EXHIBIT 1
7,135,000 Shares
eSpeed, Inc.
Class A Common Stock
($.01 Par Value)
UNDERWRITING AGREEMENT
, 2001
UNDERWRITING AGREEMENT
, 2001
UBS Warburg LLC
Xxxxxx Brothers Inc.
X.X. Xxxxxx Securities Inc.
As Representatives of the several Underwriters
named in Schedule A hereto
c/o UBS Warburg LLC
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
eSpeed, Inc., a Delaware corporation (the "Company") and an
indirect subsidiary of Cantor Xxxxxxxxxx, X.X., a Delaware limited partnership
(the "Parent"), proposes to issue and sell to the underwriters named in Schedule
A annexed hereto (the "Underwriters") an aggregate of 2,500,000 shares of its
Class A Common Stock, $.01 par value (the "Common Stock"), Cantor Xxxxxxxxxx
Securities, a New York partnership (the "Selling Stockholder") and a subsidiary
of the Parent, proposes to sell to the Underwriters 4,500,000 shares of Common
Stock and certain warrantholders of the Company named in Schedule B annexed
hereto (the "Warrantholders") propose to sell an aggregate of 135,000 shares of
Common Stock upon exercise of their warrants (collectively, the "Firm Shares").
In addition, solely for the purpose of covering over-allotments, the Selling
Stockholder proposes to grant to the Underwriters the option to purchase from
the Selling Stockholder up to an additional 1,070,250 shares of Common Stock
(the "Additional Shares" and, collectively with the Firm Shares, the "Shares").
The Company, the Selling Stockholder and the Warrantholders are hereinafter
sometimes referred to collectively as the "Sellers." The Shares are described in
the Prospectus as defined below.
The Company has filed, in accordance with the provisions of
the Securities Act of 1933, as amended, and the rules and regulations thereunder
(collectively called the "Act"), with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (Reg. No. 333-55746)
including a prospectus, relating to the Shares. The Company has furnished to
you, for use by the Underwriters and by dealers, copies of one or more
preliminary prospectuses (each thereof being herein called a "Preliminary
Prospectus") relating to the Shares. Except where the context otherwise
requires, the registration statement, as amended when it becomes effective,
including all documents filed as a part thereof, and including any information
contained in a prospectus subsequently filed with the Commission pursuant to
Rule 424(b) under the Act and deemed to be part of the registration statement at
the time of effectiveness pursuant to Rule 430(A) under the Act and also
including any registration statement filed pursuant to Rule 462(b) under the
Act, is herein called the "Registration Statement," and the prospectus, in the
form filed by the Company with the Commission pursuant to Rule 424(b) under the
Act on or before the second business day after the date hereof (or such earlier
time as may be required under the Act) or, if no such filing is required, the
form of final prospectus included in the Registration Statement at the time it
became effective, is herein called the "Prospectus." Any reference herein to the
Registration Statement, a Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the documents incorporated by reference therein
pursuant to Form S-3 which were filed under the Exchange Act on or before the
Effective Date of the Registration Statement or the issue date of such
Preliminary Prospectus or the Prospectus, as the case may be; and any reference
herein to the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement, any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include the filing of any document under the Exchange Act
after the Effective Date of the Registration Statement, or the issue date of any
Preliminary Prospectus or the Prospectus, as the case may be, deemed to be
incorporated therein by reference.
The Company, the Parent, the Warrantholders, the Selling
Stockholder and the Underwriters agree as follows:
1. Sale and Purchase. Subject to such adjustments as you may
determine to avoid fractional shares, the Company hereby agrees, subject to all
the terms and conditions set forth herein, to issue and sell to each Underwriter
and, upon the basis of the representations, warranties and agreements of the
Sellers and the Parent herein contained and subject to all the terms and
conditions set forth herein, each Underwriter agrees, severally and not jointly,
to purchase from the Company, at a purchase price of $_____ per Share (the
"purchase price per share"), that number of Firm Shares which bears the same
proportion to the aggregate number of Firm Shares to be issued and sold by the
Company as the number of Firm Shares set forth opposite the name of such
Underwriter in Schedule A annexed hereto (or such number of Firm Shares
increased as set forth in Section 8 hereof) bears to the aggregate number of
Firm Shares.
Subject to such adjustments as you may determine to avoid
fractional shares, the Selling Stockholder hereby agrees, subject to all the
terms and conditions set forth herein, to sell to each Underwriter and, upon the
basis of the representations, warranties and agreements of the Sellers and the
Parent herein contained and subject to all the terms and conditions set forth
herein, each Underwriter agrees, severally and not jointly, to purchase from the
Selling Stockholder at the purchase price per share, that number of Firm Shares
which bears the same proportion to the aggregate number of Firm Shares to be
sold by the Selling Stockholder as the number of Firm Shares set forth opposite
the name of such Underwriter in Schedule A annexed hereto (or such number of
Firm Shares increased as set forth in Section 8 hereof) bears to the aggregate
number of Firm Shares.
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Subject to such adjustments as you may determine to avoid
fractional shares, each of the Warrantholders agrees, subject to all the terms
and conditions set forth herein, to sell to each Underwriter and, upon the basis
of the representations, warranties and agreements of the Sellers and the Parent
herein contained and subject to all the terms and conditions set forth herein,
each Underwriter agrees, severally and not jointly, to purchase from each of the
Warrantholders, at the purchase price per share, that number of Firm Shares
which bears the same proportion to the number of Firm Shares set forth opposite
the name of such Warrantholder in Schedule B annexed hereto as the number of
Firm Shares set forth opposite the name of such Underwriter in Schedule A
annexed hereto (or such number of Firm Shares increased as set forth in Section
8 hereof) bears to the aggregate number of Firm Shares.
The Company, the Warrantholders and the Selling Stockholder
are advised by you that the Underwriters intend (i) to make a public offering of
their respective portions of the Firm Shares as soon after the effective date of
the Registration Statement as in your judgment is advisable and (ii) initially
to offer the Firm Shares upon the terms set forth in the Prospectus. You may
from time to time increase or decrease the public offering price after the
initial public offering to such extent as you may determine.
The Selling Stockholder agrees, subject to all the terms and
conditions set forth herein, to sell to the Underwriters, and upon the basis of
the representations, warranties and agreements of the Sellers and the Parent
herein contained, the Underwriters shall have the right to purchase from the
Selling Stockholder, severally and not jointly, all or a portion of the
Additional Shares as may be necessary to cover over-allotments made in
connection with the offering of the Firm Shares, at the same purchase price per
share to be paid by the Underwriters to the Company, the Warrantholders and the
Selling Stockholder for the Firm Shares. This option may be exercised by you on
behalf of the several Underwriters at any time (but not more than once) on or
before the thirtieth day following the date hereof, by written notice to the
Selling Stockholder. Such notice shall set forth the aggregate number of
Additional Shares as to which the option is being exercised, and the date and
time when the Additional Shares are to be delivered (such date and time being
herein referred to as the additional time of purchase); provided, however, that
the additional time of purchase shall not be earlier than the time of purchase
(as defined below) nor earlier than the second business day(1) after the date on
which the option shall have been exercised nor later than the tenth business day
after the date on which the option shall have been exercised. The aggregate
number of Additional Shares to be sold to each Underwriter shall be the number
which bears the same proportion to the aggregate number of Additional Shares
being purchased as the number of Firm Shares set forth opposite the name of such
Underwriter on Schedule A hereto bears to the aggregate number of Firm Shares
(subject, in each case, to such adjustment as you may determine to eliminate
fractional shares).
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(1) As used herein "business day" shall mean a day on which the New York
Stock Exchange is open for trading.
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2. Payment and Delivery. Payment of the purchase price for the
Firm Shares shall be made to the Company, the Warrantholders and the Selling
Stockholder by Federal Funds immediately available wire transfer, against
delivery of the certificates for the Firm Shares to you through the facilities
of the Depository Trust Company for the respective accounts of the Underwriters.
Such payment and delivery shall be made at 10:00 A.M., New York City time, on
, 2001 (unless another time shall be agreed to by you and the Company
and the Selling Stockholder or unless postponed in accordance with the
provisions of Section 8 hereof). The time at which such payment and delivery are
actually made is hereinafter sometimes called the time of purchase. Certificates
for the Firm Shares shall be delivered to you in definitive form in such names
and in such denominations as you shall specify on the second business day
preceding the time of purchase. For the purpose of expediting the checking of
the certificates for the Firm Shares by you, the Company, the Warrantholders and
the Selling Stockholder agree to make such certificates available to you for
such purpose at least one full business day preceding the time of purchase.
Payment of the purchase price for the Additional Shares shall
be made at the additional time of purchase in the same manner and at the same
office as the payment for the Firm Shares. Certificates for the Additional
Shares shall be delivered to you in definitive form in such names and in such
denominations as you shall specify no later than the second business day
preceding the additional time of purchase. For the purpose of expediting the
checking of the certificates for the Additional Shares by you, the Selling
Stockholder agrees to make such certificates available to you for such purpose
at least one full business day preceding the additional time of purchase.
3. Representations and Warranties of the Company, the Parent,
the Warrantholders and the Selling Stockholder.
(i) The Company and the Parent jointly and severally
represent and warrant to each of the Underwriters that:
(a) the Company meets the requirements for use of Form S-3
under the Act; none of the Company, the Selling Stockholder or the
Parent has received, or has notice of, any order of the Commission
preventing or suspending the use of any Preliminary Prospectus, or
instituting proceedings for that purpose, and each Preliminary
Prospectus, at the time of filing thereof, conformed in all material
respects to the requirements of the Act; and when the Registration
Statement becomes effective, the Registration Statement and the
Prospectus will conform in all material respects with the provisions of
the Act, and the Registration Statement will not contain 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 not
misleading, and the Prospectus will not contain 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 light of the
circumstances under which they were made, not misleading; provided,
however, that each of the Company and the Parent makes no warranty or
representation with respect to any statement contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and
in conformity with information concerning the Underwriters (in their
capacity as such) and furnished in writing by or on behalf of any
Underwriter (in its capacity as such) through you (in your capacity as
representatives of the several Underwriters) to the Company expressly
for use in the Registration Statement or the Prospectus; and none of
the Company, the Selling Stockholder, the Parent nor any of their
respective affiliates has distributed any offering material in
connection with the offering or sale of the Shares other than the
Registration Statement, the Preliminary Prospectus, the Prospectus or
any other materials, if any, permitted by the Act;
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(b) as of the date of this Agreement, the Company has an
authorized capitalization as set forth under the heading entitled
"Actual" in the section of the Registration Statement and the
Prospectus entitled "Capitalization" and, as of the time of purchase
and the additional time of purchase, as the case may be, the Company
shall have an authorized capitalization as set forth under the heading
entitled "As Adjusted" in the section of the Registration Statement and
the Prospectus entitled "Capitalization"; all of the issued and
outstanding shares of capital stock of the Company have been duly and
validly authorized and issued and are fully paid and non-assessable,
have been issued in compliance in all material respects with all
federal and state securities laws and were not issued in violation of
any preemptive right, resale right, right of first refusal or similar
right;
(c) The documents incorporated by reference in the
Registration Statement, when they became effective or were filed with
the Commission, as the case may be, conformed in all material respects
to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and none of
such documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Registration Statement, when such documents become effective or are
filed with Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as
applicable, and the rules and regulations of the Commission thereunder
and will not contain 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 not misleading;
(d) the Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with the requisite corporate power and authority to own,
lease and operate its properties and conduct its business as described
in the Registration Statement;
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(e) the Company is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction where the ownership
or leasing of its properties or the conduct of its business requires
such qualification, except where the failure to so qualify would not
reasonably be expected to have a material adverse effect on the
business, operations, prospects, properties, condition (financial or
otherwise) or results of operation of the Company and the Subsidiaries
(as hereinafter defined) taken as a whole (a "Material Adverse
Effect"). The Company has no subsidiaries (as defined in the Act) other
than eSpeed Securities, Inc., eSpeed Government Securities, Inc.,
eSpeed International Limited, eSpeed Markets, Inc., eSpeed (Hong Kong)
Holdings I, Inc., eSpeed (Hong Kong) Holdings II, Inc., eSpeed (Hong
Kong) Limited, eSpeed (Australia) Pty Limited, eSpeed (Canada), Inc.
