, pro rata among any other holders (including the
Investors) exercising their respective piggyback registration rights thereof
based upon the total number of shares which such holders (including the
Investors) propose to include in such registration.
2.4 Priority on Secondary Registrations. If a Piggyback Registration is
an underwritten secondary registration on behalf of holders (other than the
Investors) of the Company's securities, and the managing underwriters determine
in good faith and consequently advise the Company that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering and would materially and adversely
affect the success of such offering, the Company will include in such
registration (i) first, the number of shares of Common Stock requested to be
included by the holders exercising their demand registration rights, (ii)
second, that number of other shares of Common Stock proposed to be included in
such registration by Cantor, (iii) third, that number of other shares of Common
Stock proposed to be included in such registration, pro rata among any other
holders (including the Investors) exercising their respective piggyback
registration rights thereof based upon the total number of shares which such
holders (including the Investors) propose to include in such registration.
Article III.
HOLDBACK AGREEMENTS
In the event the Company or another holder of the Company's stock
proposes to enter into an underwritten public offering, each holder of
Registrable Securities agrees to enter into an agreement with the managing
underwriters not to effect any sale or distribution of equity securities of the
Company, or any securities convertible, exchangeable or exercisable for or into
such securities, during the period beginning on the date of such offering and
extending for up to 90 days or such shorter period specified by the managing
underwriters; provided that such holders shall not be so obligated unless (x)
the Company and each of its Affiliates enter into the same or comparable lock-up
agreement for the same period and (y) either such holder then owns less than 5%
or such holder is participating in such underwritten public offering of the
outstanding Class A Common Stock.
Article IV.
REGISTRATION PROCEDURES
Whenever holders of Registrable Securities have requested that any
Registrable Securities be registered pursuant to this Agreement (the "Selling
Holders"), the Company will use commercially reasonable efforts to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof and, pursuant thereto, the Company will:
(a) use commercially reasonable efforts to prepare and file with the
Commission a Registration Statement with respect to such Registrable Securities
as soon as
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practicably thereafter and use all commercially reasonable efforts to cause such
Registration Statement to become and remain effective until the completion of
the distribution contemplated thereby; provided, that as promptly as practicable
before filing a Registration Statement or Prospectus or any amendments or
supplements thereto, the Company will (i) furnish to the Selling Holders copies
of all such documents proposed to be filed and (ii) notify each Selling Holder
of Registrable Securities covered by such Registration Statement of (x) any
request by the Commission to amend such Registration Statement or amend or
supplement any Prospectus, or (y) any stop order issued or threatened by the
Commission, and take all commercially reasonable actions required to prevent the
entry of such stop order or to promptly remove it if entered; and provided
further that the Company shall not be required to keep such Registration
Statement effective for more than 60 days (or such shorter period which will
terminate when all Registrable Securities covered by such Registration Statement
have been sold, but not prior to the expiration of the applicable period
referred to in Section 4(3) of the Securities Act and Rule 174 thereunder, if
applicable);
(b) (i) prepare and file with the Commission such amendments and
supplements to such Registration Statement and the Prospectus used in connection
therewith as may be necessary to keep such Registration Statement effective for
as long as such registration is required to remain effective pursuant to the
terms hereof and (ii) comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such Registration
Statement during such period in accordance with the intended methods of
disposition by the sellers thereof set forth in such Registration Statement;
(c) furnish to each Selling Holder, without charge, such number of
conformed copies of such Registration Statement, each amendment and supplement
thereto, the Prospectus included in such Registration Statement (including each
preliminary Prospectus) and such other documents as such seller may reasonably
request in order to facilitate the disposition of the Registrable Securities
owned by such Selling Holder;
(d) use all commercially reasonable efforts to register or qualify such
Registrable Securities under such other securities or "blue sky" laws of such
jurisdictions in the United States in which a registration or qualification is
required as any Selling Holder thereof shall reasonably request, to keep such
registration or qualification in effect for so long as such Registration
Statement remains in effect and do any and all other acts and things which may
be reasonably necessary or advisable to enable such Selling Holder to consummate
the disposition in such jurisdictions of the Registrable Securities owned by
such Selling Holder; provided, however, that the Company will not be required to
(i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this clause (d), (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of process
in any such jurisdiction;
(e) notify each Selling Holder, at a time when a Prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event known to the Company as a result of which the Prospectus included