and eSpeed (Japan) Limited (collectively, the "Subsidiaries"); the
Company, directly or indirectly, owns 100% of the outstanding capital
stock of the Subsidiaries; other than the Subsidiaries, the Company
does not own, directly or indirectly, any shares of stock or any other
equity or long-term debt of any corporation or have any direct or
indirect equity interest or ownership of long-term debt in any firm,
partnership, joint venture, association or other entity, except for
TradeSpark, LP, in which the Company owns a 5% of the limited
partnership interest, Visible Markets and QV Trading; complete and
correct copies of the certificates of incorporation and of the bylaws
of the Company and the Subsidiaries and all amendments thereto have
been delivered to you; eSpeed Markets, Inc., eSpeed (Hong Kong)
Holdings I, Inc., eSpeed (Hong Kong) Holdings II, Inc., eSpeed (Hong
Kong) Limited, eSpeed (Australia) Pty Limited, eSpeed Canada, Inc. have
no material assets, liabilities, operations or properties; each
Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with the requisite corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Registration Statement; each Subsidiary is duly
qualified to do business as a foreign corporation in good standing in
each jurisdiction where the ownership or leasing of the properties or
the conduct of its business requires such qualification, except where
the failure to so qualify would not reasonably be expected to have a
Material Adverse Effect; all of the outstanding shares of capital stock
of each of the Subsidiaries have been duly authorized and validly
issued, are fully paid and non-assessable and are owned by the Company
subject to no security interest, other encumbrance or adverse claims;
no options, warrants or other rights to purchase, agreements or other
obligations to issue or rights to convert any obligation into shares of
capital stock or ownership interests in the Subsidiaries are
outstanding.
(f) the Company and each of the Subsidiaries are in compliance
in all material respects with the applicable laws, rules, regulations
and directives, and applicable orders, issued or administered by each
jurisdiction in which they conduct their respective businesses;
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(g) none of the Company or any of the Subsidiaries or the
Selling Stockholder or the Parent or any of their respective
subsidiaries is in breach or violation of, or in default under (nor has
any event occurred which with notice, lapse of time, or both would
result in any breach or violation of, or constitute a default under)
(each such breach, violation, default or event, a "Default Event"), (i)
its respective charter or by-laws or partnership agreement, as the case
may be, or (ii) in the performance or observance of any obligation,
agreement, covenant or condition contained in any license, permit,
indenture, mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any lease, contract or other
agreement or instrument to which the Company, the Selling Stockholder,
the Parent or any of their respective subsidiaries is a party or by
which any of them or any of their properties is bound or affected or
under any federal, state, local or foreign law, regulation or rule or
any decree, judgment or order applicable to the Company, the Selling
Stockholder, the Parent or any of their respective subsidiaries, other
than such Default Events as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect (A)
in the case of the Selling Stockholder and the Parent and their
respective subsidiaries (other than the Company and the Subsidiaries),
with respect to clause (i) and (B) in the case of the Company, the
Selling Stockholder and the Parent and their respective subsidiaries,
with respect to clause (ii); and the execution, delivery and
performance of this Agreement, the issuance and sale of the Shares and
the consummation of the transactions contemplated hereby does not
constitute and will not result in a Default Event under (x) any
provisions of the charter or by-laws of the Company or the partnership
agreements of the Selling Stockholder or the Parent or the charter or
by-laws or partnership agreements, as the case may be, any of their
respective subsidiaries or (y) under any provision of any license,
permit, indenture, mortgage, deed of trust, bank loan or credit
agreement or other evidence of indebtedness, or any lease, contract or
other agreement or instrument to which the Company, the Selling
Stockholder or the Parent or any of their respective subsidiaries is a
party or by which any of them or their respective properties may be
bound or affected, or under any federal, state, local or foreign law,
regulation or rule or any decree, judgment or order applicable to the
Company, the Selling Stockholder or the Parent or any of their
respective subsidiaries, except for such Default Events as would not,
individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect (a) in the case of the Selling Stockholder and
the Parent and their respective subsidiaries (other than the Company
and the Subsidiaries), with respect to clause (x) and (b) in the case
of the Company, the Selling Stockholder and the Parent and their
respective subsidiaries, with respect to clause (y);
(h) this Agreement has been duly authorized, executed and
delivered by each of the Company, the Selling Stockholder and the
Parent and is a legal, valid and binding agreement of each of the
Company, the Selling Stockholder and the Parent;
(i) the Common Stock, including the Shares, conforms in all
material respects to the description thereof in the Company's
registration statement on Form 8-A, dated November 17, 1999, which is
incorporated by reference in the Registration Statement and Prospectus;
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(j) the Shares have been duly and validly authorized by the
Company and, when issued by the Company and delivered by the Company or
the Selling Stockholder, as the case may be, against payment therefor
as provided herein, will be validly issued, fully paid and
non-assessable;
(k) no approval, authorization, consent or order of or filing
with any national, state or local governmental or regulatory
commission, board, body, authority or agency is required to be obtained
or made by the Company, the Selling Stockholder, the Parent or any of
their respective affiliates in connection with the issuance and sale of
the Shares or the consummation by the Company, the Selling Stockholder
and the Parent of the transactions contemplated hereby other than
(i) registration of the Shares under the Act; (ii) any necessary
qualification under the securities or blue sky laws of the various
jurisdictions in which the Shares are being offered by the Underwriters
or under Rule 2710 and Rule 2720 of NASD Regulation, Inc. ("NASDR");
and (iii) any such other approvals, authorizations, consents, orders or
filings as have been obtained or made;
(l) except as disclosed in the Prospectus, no person has the
right, contractual or otherwise, to cause the Company to issue to it,
or register pursuant to the Act, any shares of capital stock of the
Company upon the issue and sale of the Shares to the Underwriters
hereunder, nor does any person have preemptive rights, co-sale rights,
rights of first refusal or other rights to purchase any of the Shares
or to underwrite the offer and sale of the Shares;
(m) Deloitte & Touche LLP, whose report on the consolidated
financial statements of the Company and the Subsidiaries is filed with
the Commission as part of the Registration Statement and Prospectus and
as part of the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2000, are independent public accountants as required
by the Act;
(n) each of the Company and the Subsidiaries has all necessary
licenses, permits, authorizations, consents and approvals and has made
all necessary filings required under any federal, state, local or
foreign law, regulation or rule (collectively, "Permits"), and has
obtained all necessary authorizations, consents and approvals from
other persons (collectively, "Approvals"), in order to conduct its
respective business as described in the Prospectus, other than such
Permits and Approvals the failure to obtain which, individually or in
the aggregate, would not reasonably be expected to have a Material
Adverse Effect; neither the Company nor any of the Subsidiaries is in
violation of, or in default under, any such license, permit,
authorization, consent or approval or any federal, state, local or
foreign law, regulation or rule or any decree, order or judgment
applicable to the Company or any of the Subsidiaries the effect of
which, individually or in the aggregate, would reasonably be expected
to have a Material Adverse Effect;
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(o) all legal or governmental proceedings, contracts, leases
or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as an exhibit
to the Registration Statement have been so described or filed as
required;
(p) except as disclosed in the Prospectus, there are no
actions, suits, claims, investigations or proceedings pending or
threatened to which the Company, the Selling Stockholder or the Parent
or any of their respective subsidiaries or any of their respective
officers or directors is a party or of which any of their respective
properties is subject at law or in equity, or before or by any federal,
state, local or foreign governmental or regulatory commission, board,
body, authority or agency which, if adversely decided, could reasonably
be expected to result in a judgment, decree or order having a Material
Adverse Effect or prevent consummation of the transactions contemplated
hereby;
(q) the audited financial statements included in and
incorporated by reference by the Registration Statement and the
Prospectus present fairly in all material respects the consolidated
financial position of the Company and the Subsidiaries as of the dates
indicated and the consolidated results of operations and cash flows of
the Company and the Subsidiaries for the periods specified; such
financial statements have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis during the
periods involved and have been prepared in conformity with the
requirements of the Act;
(r) subsequent to the respective dates as of which information
is given in the Registration Statement and the Prospectus, there has
not been (i) any material adverse change, or any development with
respect to the Company, the Selling Stockholder or the Parent which, in
the reasonable judgment of the Company or the Parent, as the case may
be, is likely to cause a material adverse change, in the business,
properties or assets described or referred to in the Registration
Statement, or the results of operations, condition (financial or
otherwise), business, operations or prospects of the Company and the
Subsidiaries taken as a whole, (ii) any transaction which is material
to the Company or the Subsidiaries, (iii) any obligation, direct or
contingent, which is material to the Company and the Subsidiaries taken
as a whole, incurred by the Company or the Subsidiaries, (iv) any
change in the capital stock or outstanding indebtedness of the Company
or the Subsidiaries or (v) any dividend or distribution of any kind
declared, paid or made on the capital stock of the Company. Neither the
Company nor the Subsidiaries has any material contingent obligation
which is not disclosed in the Registration Statement.
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(s) the Company has obtained agreements substantially in the
forms included in Exhibit I hereto of the Parent, the Selling
Stockholder, the officers and directors of the Company and certain
other holders of Class A Common Stock and Class B Common Stock
(collectively, "Common Stock") and securities convertible into or
exchangeable or exercisable for Common Stock not to sell, offer to
sell, contract to sell, hypothecate, grant any option to sell or
otherwise dispose of, directly or indirectly, any shares of Common
Stock or securities convertible into or exchangeable or exercisable for
Common Stock or warrants or other rights to purchase Common Stock for a
period of 90 days after the date of the Prospectus without the prior
written consent of UBS Warburg LLC ("UBSW"), subject to such exceptions
as may be set forth in Exhibit I hereto;
(t) the Company is not and, after giving effect to the
offering and sale of the Shares, will not be an "investment company" or
an entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the
"Investment Company Act");
(u) any statistical and market-related data included in the
Prospectus are based on or derived from sources that the Company and
the Parent believe to be reliable and accurate;
(v) none of the Company, the Selling Stockholder, the Parent
or any of their respective affiliates has taken, directly or
indirectly, any action designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company in violation
of the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (collectively called the "Exchange Act") or any
other laws to facilitate the sale or resale of the Shares;
(w) the Company and the Subsidiaries maintain insurance of the
types and in amounts reasonably adequate for their respective
businesses, including, but not limited to, insurance covering real and
personal property owned or leased by the Company and the Subsidiaries
against theft, damage, destruction, acts of vandalism and other risks
customarily insured against, all of which insurance is in full force
and effect, except as would not have a Material Adverse Effect;
(x) none of the Company, the Parent or any of the their
respective subsidiaries has sustained since the date of the latest
audited financial statements included in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Prospectus or other than any
loss or interference which would not have a Material Adverse Effect;
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(y) the Company and the Subsidiaries have good title to all
personal property owned by them as described in the Prospectus free and
clear of all liens, encumbrances and defects except such as are
described in the Prospectus or such as would not, individually or in
the aggregate, reasonably be expected to have a Material Adverse
Effect; and, any real property and buildings held under lease by the
Company or any Subsidiary are held by it under valid, subsisting and,
with respect to the Company or such Subsidiary, enforceable leases,
subleases or rights of use agreements with such exceptions as are not
material and do not interfere with the use made of such property and
buildings by the Company or such Subsidiary;
(z) other than as set forth in the Prospectus, or as would not
reasonably be expected individually or in the aggregate to have a
Material Adverse Effect, the Company and the Subsidiaries own, possess,
license or have other rights to use, or is able to acquire, license or
otherwise obtain rights to use, on reasonable terms, all patents,
trademarks, servicemarks, trade names, copyrights, trade secrets,
information, proprietary rights and processes ("Intellectual Property")
necessary for their business as described in the Prospectus and, to the
Company's and the Parent's knowledge, necessary in connection with the
products and services under development, without, to the Company and
the Parent's knowledge after due inquiry, any conflict with or
infringement of the interests of others, and have taken all reasonable
steps necessary to secure interests in such Intellectual Property with
respect to the business as described in the Prospectus; except as set
forth in the Prospectus, neither the Company nor the Parent is aware of
any options, licenses or agreements of any kind relating to the
Intellectual Property of the Company or any Subsidiary that are
outstanding and which are required to be set forth in the Prospectus,
and, except as set forth in the Prospectus, neither the Company nor any
Subsidiary is a party to or bound by any options, licenses or
agreements with respect to the Intellectual Property of any other
person or entity which are required to be set forth in the Prospectus;
none of the technology employed by the Company and the Subsidiaries has
been obtained or is used by the Company, the Parent or any of their
respective subsidiaries in violation of any contractual obligation
binding on the Company, the Parent or any of their respective
subsidiaries or any of their respective directors or executive officers
or, to the Company's and the Parent's knowledge, any employees of the
Company, the Parent or any of their respective subsidiaries or
otherwise in knowing violation after due inquiry of the rights of any
persons, other than any violation which would not individually or in
the aggregate have a Material Adverse Effect; except as disclosed in
the Prospectus, none of the Company, the Parent or any of their
respective subsidiaries has received any written communications
alleging that the Company, the Parent or any of its respective
subsidiaries has violated, infringed or conflicted with, or, by
conducting its business as set forth in the Prospectus, would violate,
infringe or conflict with any of the Intellectual Property of any other
person or entity other than any such violation, infringement or
conflict which would not individually or in the aggregate have a
Material Adverse Effect;
(aa) none of the Company, the Parent or any of their
respective subsidiaries has violated any foreign, federal, state or
local law or regulation relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants, nor any federal or state law relating to
discrimination in the hiring, promotion or pay of employees nor any
applicable federal or state wages and hours laws, nor any provisions of
the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder, which individually or in the
aggregate might result in a Material Adverse Effect;
11
(bb) the Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's
general or specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in conformity
with generally accepted accounting principles and to maintain asset
accountability; (iii) access to assets is permitted only in accordance
with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action is taken with respect to
any differences;
(cc) all tax returns required to be filed by the Company and
each of the Subsidiaries in any jurisdiction have been filed, other
than those filings being contested in good faith, and all taxes,
including withholding taxes, penalties and interest, assessments, fees
and other charges due pursuant to such returns or pursuant to any
assessment received by the Company or any of the Subsidiaries have been
paid, other than those being contested in good faith and for which
adequate reserves have been provided;
(dd) each of eSpeed Securities, Inc. and eSpeed Government
Securities, Inc. is registered under the Exchange Act as a
broker-dealer and is a member in good standing of the National
Association of Securities Dealers, Inc. and neither the Company nor any
other Subsidiary is required to be so registered; and to the extent
required in connection with their respective businesses, each of eSpeed
Securities, Inc. and eSpeed Government Securities, Inc. is also
registered as a broker-dealer in each state and other jurisdiction in
which such registration is required;
(ee) the descriptions of the transactions and agreements
described in the Prospectus under the caption "Certain Transactions"
are accurate and complete in all material respects; and there are no
material agreements or understandings between or among the Company, the
Parent or any of their respective subsidiaries or affiliates relating
to or affecting the Company or its Subsidiaries or their respective
businesses other than as described in the Prospectus.
(ii) The Warrantholders and the Selling Stockholder
each represents and warrants, solely with respect to itself, to each of the
Underwriters that:
(a) immediately prior to the time of purchase and the
additional time of purchase, as the case may be, the Selling Stockholder will be
the lawful owner of the Shares to be sold by the Selling Stockholder hereunder
and upon sale and delivery of, and payment for, the Shares to be sold by the
Selling Stockholder hereunder, as provided herein, the Selling Stockholder will
convey to the Underwriters good and marketable title to such Shares, free and
clear of all liens, encumbrances and defects;
12
(b) immediately prior to the time of purchase, the
Warrantholders will be the lawful owner of the Shares to be sold by the
Warrantholders hereunder and upon sale and delivery of, and payment for, the
Shares to be sold by the Warrantholders hereunder, as provided herein, the
Warrantholders will convey to the Underwriters good and marketable title to such
Shares, free and clear of all liens, encumbrances and defects.
(c) neither the Warrantholders nor the Selling Stockholder has
taken, directly or indirectly, any action designed to or which has constituted
or which might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company in violation of the
Exchange Act or any other laws to facilitate the sale or resale of the Shares;
(d) no approval, authorization, consent or order of any court
or filing with any national, state or local governmental or regulatory
commission, board, body, authority or agency is required to be obtained or made
by either the Warrantholders or the Selling Stockholder in connection with the
sale of the Shares to be sold by the Warrantholders and Selling Stockholder or
for the consummation by the Warrantholders and the Selling Stockholder of the
transactions contemplated hereby other than (i) registration of the Shares under
the Act, (ii) any necessary qualification under the securities or blue sky laws
of the various jurisdictions in which the Shares are being offered by the
Underwriters or under Rule 2710 and Rule 2720 of the NASDR and (iii) any such
other approvals, authorizations, consents, orders or filings as have been
obtained or made;
(e) this Agreement has been duly authorized, executed and
delivered by the Warrantholders and the Selling Stockholder and is a legal,
valid and binding agreement of the Warrantholders and the Selling Stockholder,
respectively;
(f) the execution, delivery and performance of this Agreement,
the sale of the Shares to be sold by the Selling Stockholder and the
consummation of the transactions contemplated hereby by the Selling Stockholder
does not and will not constitute a Default Event under any provisions of the
partnership agreement of the Selling Stockholder or any of its subsidiaries or
under any provision of any license, permit, indenture, mortgage, deed of trust,
bank loan or credit agreement or other evidence of indebtedness, or any lease,
contract or other agreement or instrument to which the Selling Stockholder or
any of its subsidiaries is a party or by which it or its properties may be bound
or affected, or under any federal, state, local or foreign law, regulation or
rule or any decree, judgment or order applicable to it or any of its
subsidiaries, except for such Default Events as would not individually or in the
aggregate reasonably be expected to have a material adverse effect on the
ability of the Selling Stockholder to consummate the transactions contemplated
hereby;
13
(g) the Selling Stockholder has no reason to believe that the
representations and warranties of the Company and the Parent contained in this
Section 3 are not true and correct, has reviewed the Registration Statement and
has no reason to believe that the Registration Statement contains any untrue
statement of a material fact or omits to state a material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus contains an untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided, however, that the Selling Stockholder makes no
warranty or representation with respect to any statement contained in or omitted
from the Registration Statement or the Prospectus in reliance upon and in
conformity with information concerning the Underwriters (in their capacity as
such) and furnished in writing by or on behalf of any Underwriter (in its
capacity as such) through you (in your capacity as representatives of the
several Underwriters) to the Company expressly for use in the Registration
Statement or the Prospectus;
(h) neither the Warrantholders nor the Selling Stockholder has
distributed any offering material in connection with the offering or sale of the
Shares other than the Registration Statement, the Preliminary Prospectus, the
Prospectus or any other materials, if any, permitted by the Act; and
(i) neither the Warrantholders nor the Selling Stockholder has
received, and has no notice of, any order of the Commission preventing or
suspending the use of any Preliminary Prospectus, or instituting proceedings for
that purpose.
4. Certain Covenants of the Company, the Warrantholders and
the Selling Stockholder.