in such Registration Statement, as then in effect, contains an untrue statement
of a material fact or omits to state any fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and, at the request of any such
Selling Holder, the
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Company will prepare and furnish such Selling Holder a reasonable number of
copies of a supplement to or an amendment of such Prospectus as may be necessary
so that, as thereafter delivered to the purchasers of such Registrable
Securities, such Prospectus shall not include an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading;
(f) make available for inspection by any Selling Holder, any
underwriter participating in any disposition pursuant to such Registration
Statement and any attorney, accountant or other agent retained by any such
Selling Holder or underwriter, all applicable, non-confidential due diligence
documents of the Company which are requested, and cause the Company's officers,
directors, employees and independent accountants to supply all information
reasonably requested by any such seller, underwriter, attorney, accountant or
agent in connection with such Registration Statement to enable them to conduct a
reasonable investigation within the meaning of the Securities Act, including a
customary accountant's "comfort" letter and opinion of counsel to the Company;
(g) subject to other provisions hereof, use its commercially reasonable
efforts to cause such Registrable Securities covered by such Registration
Statement to be registered with or approved by such other governmental agencies
or authorities or self-regulatory organizations as may be necessary to enable
the Selling Holders thereof to consummate the disposition of such Registrable
Securities;
(h) promptly notify the Selling Holders of the issuance of any stop
order by the Commission or the issuance by any state securities commission or
other regulatory authority of any order suspending the qualification or
exemption from qualification of any of the Registrable Securities under state
securities or "blue sky" laws, and use every commercially reasonable effort to
obtain the lifting at the earliest possible time of any stop order suspending
the effectiveness of any Registration Statement or of any order preventing or
suspending the use of any preliminary Prospectus; and
(i) promptly notify the Selling Holders of the occurrence of any
pending material merger, acquisition, corporate reorganization or other material
transaction involving the Company or any of its Affiliates which makes it
imprudent for the Company to be in registration, as determined in the good faith
judgment of the Company (a "Black-Out Period"). The Company shall not impose
Black-Out Periods that, either individually or in the aggregate, exceed 90 days
during any fiscal year of the Company.
The Company may require each Selling Holder to promptly furnish in
writing to the Company such information regarding the distribution of the
Registrable Securities as the Company may from time to time reasonably request
and such other information as may be legally required in connection with such
registration including, without limitation, all such information as may be
requested by the Commission or any regulatory authority. The Company may exclude
from such Registration Statement any holder who fails to provide such
information within a reasonable time period.
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Each Selling Holder agrees that, upon receipt of any notice from the
Company of the happening of any event of the kind described in paragraph (a),
(e), (h) or (i) above, such Selling Holder will forthwith discontinue
disposition of Registrable Securities pursuant to the Registration Statement
covering such Registrable Securities until such Selling Holder's receipt of the
copies of the supplemented or amended prospectus contemplated by paragraph (a)
or (e) above, or in the case of a Black-Out Period until the Company notifies
the Selling Holders that the period has ended, and, if so directed by the
Company, such Selling Holder will deliver to the Company all copies, other than
permanent file copies then in such Selling Holder's possession, of the most
recent prospectus covering such Registrable Securities at the time of receipt of
such notice. The periods referred to in paragraph (a) above for maintaining the
effectiveness of the Registration Statement shall be extended for a period equal
to the period during which the disposition of the Registrable Securities is
discontinued as set forth in the immediately preceding sentence.
Article V.
REGISTRATION EXPENSES
5.1 Registration Expenses. All registration, qualification and filing
fees, fees and expenses of compliance with all securities or "blue sky" laws,
printing expenses, listing fees for securities to be registered on a national
securities exchange or The Nasdaq Stock Market and all independent certified
public accountants, underwriters (excluding discounts and commissions), fees and
expenses of counsel to the Company and other Persons retained by the Company
(all such expenses being herein called "Registration Expenses") will be borne by
the Company as provided in Section 1.2 and Section 2.2 of this Agreement.
5.2 Holders' Expenses. The Company shall have no obligation to pay (i)
any underwriting discounts or commissions attributable to the sale, or potential
sale, of Registrable Securities, which expenses will be borne by all Selling
Holders of Registrable Securities included in such registration; and (ii) any
fees or expenses of counsel or others retained by the Selling Holders in
connection with the sale, or potential sale, of Registrable Securities, other
than up to $20,000 for legal fees incurred by the Selling Holders for their
retention of a single law firm in connection with the sale of Registrable
Securities in any Piggyback Registration or Demand Registration.
Article VI.
UNDERWRITTEN AND OTHER OFFERINGS
6.1 Underwriting Agreement. If requested by the underwriters for any
underwritten offering involving the Registrable Securities, the Company will
enter into an underwriting agreement with such underwriters for such offering,
such agreement to be reasonably satisfactory to the Company and to contain such
representations and warranties by the Company and such other terms as are
generally included in agreements of this type, including, without limitation,
indemnities customarily included in such agreements. The holders of the
Registrable Securities will cooperate in good faith with the Company in the
negotiation of the underwriting agreement.
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6.2 Obligations of Participants. No Person may participate in any
underwritten registration hereunder unless such Person (i) agrees to sell such
Person's securities on the basis provided in any underwriting arrangements
approved by the Person or Persons entitled hereunder to approve such
arrangements and (ii) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements, escrow agreements and other
documents reasonably required under the terms of such underwriting arrangements
and consistent with the provisions of this Agreement. In addition, the Company
may require each Selling Holder to promptly furnish in writing to the Company
such information regarding the distribution of the Registrable Securities as the
Company may from time to time reasonably request and such other information as
may be legally required in connection with such registration including, without
limitation, all such information as may be requested by the Commission or the
NASD. The Company may exclude from such Registration Statement any Holder who
fails to provide such information within a reasonable time period.
Article VII.
INDEMNIFICATION
7.1 Company's Indemnification Obligations. The Company agrees to
indemnify and hold harmless each of the holders of any Registrable Securities
covered by any Registration Statement referred to herein, the partners, officers
and directors of each holder, and each other Person, if any, who controls such
holder within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act (collectively, the "Holder Indemnitees"), as follows:
(i) against any and all loss, liability, claim, damage or
reasonable expense arising out of or based upon an untrue statement or alleged
untrue statement of a material fact contained in any Registration Statement (or
any amendment or supplement thereto), including all documents incorporated
therein by reference, or in any preliminary Prospectus or Prospectus (or any
amendment or supplement thereto) or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and
reasonable expense to the extent of the aggregate amount paid in settlement of
any litigation, investigation or proceeding by any governmental agency or body,
commenced or threatened, or of any claim based upon any such untrue statement or
omission or any such alleged untrue statement or omission, if such settlement is
effected with the prior written consent of the Company; and
(iii) against any and all reasonable expense incurred by them in
connection with investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim based upon any such untrue statement or omission or any
such alleged untrue statement or omission, to the extent that any such expense
is not paid under clause (i) or (ii) above;
provided, that this indemnity does not apply to any loss, liability, claim,
damage or expense to the extent arising out of an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with information furnished to the Company
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by or on behalf of any holder expressly for use in the preparation of any
Registration Statement (or any amendment or supplement thereto), including all
documents incorporated therein by reference, or in any preliminary Prospectus or
Prospectus (or any amendment or supplement thereto); provided further, that
(other than in connection with an underwritten offering) the Company will not be
liable to any holder or any other Holder Indemnitee under the indemnity
agreement in this Section 7.1 with respect to any preliminary Prospectus or the
final Prospectus or the final Prospectus as amended or supplemented, as the case
may be, to the extent that any such loss, liability, claim, damage or expense of
such Holder Indemnitee results from the fact that such holder sold Registrable
Securities to a Person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the final Prospectus or of the
final Prospectus as then amended or supplemented, whichever is most recent, if
the Company has previously and timely furnished copies thereof to such holder;
and provided further, that the Company will not be liable to any holder or any
other Holder Indemnitee under the indemnity agreement in this Section 7.1 to the
extent that any such loss, liability, claim or expense arises out of or is based
upon an untrue statement or omission in any Prospectus, even if an amended and
corrected Prospectus is not furnished to such holder, but only to the extent
that the holder, after being notified by the Company pursuant to paragraph (e)
of Article IV hereof, continues to use such Prospectus and in such case and to
the extent of, and with respect to, damages which arise after the holder
receives such notice.
7.2 Holder's Indemnification Obligations. In connection with any
Registration Statement in which a holder of Registrable Securities is
participating, each such holder agrees to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 7.1 of this
Agreement) the Company its officers and directors and each Person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act with respect to any statement or alleged
statement in or omission or alleged omission from such Registration Statement,
any preliminary, final or summary Prospectus contained therein, or any amendment
or supplement thereto, if such statement or alleged statement or omission or
alleged omission was made about such holder in reliance upon and in conformity
with information furnished to the Company by or on behalf of such holder
expressly for inclusion in such Registration Statement. The obligations of each
holder pursuant to this Section 7.2 are to be several and not joint; provided
that, with respect to each claim pursuant to this Section 7.2, each such
holder's maximum liability under this Section shall be limited to an amount
equal to the net proceeds received by such holder (after deducting any
underwriting discount) from the sale of Registrable Securities being sold
pursuant to such Registration Statement or Prospectus by such holder.