(i) The Company hereby agrees:
(a) to furnish such information as may be required and
otherwise to cooperate in qualifying the Shares for offering and sale
under the securities or blue sky laws of such states as you may
designate and to maintain such qualifications in effect so long as
required for the distribution of the Shares; provided that the Company
shall not be required to qualify as a foreign corporation or to consent
to the service of process under the laws of any such state (except
service of process with respect to the offering and sale of the
Shares); and to promptly advise you of the receipt by the Company of
any notification with respect to the suspension of the qualification of
the Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose;
14
(b) to make available to the Underwriters in New York City, as
soon as practicable after the Registration Statement becomes effective,
and thereafter from time to time to furnish to the Underwriters, as
many copies of the Prospectus (or of the Prospectus as amended or
supplemented if the Company shall have made any amendments or
supplements thereto after the effective date of the Registration
Statement) as the Underwriters may request for the purposes
contemplated by the Act; in case any Underwriter is required to deliver
a prospectus after the nine-month period referred to in Section
10(a)(3) of the Act in connection with the sale of the Shares, the
Company will prepare promptly upon request, but at the expense of such
Underwriter, such amendment or amendments to the Registration Statement
and such prospectuses as may be necessary to permit compliance with the
requirements of Section 10(a)(3) of the Act;
(c) to advise you promptly and (if requested by you) to
confirm such advice in writing, (i) when the Registration Statement has
become effective and when any post-effective amendment thereto becomes
effective and (ii) if Rule 430A under the Act is used, when the
Prospectus is filed with the Commission pursuant to Rule 424(b) under
the Act (which the Company agrees to file in a timely manner under such
Rules);
(d) to advise you promptly, confirming such advice in writing
(if requested by you), of any request by the Commission for amendments
or supplements to the Registration Statement or Prospectus or for
additional information with respect thereto, or of notice of
institution of proceedings for, or the entry of a stop order suspending
the effectiveness of the Registration Statement and, if the Commission
should enter a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the
lifting or removal of such order as soon as possible; to advise you
promptly of any proposal to amend or supplement the Registration
Statement or Prospectus and to file no such amendment or supplement to
which you shall object in writing;
(e) if necessary or appropriate, to file a registration
statement pursuant to Rule 462(b) under the Act;
(f) to furnish to you and, upon request, to each of the other
Underwriters for a period of five years from the date of this Agreement
(i) copies of any reports or other communications which the Company
shall send to its stockholders or shall from time to time publish or
publicly disseminate, (ii) copies of all annual, quarterly and current
reports filed with the Commission on Forms 10-K, 10-Q and 8-K, or such
other similar form as may be designated by the Commission, (iii) copies
of documents or reports filed with any national securities exchange on
which any class of securities of the Company is listed, and (iv) such
other information as you may reasonably request regarding the Company
or the Subsidiaries, in each case as soon as reasonably practicable
after such reports, communications, documents or information become
available;
15
(g) to advise the Underwriters promptly of the happening of
any event known to the Company within the time during which a
Prospectus relating to the Shares is required to be delivered under the
Act which, in the judgment of the Company, would require the making of
any change in the Prospectus then being used so that the Prospectus
would not include an untrue statement of material fact or omit to state
a material fact necessary to make the statements therein, in the light
of the circumstances under which they are made, not misleading, and,
during such time, to prepare and furnish, at the Company's expense, to
the Underwriters promptly such amendments or supplements to such
Prospectus as may be necessary to reflect any such change and to
furnish you a copy of such proposed amendment or supplement before
filing any such amendment or supplement with the Commission;
(h) to promptly file all reports and any definitive proxy or
information statement required to be filed by the Company with the
Commission in order to comply with the Exchange Act subsequent to the
date of the Prospectus and for so long as the delivery of a prospectus
is required in connection with the offering and sale of the Shares, and
to promptly notify you of such filing;
(i) to furnish to you four signed copies of the Registration
Statement, as initially filed with the Commission, and of all
amendments thereto (including all exhibits thereto) and sufficient
conformed copies of the foregoing (other than exhibits) for
distribution of a copy to each of the other Underwriters;
(j) to furnish to you as early as reasonably practicable prior
to the time of purchase and the additional time of purchase, as the
case may be, but not later than two business days prior thereto, a copy
of the latest available unaudited interim consolidated financial
statements, if any, of the Company and the Subsidiaries which have been
read by the Company's independent certified public accountants, as
stated in their letter to be furnished pursuant to Section 6(e) hereof;
(k) to apply the net proceeds from the sale of the Shares in
the manner set forth under the caption "Use of proceeds" in the
Prospectus;
16
(l) to pay all costs, expenses, fees and taxes (other than any
transfer taxes and fees and disbursements of counsel for the
Underwriters, except as set forth under Section 5 hereof and (iv) and
(v) below) in connection with (i) the preparation and filing of the
Registration Statement, each Preliminary Prospectus, the Prospectus,
and any amendments or supplements thereto, and the printing and
furnishing of copies of each thereof to the Underwriters and to dealers
(including costs of mailing and shipment), (ii) the registration,
issue, sale and delivery of the Shares, (iii) the printing of this
Agreement, any Agreement Among Underwriters, any dealer agreements, any
Powers of Attorney and any closing documents (including compilations
thereof) and the reproduction and/or printing and furnishing of copies
of each thereof to the Underwriters and (except closing documents) to
dealers (including costs of mailing and shipment), (iv) the
qualification of the Shares for offering and sale under state laws and
the determination of their eligibility for investment under state law
as aforesaid and the printing and furnishing of copies of any blue sky
surveys or legal investment surveys to the Underwriters and to dealers,
(v) any filing for review of the public offering of the Shares by NASDR
and (vi) the performance of the other obligations of the Company and
the Selling Stockholder hereunder;
(m) for so long as the delivery of the Prospectus is required
in connection with the offering or sale of the Shares, to furnish to
you, before filing with the Commission, a copy of any document proposed
to be filed pursuant to Section 13, 14 or 15(d) of the Exchange Act;
and
(n) not to sell, offer or agree to sell, contract to sell,
grant any option to sell or otherwise dispose of, directly or
indirectly, any shares of Common Stock or securities convertible into
or exchangeable or exercisable for Common Stock or warrants or other
rights to purchase Common Stock or any other securities of the Company
that are substantially similar to Common Stock or permit the
registration under the Act of any shares of Common Stock, except for
the registration of the Shares and the sales to the Underwriters
pursuant to this Agreement or on Form S-8 and except for issuances of
Common Stock upon the exercise of outstanding options, warrants and
debentures, for a period of 90 days after the date hereof (the "Lock-up
Period"), without the prior written consent of UBSW, other than shares
registered and/or issued by the Company in connection with acquisitions
of complementary operations or assets, provided, that the recipients
thereof agree to the restrictions on transfer and disposal set forth in
this paragraph for the remainder of the Lock-up Period.
(ii) The Warrantholders and the Selling Stockholder
hereby agree:
(a) to execute and deliver to the Underwriters a letter in the
form contemplated by Section 3(i)(s);
17
(b) to advise the Underwriters promptly of the happening of
any event known to the Warrantholders or the Selling Stockholder, as
the case may be, within the time during which a Prospectus relating to
the Shares is required to be delivered under the Act which, in the
judgment of the Warrantholders or the Selling Stockholder, would
require the making of any change in the Prospectus then being used so
that the Prospectus would not include an untrue statement of material
fact or omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they are made,
not misleading; and
(c) to pay all federal and other taxes, if any, on the
transfer and sale of the Shares being sold by the Warrantholders or the
Selling Stockholder, as the case may be, to the Underwriters.
5. Reimbursement of Underwriters' Expenses. If the Shares are
not delivered for any reason other than the termination of this Agreement
pursuant to clause (b) of the second paragraph of Section 7 hereof or pursuant
to Section 8 hereof, the Company shall, in addition to paying the amounts
described in Section 4(i)(l) hereof, reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of their
counsel.
6. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy of the
representations and warranties on the part of the Company, the Parent, the
Warrantholders and the Selling Stockholder on the date hereof and at the time of
purchase (and the several obligations of the Underwriters at the additional time
of purchase are subject to the accuracy of the representations and warranties on
the part of the Company, the Parent, the Warrantholders and the Selling
Stockholder on the date hereof and at the time of purchase (unless previously
waived) and at the additional time of purchase, as the case may be), the
performance by the Company, the Parent, the Warrantholders and the Selling
Stockholder of their obligations hereunder and to the following additional
conditions precedent:
(a) You shall have received, at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of
Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel for the Company, addressed to the
Underwriters, and dated the time of purchase or the additional time of
purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form reasonably satisfactory to Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, stating that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware, with the requisite corporate
power and authority to own, lease and operate its properties
and conduct its business as described in the Registration
Statement and the Prospectus, to execute and deliver this
Agreement and to issue, sell and deliver the Shares as herein
contemplated;
(ii) each of the Subsidiaries, other than any
international Subsidiary (as to which such counsel need not
opine), has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its
respective jurisdiction of incorporation with the requisite
corporate power and authority to own, lease and operate its
respective properties and to conduct its respective business;
18
(iii) the Company and the Subsidiaries, other than
any international Subsidiary (as to which such counsel need
not opine), are duly qualified to do business as a foreign
corporation in good standing in New York;
(iv) this Agreement has been duly authorized,
executed and delivered by the Company and is a legal, valid
and binding agreement of the Company enforceable against the
Company in accordance with its terms, except as enforcement of
rights to indemnity and contribution hereunder may be limited
by federal or state securities laws or principles of public
policy and subject to the qualification that the
enforceability of obligations of the Company hereunder may be
limited by bankruptcy, insolvency, reorganization, moratorium
and other laws relating to or affecting creditors' rights
generally and by general equitable principles;
(v) the Shares have been duly authorized by the
Company and, when issued by the Company and delivered by the
Company, the Selling Stockholder and the Warrantholders, as
the case may be, to and paid for by the Underwriters in
accordance with the terms hereof, will be validly issued and
will be fully paid and non-assessable;
(vi) the Company has an authorized capitalization as
set forth in the Registration Statement and the Prospectus;
the outstanding shares of capital stock of the Company have
been duly and validly authorized and issued and are fully
paid, nonassessable and free of statutory and, to such
counsel's knowledge, contractual preemptive rights, resale
rights, rights of first refusal and similar rights; the Shares
when issued by the Company will be free of statutory and, to
such counsel's knowledge, contractual preemptive rights; the
certificates for the Shares are in proper form under the
Delaware General Corporation Law ("DGCL") and the holders of
the Shares will not be subject to personal liability by reason
of being such holders;
(vii) the Company is the sole registered owner of 100
shares of common stock of eSpeed Government Securities, Inc.,
100 shares of common stock of eSpeed Securities Inc.,
4,676,008 ordinary shares, U.S. $1.00 each, of eSpeed
International Limited, 2 ordinary shares ,(pound)1 each, of
eSpeed International Limited and 100 shares of common stock
of eSpeed Markets, Inc. Such shares of capital stock, if
applicable, (other than those of any international Subsidiary
(as to which such counsel need not opine)) have been duly
authorized and validly issued and are fully paid and
non-assessable; such counsel has no knowledge of any other
outstanding shares of capital stock of the Subsidiaries or any
security interest, other encumbrance or adverse claim with
respect to the shares of capital stock of the Subsidiaries
owned by the Company; and such counsel has no knowledge of any
options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any
obligation into shares of capital stock or ownership interests
in the Subsidiaries;
19
(viii) the Common Stock of the Company, including
the Shares, conforms in all material respects to the
description thereof incorporated by reference by the
Registration Statement and Prospectus from the Company's
registration statement on Form 8-A, dated November 17, 1999;
(ix) the Registration Statement and the Prospectus
(except as to the financial statements and schedules and other
financial, statistical and accounting data contained therein,
as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the
Act;
(x) the Registration Statement has become effective
under the Act and, to such counsel's knowledge, no stop order
proceedings with respect thereto are pending or threatened
under the Act and any required filing of the Prospectus and
any supplement thereto pursuant to Rule 424 under the Act has
been made in the manner and within the time period required by
such Rule 424;
(xi) no approval, authorization, consent or order of
or filing with any national, state or local governmental or
regulatory commission, board, body, authority or agency is
required to be made or obtained by the Company in connection
with the issuance and sale of the Shares and consummation by
the Company of the transactions contemplated hereby other than
registration of the Shares under the Act and under Rule 2710
and Rule 2720 of NASDR and except for such other approvals,
authorizations, consents, orders and filings as have been
obtained or made (except such counsel need express no opinion
as to any necessary qualification under the state securities
or blue sky laws of the various jurisdictions in which the
Shares are being offered by the Underwriters);
(xii) the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby do not constitute, and
will not result in, a Default Event (a) under any provisions
of the charter or by-laws of the Company or any of the
Subsidiaries, other than any international Subsidiary (as to
which such counsel need not opine), or (b) under any provision
of any license, permit, indenture, mortgage, deed of trust,
bank loan or credit agreement or other evidence of
indebtedness, or any lease, contract or other agreement or
instrument to which the Company or any of the Subsidiaries,
other than the international Subsidiary (as to which such
counsel need not opine), is a party or by which any of them or
their respective properties may be bound or affected and which
is filed as an exhibit to the Registration Statement, other
than, in the case of clause (b), such Default Events as would
not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect;
20
(xiii) to such counsel's knowledge, (a) none of the
Company or any of the Subsidiaries is in violation of its
charter or by-laws and (b) no Default Event exists under any
license, permit, indenture, mortgage, deed of trust, bank loan
or credit agreement or other evidence of indebtedness, or any
lease, contract or other agreement or instrument to which the
Company or any of the Subsidiaries is a party or by which any
of them or their respective properties may be bound or
affected and which is filed as an exhibit to the Registration
Statement, except, in the case of clause (b), any such Default
Events as would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect;
(xiv) to such counsel's knowledge, there are no
contracts, licenses, agreements, leases or documents of a
character which are required to be filed as exhibits to the
Registration Statement or to be summarized or described in the
Prospectus which have not been so filed, summarized or
described as required;
(xv) to such counsel's knowledge, there are no
actions, suits, claims, investigations or proceedings pending,
or, to such counsel's knowledge, threatened to which the
Company or any of the Subsidiaries is subject or of which any
of their respective properties is subject at law or in equity
or before or by any federal, state, local or foreign
governmental or regulatory commission, board, body, authority
or agency which are required to be described in the Prospectus
but are not so described as required;
(xvi) the Company is not and, after giving effect to
the offering and sale of the Shares, will not be an
"investment company" or an entity "controlled" by an
"investment company," as such terms are defined in the
Investment Company Act;
(xvii) such counsel has read the statements in the
Prospectus under the caption "Certain Transactions" and in
Item 3 of the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 2000, which is incorporated by
reference in the Prospectus, and insofar as such statements
constitute summaries of legal matters, contracts, agreements,
documents or proceedings referred to therein, or refer to
statements of law or legal conclusions, such statements are
accurate in all material respects and fairly present the
information purported to be shown; and
21
(xviii) to the knowledge of such counsel, except as
described in the Prospectus, no person is entitled to
registration rights under the Act with respect to shares of
capital stock or other securities of the Company upon the
issue and sale of the Shares to the Underwriters hereunder.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company and the Parent, representatives of the independent public
accountants of the Company and representatives of the Underwriters at
which the contents of the Registration Statement and Prospectus were
discussed and, although such counsel is not passing upon and does not
assume responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or Prospectus
(except as and to the extent stated in subparagraphs (vi), (viii) and
(xvii) above), on the basis of the foregoing nothing has come to the
attention of such counsel that causes them to believe that the
Registration Statement or any amendment thereto at the time such
Registration Statement or amendment became effective contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus or any supplement
thereto at the date of such Prospectus or such supplement, and at all
times up to and including the time of purchase or additional time of
purchase, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading (it being
understood that such counsel need express no belief with respect to the
financial statements and schedules and other financial, statistical and
accounting data included in the Registration Statement or Prospectus).
(b) You shall have received, at the time of purchase and at
the additional time of purchase, as the case may be, an opinion of
Xxxxxxx X. Xxxxxx, General Counsel of the Company and the Parent,
addressed to the Underwriters, and dated the time of purchase or the
additional time of purchase, as the case may be, with reproduced copies
for each of the other Underwriters and in form reasonably satisfactory
to Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters, stating that:
(i) this Agreement has been duly authorized, executed
and delivered by each of the Parent and the Selling
Stockholder and is a legal, valid and binding agreement of
each of the Parent and the Selling Stockholder enforceable in
accordance with its terms, except as enforcement of rights to
indemnity and contribution hereunder may be limited by federal
or state securities laws or principles of public policy and
subject to the qualification that the enforceability of
obligations of the Parent and the Selling Stockholder
hereunder may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws relating to or
affecting creditors' rights generally and by general equitable
principles;
22
(ii) no approval, authorization, consent or order of
or filing with any national, state or local governmental or
regulatory commission, board, body, authority or agency is
required to be made or obtained by the Parent, the Selling
Stockholder or any of their respective subsidiaries in
connection with the issuance and sale of the Shares and
consummation by the Parent and the Selling Stockholder of the
transactions contemplated hereby other than registration of
the Shares under the Act and under Rule 2710 and Rule 2720 of
NASDR and except for such other approvals, authorizations,
consents, orders and filings as have been obtained or made
(except such counsel need express no opinion as to any
necessary qualification under the state securities or blue sky
laws of the various jurisdictions in which the Shares are
being offered by the Underwriters);
(iii) the execution, delivery and performance of this
Agreement by the Parent and the Selling Stockholder and the
consummation by the Company, the Parent and the Selling
Stockholder of the transactions contemplated hereby do not
constitute, and will not result in, a Default Event (a) under
any provisions of the charter or by-laws of the Company, the
partnership agreements of the Parent or the Selling
Stockholder or any of the charter or by-laws or partnership
agreements, as the case may be, their respective subsidiaries
or (b) under any provision of any license, permit, indenture,
mortgage, deed of trust, bank loan or credit agreement or
other evidence of indebtedness, or any lease, contract or
other agreement or instrument to which the Company, the Parent
or the Selling Stockholder or any of their respective
subsidiaries is a party or by which any of them or their
respective properties may be bound or affected and, in any
such case, which is known to such counsel, or under any
federal, state, local or foreign law, regulation or rule or
any decree, judgment or order known by such counsel to be
applicable to the Company, the Parent or the Selling
Stockholder or any of their respective subsidiaries, other
than, in the case of clause (b), such Default Events as would
not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect;
(iv) to such counsel's knowledge, (a) none of the
Company, the Parent or the Selling Stockholder or any of their
respective subsidiaries is in violation of its charter or
by-laws or partnership agreements, as the case may be, and (b)
no Default Event exists under any license, permit, indenture,
mortgage, deed of trust, bank loan or credit agreement or
other agreement or instrument to which the Company, the Parent
or the Selling Stockholder or any of their respective
subsidiaries is a party or by which any of them or their
respective properties may be bound or affected and which is
known to such counsel or under any federal, state, local or
foreign law, regulation or rule or any decree, judgment or
order known by such counsel to be applicable to the Company,
the Parent or the Selling Stockholder or any of their
respective subsidiaries, except in all such cases with respect
to clauses (a) and (b) as would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse
Effect;
23
(v) to such counsel's knowledge, there are no
actions, suits, claims, investigations or proceedings pending
or, to such counsel's knowledge, threatened to which the
Parent or the Selling Stockholder or any of their respective
subsidiaries is subject or of which any of their respective
properties is subject at law or in equity or before or by any
federal, state, local or foreign governmental or regulatory
commission, board, body, authority or agency which are
required to be described in the Prospectus but are not so
described as required;
(vi) such counsel has read the statements in the
Prospectus under the captions "Risk factors-- Risks related to
our business -- If Cantor or we are unable to protect the
intellectual property rights we license from Cantor or own,
our ability to operate electronic trading marketplaces may be
materially adversely affected", "Risk factors-- Risks related
to our business-- If it becomes necessary to protect or defend
our intellectual property rights, we may have to resort to
costly litigation", "Risk factors-- Risks related to our
business-- If our software licenses from third parties are
terminated, our ability to operate our business may be
materially adversely affected", "Risk factors-- Risks related
to our business-- If the strength of our domain names is
diluted, the value of our proprietary rights may decrease",
"Risk factors-- Risks related to our business-- If we infringe
on patent rights or copyrights of others, we could become
involved in costly litigation", "Business-- Our intellectual
property" and "Certain transactions" and in Item 3 of the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000, which is incorporated by reference in the
Prospectus, and insofar as such statements constitute
summaries of legal matters, contracts, agreements, documents
or proceedings referred to therein, or refer to statements of
law or legal conclusions, such statements are accurate in all
material respects and fairly present the information purported
to be shown;
(vii) the Selling Stockholder has full legal right
and authority to sell, transfer and deliver in the manner
provided in this Agreement the Shares being sold by the
Selling Stockholder hereunder; and
24
(viii) delivery by the Selling Stockholder to the
several Underwriters of certificates for the Shares being sold
hereunder by the Selling Stockholder, against payment therefor
as provided herein, assuming each of the Underwriters has
purchased the Selling Stockholder's shares in good faith and
without notice of any adverse claim, will pass good and
marketable title to such Shares to the several Underwriters,
free and clear of all liens, encumbrances and defects.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other representatives of
the Company and the Parent, representatives of the independent public
accountants of the Company and representatives of the Underwriters at
which the contents of the Registration Statement and Prospectus were
discussed and, although such counsel is not passing upon and does not
assume responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or Prospectus
(except as and to the extent stated in subparagraph (vii) above), on
the basis of the foregoing nothing has come to the attention of such
counsel that causes such counsel to believe that the Registration
Statement or any amendment thereto at the time such Registration
Statement or amendment became effective contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, or that the Prospectus or any supplement thereto at the
date of such Prospectus or such supplement, and at all times up to and
including the time of purchase or additional time of purchase, as the
case may be, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading (it being understood that
such counsel need express no belief with respect to the financial
statements and schedules and other financial, statistical and
accounting data included in the Registration Statement or Prospectus).
(c) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of Xxxxxx
Xxxx, special English counsel to the Company, dated the time of
purchase or the additional time of purchase, as the case may be,
stating that:
(i) eSpeed International Limited has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of England and Wales, with the
requisite corporate power and authority to own, lease and
operate its properties and to conduct its business; and all of
the outstanding shares of capital stock of eSpeed
International Limited have been duly authorized and validly
issued and are credited as fully paid-up; and
(ii) the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby do not constitute, and
will not result in, a Default Event under any provisions of
the articles and memorandum of association of eSpeed
International Limited.
25
(d) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of
__________, special Japanese counsel to the Company, dated the time of
purchase or the additional time of purchase, as the case may be,
stating that:
(i) eSpeed (Japan) Limited has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of Japan, with the requisite corporate power
and authority to own, lease and operate its properties and to
conduct its business; and all of the outstanding shares of
capital stock of eSpeed (Japan) Limited have been duly
authorized and validly issued and are credited as fully
paid-up; and
(ii) the execution, delivery and performance of this
Agreement by the Company and the consummation by the Company
of the transactions contemplated hereby do not constitute, and
will not result in, a Default Event under any provisions of
the articles of incorporation of eSpeed (Japan) Limited.