7.3 Notices; Defense; Settlement. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding involving a claim referred to in Section 7.1 or Section 7.2 of
this Agreement, such indemnified party will, if a claim in respect thereof is to
be made against an indemnifying party, give written notice to the latter of the
commencement of such action; provided, that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under Section 7.1 or Section 7.2 of this Agreement except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
the indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified,
to the extent that it
9
may wish, with counsel reasonably satisfactory to such indemnified party, and
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof, unless in the
reasonable opinion of counsel to such indemnified party a conflict of interest
between such indemnified and indemnifying parties may exist in respect of such
claim, in which case the indemnifying party shall not be liable for the fees and
expenses of (i) more than one counsel for all the Selling Holders, selected by a
majority of the Selling Holders or (ii) more than one counsel for the Company in
connection with any one action or separate but similar or related actions, as
applicable. An indemnifying party who is not entitled to, or elects not to,
assume the defense of a claim will not be obligated to pay the fees and expenses
of more than one counsel for all parties indemnified by such indemnifying party
with respect to such claim, unless in the reasonable opinion of counsel to any
indemnified party a conflict of interest may exist between such indemnified
party and any other of such indemnified parties with respect to such claim, in
which event the indemnifying party shall be obligated to pay the fees and
expenses of such additional counsel or counsels. The indemnifying party will
not, without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not such indemnified party or any Person who
controls such indemnified party is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability arising out
of such claim, action, suit or proceeding. Notwithstanding anything to the
contrary set forth herein, and without limiting any of the rights set forth
above, in any event any party will have the right to retain, at its own expense,
counsel with respect to the defense of a claim.
7.4 Indemnity Provision. The Company and each holder of Registrable
Securities requesting registration shall provide for the foregoing indemnity
(with appropriate modifications) in any underwriting agreement with respect to
any required registration or other qualification of securities under any Federal
or state law or regulation of any governmental authority.
Article VIII.
DEFINITIONS
8.1 Terms. As used in this Agreement, the following defined terms shall
have the meanings set forth below:
"Affiliate" means, with respect to any specified party, any other
individual, partnership, corporation or other organization, whether incorporated
or unincorporated, who, directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such specified party. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a party, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative of the foregoing.
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"Business Day" means a day other than Saturday, Sunday or any day
on which banks located in the State of New York are authorized or obligated to
close.
"Class A Common Stock" means the Class A Common Stock, par value
$.01 per share, of the Company and any securities into which the Class A Common
Stock shall have been changed or any securities resulting from any
reclassification or recapitalization of the Class A Common Stock.
"Commission" means the U.S. Securities and Exchange Commission.
"Common Stock" means the shares of Common Stock, regardless of
designation, of the Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar Federal statute then in effect, and any reference to a
particular section thereof shall include a reference to the equivalent section,
if any, of any such similar Federal statute, and the rules and regulations
thereunder.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means any individual, corporation, partnership,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Prospectus" means the Prospectus included in any Registration
Statement (including without limitation, a Prospectus that disclosed information
previously omitted from a Prospectus filed as part of an effective Registration
Statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any Prospectus supplement, with respect to the terms
of the offering of any portion of the securities covered by such Registration
Statement, and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or deemed
to be incorporated by reference in such Prospectus.
"Registrable Securities" means (i) the Class A Common Stock issued
or issuable at any time upon the exercise of the Warrants, and (ii) any
securities issued or received in respect of, or in exchange or in substitution
for any of the foregoing. Registrable Securities will continue to maintain their
status as Registrable Securities in the hands of a transferee from an Investor
of a majority of the Registrable Securities held by such Investor provided such
transferee executes a joinder agreement described by Section 9.9. After the
transfer (in one or more transactions) of a majority of the Registrable
Securities held by an Investor, any remaining Registrable Securities held by
such Investor shall cease to be Registrable Securities. As to any particular
Registrable Securities, such securities will cease to be Registrable Securities
when they (w) have been effectively registered under the Securities Act and
disposed of in accordance with the registration statement covering them, (x) may
be sold pursuant to Rule 144 under the Securities Act without volume or manner
of sale limitation (or any similar provisions then in force), (y) have been
otherwise transferred and the Company has delivered a new certificate or other
evidence of ownership for such securities not bearing a restrictive legend and
not subject to any stop order and such securities may be publicly resold by the
Person receiving such certificate
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without complying with the registration requirements of the Securities Act, or
(z) have ceased to be outstanding
"Registration Statement" means any Registration Statement of the
Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.
"Securities Act" means the Securities Act of 1933, as amended, or
any similar Federal statute then in effect, and any reference to a particular
section thereof shall include a reference to a comparable section, if any, of
any such similar Federal statute, and the rules and regulations thereunder.
8.2 Defined Terms in Corresponding Sections. The following defined
terms, when used in this Agreement, shall have the meaning ascribed to them in
the corresponding Sections of this Agreement listed below:
"Agreement" -- Preamble
"Cantor" -- Section 1.4
"Company" -- Preamble
"Demand Registration" -- Section 1.1
"Holder Indemnitees" -- Section 7.1
"Initial Investor" -- Preamble
"Investors" -- Preamble
"Notice" -- Section 2.1
"Piggyback Registration" -- Section 2.1
"Preferred Stock" -- Recitals
"Registration Expenses" -- Section 5.1
"Selling Holder" -- Article III
"Short-Form Registration" -- Section 1.1
"Warrants" -- Recitals
Article IX.
MISCELLANEOUS
9.1 Amendments and Waivers. Except as otherwise provided herein, no
modification, amendment or waiver of any provision of this Agreement will be
effective against the Company or any holder of Registrable Securities, unless
such modification, amendment or waiver is approved in writing by the Company and
the Initial Investor or its transferee of a majority of the Registable
Securities pursuant to Section 9.9 hereof. The failure of any party to enforce
any of the provisions of this Agreement will in no way be construed as a waiver
of such
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provisions and will not affect the right of such party thereafter to enforce
each and every provision of this Agreement in accordance with its terms.
9.2 Successors and Assigns. All covenants and agreements in this
Agreement by or on behalf of any of the parties hereto will bind and inure to
the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not.
9.3 Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally against written receipt or by facsimile transmission or mailed by
pre-paid registered or certified mail, return receipt requested or mailed by
overnight courier prepaid to the parties at the following addresses or facsimile
numbers:
If to the Company, to:
eSpeed, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: General Counsel
with a copy to:
▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP
The Chrysler Building
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
If to any Investor, to the address set forth
on the signature page hereto,
Attention: General Counsel,
Copy: ▇▇▇▇ ▇▇▇▇.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 9.3, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 9.3, be deemed given upon receipt of confirmation,
(iii) if delivered by mail in the manner described above to the address as
provided in this Section 9.3, be deemed given on the earlier of the third full
Business Day following the day of mailing or upon receipt, and (iv) if delivered
by overnight courier to the address provided in this Section 9.3, be deemed
given on the earlier of the first Business Day following the date sent by such
overnight courier or upon receipt. Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
9.4 Headings. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
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9.5 Gender. Whenever the pronouns "he" or "his" are used herein they
shall also be deemed to mean "she" or "hers" or "it" or "its" whenever
applicable. Words in the singular shall be read and construed as though in the
plural and words in the plural shall be construed as though in the singular in
all cases where they would so apply.
9.6 Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (iv) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible.
9.7 Governing Law; Forum; Process. This Agreement shall be governed by
and construed in accordance with the internal laws of the State of New York,
without giving effect to principles of conflicts of law. Each of the parties
hereto hereby irrevocably and unconditionally submits to the exclusive
jurisdiction of any court of the State of New York or any federal court sitting
in the State of New York for purposes of any suit, action or other proceeding
arising out of this Agreement (and agrees not to commence any action, suit or
proceedings relating hereto except in such courts). Each of the parties hereto
agrees that service of any process, summons, notice or document by U.S.
registered mail at its address set forth herein shall be effective service of
process for any action, suit or proceeding brought against it in any such court.
Each of the parties hereto hereby irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement, which is brought by or against it, in the courts of the State
of New York or any federal court sitting in the State of New York and hereby
further irrevocably and unconditionally waives and agrees not to plead or claim
in any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
9.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
9.9 Additional Investors. Any transferee of a majority of Registrable
Securities held by an Investor shall be entitled to the benefits of this
Agreement, upon execution by such transferee of a joinder agreement in form
reasonably satisfactory to the Company stating that such transferee agrees to be
bound by the terms hereof as an "Investor". An Investor shall no longer be
entitled to the benefits of this Agreement upon its transfer (in one or more
transactions) of a majority of the Registrable Securities held by such Investor.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
COMPANY:
eSPEED, INC.
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
INITIAL INVESTOR:
DEUTSCHE BANK AG
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇▇
Title: Managing Director
Address: ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇▇▇▇
-----------------------------
Name: ▇▇▇▇ ▇▇▇▇
Title: Director
Address: ▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
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