(e) You shall have received, at the time of purchase, an
opinion of ____________, counsel of the Warrantholders, addressed to
the Underwriters, and dated the time of purchase or the additional time
of purchase, as the case may be, with reproduced copies for each of the
other Underwriters and in form reasonably satisfactory to Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, stating that:
(i) this Agreement has been duly authorized, executed
and delivered by the Warrantholders and is a legal, valid and
binding agreement of each Warrantholder enforceable in
accordance with its terms, except as enforcement of rights to
indemnity and contribution hereunder may be limited by federal
or state securities laws or principles of public policy and
subject to the qualification that the enforceability of
obligations of the Warrantholders hereunder may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
laws relating to or affecting creditors' rights generally and
by general equitable principles;
(ii) no approval, authorization, consent or order of
or filing with any national, state or local governmental or
regulatory commission, board, body, authority or agency is
required to be made or obtained by the Warrantholders or any
of its subsidiaries in connection with the issuance and sale
of the Shares and consummation by the Warrantholders of the
transactions contemplated hereby other than registration of
the Shares under the Act and the Exchange Act and under Rule
2710 and Rule 2720 of NASDR and except for such other
approvals, authorizations, consents, orders and filings as
have been obtained or made (except such counsel need express
no opinion as to any necessary qualification under the state
securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Underwriters);
26
(iii) the Warrantholder has full legal right and
authority to sell, transfer and deliver in the manner provided
in this Agreement the Shares being sold by the Warrantholder
hereunder; and
(iv) delivery by the Warrantholders to the several
Underwriters of certificates for the Shares being sold
hereunder by the Warrantholders, against payment therefor as
provided herein, assuming each of the Underwriters has
purchased each of the Warrantholders' shares in good faith and
without notice of any adverse claim, will pass good and
marketable title to such Shares to the several Underwriters,
free and clear of all liens, encumbrances and defects.
(f) You shall have received from Deloitte & Touche LLP letters
dated, respectively, the date of this Agreement and the time of
purchase and additional time of purchase, as the case may be, and
addressed to the Underwriters (with reproduced copies for each of the
Underwriters) in the forms heretofore approved by UBSW.
(g) You shall have received at the time of purchase and at the
additional time of purchase, as the case may be, the opinion of Xxxxx
Xxxxxxxxxx LLP, counsel for the Underwriters, dated the time of
purchase or the additional time of purchase, as the case may be, with
respect to the issuance and sale of the Shares by the Company, the
Registration Statement, the Prospectus (together with any supplement
thereto) and other related matters as the Underwriters may require.
(h) No amendment or supplement to the Registration Statement
or Prospectus shall at any time have been filed to which you have
objected or shall object in writing.
(i) The Registration Statement shall have become effective, at
or before 5:30 P.M., New York City time, on the date of this Agreement,
unless a later time shall be agreed to by the Company and you in
writing or by telephone, confirmed in writing, and, if Rule 430A under
the Act is used, the Prospectus shall have been filed with the
Commission no later than 5:30 P.M., New York City time, on the second
full business day after the date of this Agreement; provided, however,
that the Company and you and any group of Underwriters, including you,
who have agreed hereunder to purchase in the aggregate at least 50% of
the Firm Shares may from time to time agree on a later date.
(j) Prior to the time of purchase or the additional time of
purchase, as the case may be, (i) no stop order with respect to the
effectiveness of the Registration Statement shall have been issued
under the Act or proceedings initiated under Section 8(d) or 8(e) of
the Act; (ii) the Registration Statement and all amendments thereto, or
modifications thereof, if any, shall not contain 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 not misleading; and
(iii) the Prospectus and all amendments or supplements thereto, or
modifications thereof, if any, shall not contain 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 are made, not misleading.
27
(k) Between the time of execution of this Agreement and the
time of purchase or the additional time of purchase, as the case may
be, (i) no material and adverse change, financial or otherwise (other
than as referred to in the Registration Statement and Prospectus), in
the operations, business, condition or prospects of the Company and the
Subsidiaries taken as a whole shall occur or become known and (ii) no
transaction which is material and unfavorable to the Company shall have
been entered into by the Company or any of the Subsidiaries.
(l) Each of the Company, the Parent, the Warrantholders and
the Selling Stockholder will, at the time of purchase or additional
time of purchase, as the case may be, deliver to you a certificate of
the Company, the Parent, the Warrantholders or the Selling Stockholder,
as the case may be, signed by two of its executive officers or partners
to the effect that the representations and warranties of the Company,
the Parent, the Warrantholders or the Selling Stockholder, as the case
may be, as set forth in this Agreement are true and correct as of each
such date, that the Company, the Parent, the Warrantholders or the
Selling Stockholder, as the case may be, has performed such of its
obligations under this Agreement as are to be performed at or before
the time of purchase and at or before the additional time of purchase,
as the case may be, and the conditions set forth in paragraphs (i) and
(j) of this Section 6 have been met (in the case of the Warrantholders,
only with respect to j).
(m) You shall have received signed letters from the holders of
Common Stock and securities convertible into or exchangeable or
exercisable for Common Stock (including the Parent and the Selling
Stockholder) in the form and to the effect contemplated by Section
3(i)(s).
(n) The Company, the Parent, the Warrantholders and the
Selling Stockholder shall have furnished to you such other documents
and certificates as to the accuracy and completeness of any statement
in the Registration Statement and the Prospectus as of the time of
purchase and the additional time of purchase, as the case may be, as
you may reasonably request.
7. Effective Date of Agreement; Termination. This Agreement
shall become effective (i) if Rule 430A under the Act is not used, when you
shall have received notification of the effectiveness of the Registration
Statement, or (ii) if Rule 430A under the Act is used, when the parties hereto
have executed and delivered this Agreement.
28
The obligations of the several Underwriters hereunder shall be
subject to termination in the absolute discretion of you or any group of
Underwriters (which may include you) which has agreed to purchase in the
aggregate at least 50% of the Firm Shares, (a) if, since the time of execution
of this Agreement or the respective dates as of which information is given in
the Registration Statement and Prospectus, there has been any material adverse
and unfavorable change, financial or otherwise (other than as referred to in the
Registration Statement and Prospectus), in the operations, business, condition
or prospects of the Company and the Subsidiaries taken as a whole, which would,
in your judgment or in the judgment of such group of Underwriters, make it
impracticable to market the Shares, or (b) if, at any time prior to the time of
purchase or, with respect to the purchase of any Additional Shares, the
additional time of purchase, as the case may be, trading in securities on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market shall have been suspended or limitations or minimum prices shall have
been established on the New York Stock Exchange, the American Stock Exchange or
the Nasdaq National Market, or if a banking moratorium shall have been declared
either by the United States or New York State authorities, or if the United
States shall have declared war in accordance with its constitutional processes
or there shall have occurred any material outbreak or escalation of hostilities
or other national or international calamity or crisis of such magnitude in its
effect on the financial markets of the United States as, in your judgment or in
the judgment of such group of Underwriters, to make it impracticable to market
the Shares.
If any Underwriter elects to terminate this Agreement as
provided in this Section 7, the Company, the Parent, the Warrantholders, the
Selling Stockholder and each other Underwriter shall be notified promptly by
letter or telegram from such terminating Underwriter.
If the sale to the Underwriters of the Shares, as contemplated
by this Agreement, is not carried out by the Underwriters for any reason
permitted under this Agreement or if such sale is not carried out because the
Company, the Parent, the Warrantholders or the Selling Stockholder shall be
unable to comply with any of the terms of this Agreement, the Company, the
Parent and the Warrantholders shall not be under any obligation or liability
under this Agreement (except to the extent provided in Sections 4(i)(1), 5 and 9
hereof), and the Underwriters shall be under no obligation or liability to the
Company, the Parent, the Warrantholders and the Selling Stockholder under this
Agreement (except to the extent provided in Section 9 hereof) or to one another
hereunder.
8. Increase in Underwriters' Commitments. Subject to Sections
6 and 7, if any Underwriter shall default in its obligation to purchase and pay
for the Firm Shares to be purchased by it hereunder (otherwise than for a reason
sufficient to justify the termination of this Agreement under the provisions of
Section 7 hereof) and if the number of Firm Shares which all Underwriters so
defaulting shall have agreed but failed to purchase and pay for does not exceed
10% of the total number of Firm Shares, the non-defaulting Underwriters shall
purchase and pay for (in addition to the aggregate number of Firm Shares they
are obligated to purchase pursuant to Section 1 hereof) the number of Firm
Shares agreed to be purchased by all such defaulting Underwriters, as
hereinafter provided. Such Shares shall be purchased and paid for by such
non-defaulting Underwriter or Underwriters in such amount or amounts as you may
designate with the consent of each Underwriter so designated or, in the event no
such designation is made, such Shares shall be purchased and paid for by all
non-defaulting Underwriters pro rata in proportion to the aggregate number of
Firm Shares set opposite the names of such non-defaulting Underwriters in
Schedule A.
29
Without relieving any defaulting Underwriter from its
obligations hereunder, the Company and the Selling Stockholder agree with the
non-defaulting Underwriters that they will not sell any Firm Shares hereunder
unless all of the Firm Shares are purchased by the Underwriters (or by
substituted Underwriters selected by you with the approval of the Company and
the Selling Stockholder or selected by the Company and the Selling Stockholder
with your approval).
If a new Underwriter or Underwriters are substituted by the
Underwriters or by the Company and the Selling Stockholder for a defaulting
Underwriter or Underwriters in accordance with the foregoing provision, the
Company and the Selling Stockholder or you shall have the right to postpone the
time of purchase for a period not exceeding five business days in order that any
necessary changes in the Registration Statement and Prospectus and other
documents may be effected.
The term Underwriter as used in this Agreement shall refer to
and include any Underwriter substituted under this Section 8 with like effect as
if such substituted Underwriter had originally been named in Schedule A.
If the aggregate number of Shares which the defaulting
Underwriter or Underwriters agreed to purchase exceeds 10% of the total number
of Shares which all Underwriters agreed to purchase hereunder, and if neither
the non-defaulting Underwriters nor the Company shall make arrangements within
the five business day period stated above for the purchase of all the Shares
which the defaulting Underwriter or Underwriters agreed to purchase hereunder,
this Agreement shall be terminated without further act or deed and without any
liability on the part of the Company, the Parent, the Warrantholders and the
Selling Stockholder to any non-defaulting Underwriter and without any liability
on the part of any non-defaulting Underwriter to the Company, the Parent, the
Warrantholders and the Selling Stockholder. Nothing in this paragraph, and no
action taken hereunder, shall relieve any defaulting Underwriter from liability
in respect of any default of such Underwriter under this Agreement.
30
9. Indemnity and Contribution.
(a) The Company, the Parent and the Selling Stockholder
jointly and severally agree to indemnify, defend and hold harmless each
Underwriter, its partners, directors and officers, and any person who controls
any Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, and the successors and assigns of all of the foregoing persons
from and against any loss, damage, expense, liability or claim (including the
reasonable cost of investigation) which, jointly or severally, any such
Underwriter or any such person may incur under the Act, the Exchange Act, the
common law or otherwise, insofar as such loss, damage, expense, liability or
claim arises out of or is based upon any untrue statement or alleged untrue
statement of a material fact (i) contained in the Registration Statement (or in
the Registration Statement as amended by any post-effective amendment thereof by
the Company) or arises out of or is based upon any omission or alleged omission
to state a material fact required to be stated in the Registration Statement or
necessary to make the statements made therein not misleading, or (ii) contained
in the Prospectus (the term Prospectus for the purpose of this Section 9 being
deemed to include any Preliminary Prospectus, the Prospectus and the Prospectus
as amended or supplemented by the Company) or arises out of or is based upon any
omission or alleged omission to state a material fact required to be stated in
the Prospectus or necessary to make the statements made therein, in light of the
circumstances under which they were made, not misleading, and in the case of
both clauses (i) and (ii), except insofar as any such loss, damage, expense,
liability or claim arises out of or is based upon any untrue statement or
alleged untrue statement of a material fact contained in and in conformity with
information furnished in writing by or on behalf of any Underwriter (in its
capacity as such) through you (in your capacity as representatives of the
several Underwriters) to the Company expressly for use with reference to such
Underwriter (in its capacity as such) in such Registration Statement or such
Prospectus or arises out of or is based upon any omission or alleged omission to
state a material fact in connection with such information required to be stated
in such Registration Statement or such Prospectus or necessary to make such
information (with respect to the Prospectus, in the light of the circumstances
under which they were made) not misleading, provided, however, that the
indemnity agreement contained in this subsection (a) with respect to any
Preliminary Prospectus or amended Preliminary Prospectus shall not inure to the
benefit of any Underwriter from whom the person asserting any such loss, damage,
expense, liability or claim purchased the Shares which is the subject thereof if
the Prospectus corrected any such alleged untrue statement or omission and if
such Underwriter failed to send or give a copy of the Prospectus to such person
at or prior to the written confirmation of the sale of such Shares to such
person, unless the failure is the result of noncompliance by the Company with
Section 4(i)(g) hereof and provided, further, that the aggregate liability of
the Parent and the Selling Stockholder under this entire Section 9 shall not
exceed an amount equal to 65% of the net proceeds from the sale of the Shares
hereunder.
31
If any action, suit or proceeding (together, a "Proceeding")
is brought against an Underwriter or any such person in respect of which
indemnity may be sought against the Company, the Parent and the Selling
Stockholder pursuant to the foregoing paragraph, such Underwriter or such person
shall promptly notify the Company, the Parent and the Selling Stockholder in
writing of the institution of such Proceeding and the Company shall assume the
defense of such Proceeding, including the employment of counsel reasonably
satisfactory to such indemnified party and payment of all fees and expenses;
provided, however, that the omission to so notify the Company, the Parent and
the Selling Stockholder shall not relieve the Company, the Parent and the
Selling Stockholder from any liability which the Company, the Parent and the
Selling Stockholder may have to any Underwriter or any such person or otherwise.
Such Underwriter or such person shall have the right to employ its or their own
counsel in any such case, but the fees and expenses of such counsel shall be at
the expense of such Underwriter or of such person unless the employment of such
counsel shall have been authorized in writing by the Company in connection with
the defense of such Proceeding or the Company shall not have, within a
reasonable period of time in light of the circumstances, employed counsel to
have charge of the defense of such Proceeding or such indemnified party or
parties shall have reasonably concluded, based on the written advice of counsel,
that there may be defenses available to it or them which are different from,
additional to or in conflict with those available to the Company, the Parent and
the Selling Stockholder (in which case the Company shall not have the right to
direct the defense of such Proceeding on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
Company, the Parent and the Selling Stockholder and paid as incurred (it being
understood, however, that the Company, the Parent and the Selling Stockholder
shall not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties who
are parties to such Proceeding). The Company, the Parent and the Selling
Stockholder shall not be liable for any settlement of any Proceeding effected
without the Company's written consent but if settled with the written consent of
the Company, the Company, the Parent and the Selling Stockholder jointly and
severally agree to indemnify and hold harmless any Underwriter and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without the Company's written consent if
(i) such settlement is entered into more than 60 business days after receipt by
the indemnifying party of the aforesaid request, (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement and (iii) such indemnified party shall have
given the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding and does
not include an admission of fault, culpability or a failure to act, by or on
behalf of such indemnified party.
32
(b) Each Warrantholder, severally and not jointly, agrees to
indemnify, defend and hold harmless each Underwriter, its partners, directors
and officers, and any person who controls any Underwriter within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, and the successors and
assigns of all the foregoing persons to the same extent as the foregoing
indemnity from the Company, the Parent and the Selling Stockholder to each
Underwriter, but only with reference to written information furnished to the
Company by or on behalf of such Warrantholder specifically for inclusion in the
documents referred to in the foregoing indemnity; provided, that the liability
of each Warrantholder under this subsection (b) shall be limited to an amount
equal to the proceeds to the Warrantholder from the sale of the Warrantholder's
Shares to the Underwriters at the purchase price per share. This indemnity
agreement will be in addition to any liability which a Warrantholder may
otherwise have.
If any Proceeding is brought against an Underwriter or any
such person in respect of which indemnity may be sought against the Company and
a Warrantholder pursuant to the foregoing paragraph, such Underwriter or such
person shall promptly notify the Company and the Warrantholder in writing of the
institution of such Proceeding and the Company and the Warrantholder shall
assume the defense of such Proceeding, including the employment of counsel
reasonably satisfactory to such indemnified party and payment of all fees and
expenses; provided, however, that the omission to so notify the Company and the
Warrantholder shall not relieve the Company and the Warrantholder from any
liability which the Company and the Warrantholder may have to any Underwriter or
any such person or otherwise. Such Underwriter or such person shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Underwriter or of such
person unless the employment of such counsel shall have been authorized in
writing by the Company and the Warrantholder in connection with the defense of
such Proceeding or the Company and the Warrantholder shall not have, within a
reasonable period of time in light of circumstances, employed counsel to have
charge of the defense of such Proceeding or such indemnified party or parties
shall have reasonably concluded that there may be defenses available to it or
them which are different from, additional to or in conflict with those available
to the Company and the Warrantholder (in which case the Company and Selling
Stockholder shall not have the right to direct the defense of such Proceeding on
behalf of the indemnified party or parties), in any of which events such fees
and expenses shall be borne by the Company and the Warrantholder and paid as
incurred (it being understood, however, that the Company and the Warrantholder
shall not be liable for the expenses of more than one separate counsel (in
addition to any local counsel) in any one Proceeding or series of related
Proceedings in the same jurisdiction representing the indemnified parties who
are parties to such Proceeding). The Company and the Warrantholder shall not be
liable for any settlement of any Proceeding effected without the written consent
of the Company and the Warrantholder, but if settled with the written consent of
the Company and the Warrantholder, the Company and the Warrantholder jointly and
severally agree to indemnify and hold harmless any Underwriter and any such
person from and against any loss or liability by reason of such settlement.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second sentence of this
paragraph, then the indemnifying party agrees that it shall be liable for any
settlement of any Proceeding effected without the Company's written consent if
(i) such settlement is entered into more than 60 business days after receipt by
the indemnifying party of the aforesaid request, (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement and (iii) such indemnified party shall have
given the indemnifying party at least 30 days' prior notice of its intention to
settle. No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement of any pending or threatened Proceeding
in respect of which any indemnified party is or could have been a party and
indemnity could have been sought hereunder by such indemnified party, unless
such settlement includes an unconditional release of such indemnified party from
all liability on claims that are the subject matter of such Proceeding and does
not include an admission of fault, culpability or a failure to act, by or on
behalf of such indemnified party.
33
(c) Each Underwriter severally agrees to indemnify, defend and
hold harmless the Company, its directors and officers, and any person who
controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act, the Parent, the Warrantholders and the Selling Stockholder
and the successors and assigns of all of the foregoing persons from and against
any loss, damage, expense, liability or claim (including the reasonable cost of
investigation) which, jointly or severally, the Company, the Parent, the
Warrantholders, the Selling Stockholder or any such person may incur under the
Act, the Exchange Act, the common law or otherwise, insofar as such loss,
damage, expense, liability or claim arises out of or is based upon any untrue
statement or alleged untrue statement of a material fact contained in and in
conformity with information furnished in writing by or on behalf of such
Underwriter (in its capacity as such) through you (in your capacity as
representatives of the several Underwriters) to the Company expressly for use
with reference to such Underwriter (in its capacity as such) in the Registration
Statement (or in the Registration Statement as amended by any post-effective
amendment thereof by the Company), or arises out of or is based upon any
omission or alleged omission to state a material fact in connection with such
information required to be stated in such Registration Statement or necessary to
make such information not misleading, or arises out of or is based upon any
untrue statement or alleged untrue statement of a material fact contained in and
in conformity with information furnished in writing by or on behalf of such
Underwriter (in its capacity as such) through you (in your capacity as
representatives of the several Underwriters) to the Company expressly for use
with reference to such Underwriter (in its capacity as such) in the Prospectus,
or arises out of or is based upon any omission or alleged omission to state a
material fact in connection with such information required to be stated in such
Prospectus or necessary to make such information, in light of the circumstances
under which they were made, not misleading.
If any Proceeding is brought against the Company, the Parent,
the Warrantholders, the Selling Stockholder or any such person in respect of
which indemnity may be sought against any Underwriter pursuant to the foregoing
paragraph, the Company, the Parent, the Warrantholders, the Selling Stockholder
or such person shall promptly notify such Underwriter in writing of the
institution of such Proceeding and such Underwriter shall assume the defense of
such Proceeding, including the employment of counsel reasonably satisfactory to
such indemnified party and payment of all fees and expenses; provided, however,
that the omission to so notify such Underwriter shall not relieve such
Underwriter from any liability which such Underwriter may have to the Company,
the Parent, the Warrantholders, the Selling Stockholder or any such person or
otherwise. The Company, the Parent, the Warrantholders, the Selling Stockholder
or such person shall have the right to employ its own counsel in any such case,
but the fees and expenses of such counsel shall be at the expense of the
Company, the Parent, the Warrantholders, the Selling Stockholder or such person
unless the employment of such counsel shall have been authorized in writing by
such Underwriter in connection with the defense of such Proceeding or such
Underwriter shall not have, within a reasonable period of time in light of the
circumstances, employed counsel to have charge of the defense of such Proceeding
or such indemnified party or parties shall have reasonably concluded, based on
the written advice of counsel, that there may be defenses available to it or
them which are different from or additional to or in conflict with those
available to such Underwriter (in which case such Underwriter shall not have the
right to direct the defense of such Proceeding on behalf of the indemnified
party or parties, but such Underwriter may employ counsel and participate in the
defense thereof but the fees and expenses of such counsel shall be at the
expense of such Underwriter), in any of which events such fees and expenses
shall be borne by such Underwriter and paid as incurred (it being understood,
however, that such Underwriter shall not be liable for the expenses of more than
one separate counsel (in addition to any local counsel) in any one Proceeding or
series of related Proceedings in the same jurisdiction representing the
indemnified parties who are parties to such Proceeding). No Underwriter shall be
liable for any settlement of any such Proceeding effected without the written
consent of such Underwriter but if settled with the written consent of such
Underwriter, such Underwriter agrees to indemnify and hold harmless the Company,
the Parent, the Warrantholders, the Selling Stockholder and any such person from
and against any loss or liability by reason of such settlement. Notwithstanding
the foregoing sentence, if at any time an indemnified party shall have requested
an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel as contemplated by the second sentence of this paragraph, then the
indemnifying party agrees that it shall be liable for any settlement of any
Proceeding effected without its written consent if (i) such settlement is
entered into more than 60 business days after receipt by such indemnifying party
of the aforesaid request, (ii) such indemnifying party shall not have reimbursed
the indemnified party in accordance with such request prior to the date of such
settlement and (iii) such indemnified party shall have given the indemnifying
party at least 30 days' prior notice of its intention to settle. No indemnifying
party shall, without the prior written consent of the indemnified party, effect
any settlement of any pending or threatened Proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such Proceeding.
34
(d) If the indemnification provided for in this Section 9 is
unavailable to an indemnified party under subsections (a), (b) and (c) of this
Section 9 in respect of any losses, damages, expenses, liabilities or claims
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, damages, expenses,
liabilities or claims (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, the Parent, the Warrantholders and
the Selling Stockholder on the one hand and the Underwriters on the other hand
from the offering of the Shares or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company, the Parent, the Warrantholders and the
Selling Stockholder on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
damages, expenses, liabilities or claims, as well as any other relevant
equitable considerations. The relative benefits received by the Company, the
Parent, the Warrantholders and the Selling Stockholder on the one hand and the
Underwriters on the other shall be deemed to be in the same respective
proportions as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the
Company, the Warrantholders and the Selling Stockholder and the total
underwriting discounts and commissions received by the Underwriters, bear to the
aggregate public offering price of the Shares. The relative fault of the
Company, the Parent, the Warrantholders and the Selling Stockholder on the one
hand and of the Underwriters on the other shall be determined by reference to,
among other things, whether the untrue statement or alleged untrue statement of
a material fact or omission or alleged omission relates to information supplied
by the Company, the Parent, the Warrantholders or by the Selling Stockholder or
by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, damages,
expenses, liabilities and claims referred to in this subsection shall be deemed
to include any legal or other fees or expenses reasonably incurred by such party
in connection with investigating, preparing to defend or defending any
Proceeding.
36
(e) The Company, the Parent, the Warrantholders and the
Selling Stockholder and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 9 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (d) above. Notwithstanding
the provisions of this Section 9, in no case shall any Underwriter be required
to contribute any amount in excess of the amount by which the total price at
which the Shares underwritten by such Underwriter and distributed to the public
were offered to the public exceeds the amount of any damage which such
Underwriter has otherwise been required to pay by reason of such untrue
statement or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. The Underwriters' obligations to contribute
pursuant to this Section 9 are several in proportion to their respective
underwriting commitments and not joint.
(f) The indemnity and contribution agreements contained in
this Section 9 and the covenants, warranties and representations of the Company,
the Parent, the Warrantholders and the Selling Stockholder contained in this
Agreement shall remain in full force and effect regardless of any investigation
made by or on behalf of any Underwriter, its partners, directors or officers or
any person (including each partner, officer or director of such person) who
controls any Underwriter within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, or by or on behalf of either of the Company, the Parent,
the Warrantholders or the Selling Stockholder, their directors or officers or
any person who controls any of the Company, the Parent, the Warrantholders or
the Selling Stockholder within the meaning of Section 15 of the Act or Section
20 of the Exchange Act, and shall survive any termination of this Agreement or
the issuance and delivery of the Shares. The Company, the Parent, the
Warrantholders, the Selling Stockholder and each Underwriter agree promptly to
notify each other of the commencement of any Proceeding against it and, in the
case of the Company, the Parent, the Warrantholders or the Selling Stockholder,
against any of the officers, directors or partners of the Company, the Parent,
the Warrantholders or the Selling Stockholder, as the case may be, in connection
with the issuance and sale of the Shares, or in connection with the Registration
Statement or Prospectus.
36
10. Notices. Except as otherwise herein provided, all
statements, requests, notices and agreements shall be in writing or by telegram
and, if to the Underwriters, shall be sufficient in all respects if delivered or
sent to UBS Warburg LLC, 000 Xxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000, Attention:
Syndicate Department; if to the Company, shall be sufficient in all respects if
delivered or sent to the Company at the offices of the Company at Xxx Xxxxx
Xxxxx Xxxxxx, 000xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X.
Xxxxxx, Senior Vice President, General Counsel and Secretary; if to the Parent
or the Selling Stockholder, shall be sufficient in all respects if delivered or
sent to the Selling Stockholder at the offices of the Selling Stockholder at Xxx
Xxxxx Xxxxx Xxxxxx, 000xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X.
Xxxxxx, Senior Vice President, General Counsel and Secretary and, if to the
Warrantholders, shall be sufficient in all respects if delivered or sent to
Xxxxxx X. Wygod, c/o WebMD Corporation, 000 Xxxxx Xx., Xxxxxx 0, Xxxxxxx Xxxx,
Xxx Xxxxxx 00000.
11. Governing Law; Construction. This Agreement and any claim,
counterclaim or dispute of any kind or nature whatsoever arising out of or in
any way relating to this Agreement ("Claim"), directly or indirectly, shall be
governed by, and construed in accordance with, the laws of the State of New
York. The Section headings in this Agreement have been inserted as a matter of
convenience of reference and are not a part of this Agreement.
12. Submission to Jurisdiction. Except as set forth below, no
Claim may be commenced, prosecuted or continued in any court other than the
courts of the State of New York located in the City and County of New York or in
the United States District Court for the Southern District of New York, which
courts shall have jurisdiction over the adjudication of such matters, and you,
the Company, the Parent, the Warrantholders and the Selling Stockholder consent
to the jurisdiction of such courts and personal service with respect thereto.
The Company, the Parent, the Warrantholders and the Selling Stockholder hereby
consent to personal jurisdiction, service and venue in any court in which any
Claim arising out of or in any way relating to this Agreement is brought by any
third party against an Underwriter or any indemnified party. Each Underwriter,
the Company (on its behalf and, to the extent permitted by applicable law, on
behalf of its stockholders and affiliates), the Parent (on its behalf and, to
the extent permitted by applicable law, on behalf of its partners and
affiliates), the Warrantholders and the Selling Stockholder (on its behalf and,
to the extent permitted by applicable law, on behalf of its partners and
affiliates) waives all right to trial by jury in any action, proceeding or
counterclaim (whether based upon contract, tort or otherwise) in any way arising
out of or relating to this Agreement. The Company, the Parent, the
Warrantholders and the Selling Stockholder agree that a final judgment in any
such action, proceeding or counterclaim brought in any such court shall be
conclusive and binding upon the Company, the Parent, the Warrantholders or the
Selling Stockholder, as the case may be, and may be enforced in any other courts
in the jurisdiction of which the Company, the Parent, the Warrantholders or the
Selling Stockholder is or may be subject, by suit upon such judgment.
37
13. Parties at Interest. The Agreement herein set forth has
been and is made solely for the benefit of the Underwriters, the Company, the
Parent, the Warrantholders and the Selling Stockholder and, to the extent
provided in Section 9 and Section 10 hereof, the controlling persons, directors
and officers referred to in such section, and their respective successors,
assigns, heirs, personal representatives and executors and administrators. No
other person, partnership, association or corporation (including a purchaser, as
such purchaser, from any of the Underwriters) shall acquire or have any right
under or by virtue of this Agreement.
14. Counterparts. This Agreement may be signed by the parties
in one or more counterparts which together shall constitute one and the same
agreement among the parties.
15. Successors and Assigns. This Agreement shall be binding
upon the Underwriters, the Company, the Parent, the Warrantholders and the
Selling Stockholder and their successors and assigns and any successor or assign
of any substantial portion of the Company's, the Parent's, the Warrantholders',
and the Selling Stockholder's and any of the Underwriters' respective businesses
and/or assets.
16. Miscellaneous. UBS Warburg LLC, an indirect, wholly owned
subsidiary of UBS AG, is not a bank and is separate from any affiliated bank,
including any U.S. branch or agency of UBS Warburg LLC. Because UBS Warburg LLC
is a separately incorporated entity, it is solely responsible for its own
contractual obligations and commitments, including obligations with respect to
sales and purchases of securities. Securities sold, offered or recommended by
UBS Warburg LLC are not deposits, are not insured by the Federal Deposit
Insurance Corporation, are not guaranteed by a branch or agency, and are not
otherwise an obligation or responsibility of a branch or agency.
A lending affiliate of UBS Warburg LLC may have lending
relationships with issuers of securities underwritten or privately placed by UBS
Warburg LLC. To the extent required under the securities laws, prospectuses and
other disclosure documents for securities underwritten or privately placed by
UBS Warburg LLC will disclose the existence of any such lending relationships
and whether the proceeds of the issue will be used to repay debts owed to
affiliates of UBS Warburg LLC.
38
If the foregoing correctly sets forth the understanding among
the Company, the Parent, the Warrantholders, the Selling Stockholder and the
Underwriters, please so indicate in the space provided below for the purpose,
whereupon this letter and your acceptance shall constitute a binding agreement
among the Company, the Parent, the Selling Stockholder and the several
Underwriters.
Very truly yours,
eSPEED, INC.
By:
----------------------------
Name:
Title:
Accepted and agreed to as of the CANTOR XXXXXXXXXX, X.X.
date first above written
UBS WARBURG LLC By: CF Group Management, Inc.
XXXXXX BROTHERS INC. its Managing General
X.X. XXXXXX SECURITIES INC. Partner
As Representatives of the several By:
Underwriters named in Schedule A hereto ----------------------------
Name:
Title:
By: UBS WARBURG LLC CANTOR XXXXXXXXXX SECURITIES
By: By: Cantor Xxxxxxxxxx, X.X.
--------------------------------------- its Managing General
Name: Partner
Title: Managing Director
By: CF Group Management, Inc.
its Managing General
Partner
By: By:
--------------------------------------- ----------------------------
Name: Name:
Title: Director Title:
By:
----------------------------
Xxxxxx X. Wygod
Title:
By:
----------------------------
P.S. Wygod, Trustee under
the Trust Agreement dated
12/30/87 for the benefit
of Xxxx Xxxxxx
SCHEDULE A
Number of
Underwriter Firm Shares
----------- -----------
UBS WARBURG LLC
XXXXXX BROTHERS INC.
X.X. XXXXXX SECURITIES INC.
CANTOR XXXXXXXXXX & CO.
-----------
Total..................................
===========
SCHEDULE B
Number of Firm
Warrantholders Shares to be Sold
-------------- -----------------
XXXXXX X. WYGOD................................................. 110,000
XXXXXX X. WYGOD, TRUSTEE UNDER THE TRUST
AGREEMENT DATED 12/30/87 FOR THE BENEFIT OF
XXXX XXXXXX..................................................... 25,000
-------
Total............... 135,000
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