EXECUTION COPY
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REGISTRATION RIGHTS AGREEMENT
between
eSpeed, INC.
and
THE INVESTORS NAMED HEREIN
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TABLE OF CONTENTS
Page
RECITALS ......................................................................1
ARTICLE I
DEMAND REGISTRATIONS..................................................1
1.1 Requests for Registration....................................1
1.2 Number of Demand Registrations; Expenses.....................2
1.3 Effective Registration Statement.............................2
1.4 Priority on Demand Registrations.............................2
1.5 Subsequent Registration Rights...............................2
ARTICLE II
PIGGYBACK REGISTRATIONS...............................................3
2.1 Right to Piggyback...........................................3
2.2 Piggyback Expenses...........................................3
2.3 Priority on Primary Registrations............................3
2.4 Priority on Secondary Registrations..........................3
ARTICLE III
HOLDBACK AGREEMENTS...................................................4
ARTICLE IV
REGISTRATION PROCEDURES...............................................4
ARTICLE V
REGISTRATION EXPENSES.................................................6
5.1 Registration Expenses........................................6
5.2 Sellers' Expenses............................................7
ARTICLE VI
UNDERWRITTEN OFFERINGS................................................7
6.1 Demand Underwritten Offerings................................7
6.2 Incidental Underwritten Offerings............................7
ARTICLE VII
INDEMNIFICATION.......................................................7
7.1 Company's Indemnification Obligations........................7
7.2 Holder's Indemnification Obligations.........................8
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7.3 Notices; Defense; Settlement.................................9
7.4 Indemnity Provision.........................................10
7.5 Contribution Based on Relative Fault........................10
7.6 Payments....................................................11
ARTICLE VIII
PARTICIPATION IN UNDERWRITTEN REGISTRATIONS..........................11
ARTICLE IX
DEFINITIONS..........................................................11
9.1 Terms.......................................................11
9.2 Defined Terms in Corresponding Sections.....................13
ARTICLE X
MISCELLANEOUS........................................................13
10.1 Remedies....................................................13
10.2 Amendments and Waivers......................................14
10.3 Successors and Assigns......................................14
10.4 Notices.....................................................14
10.5 Headings....................................................15
10.6 Gender......................................................15
10.7 Invalid Provisions..........................................15
10.8 Governing Law...............................................15
10.9 Counterparts................................................15
10.10 Deferral...................................................15
10.11 Additional Investors........................................16
ARTICLE XI RULE 144 REPORTING.................................................16
ii
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of
_____________ between eSpeed, Inc., a Delaware corporation (the "Company"), and
the other parties that have executed the signature pages hereto (the "Initial
Investors") or otherwise execute a joinder agreement and become a party hereto
(collectively, the "Investors").
RECITALS
WHEREAS, the Company and the Initial Investors have entered
into an Assignment and Assumption Agreement, dated as of the date hereof,
pursuant to which the Company issued certain securities to each of the Initial
Investors;
NOW THEREFORE, in consideration of the mutual covenants and
agreements and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
ARTICLE I
DEMAND REGISTRATIONS
1.1 Requests for Registration. Subject to Sections 1.2 and 1.3
hereof, the Required Investors may request, in writing, registration under the
Securities Act of all or part of their Registrable Securities. Within twenty
(20) days after receipt of any such request, the Company will give notice of
such request to all other Investors. Thereafter, the Company will use all
reasonable efforts to effect the registration under the Securities Act (i) on
Form S-1 or any similar long-form registration statement (a "Long-Form
Registration") or (ii) on Form S-3 or any similar short-form registration
statement (a "Short-Form Registration") if the Company qualifies to effect a
Short Form Registration, and will include in such registration all Registrable
Securities with respect to which the Company has received written requests for
inclusion therein within twenty (20) days after the receipt of the Company's
notice, subject to the provisions of Section 1.4. All registrations requested
pursuant to this Section 1.1 are referred to herein as "Demand Registrations".
The Company shall not be required to effect any Demand Registration requested by
a Required Investor if either (a) within the six (6) months preceding the
receipt by the Company of such request, the Company has filed a registration
statement to which the Piggyback Registration rights set forth in Article II
hereof apply or (b) such Required Investor may sell all of the Registrable
Securities requested to be included in such Demand Registration without
registration under the Securities Act, pursuant to the exemption provided by (i)
Rule 144(k) under the Securities Act, as such rule may be amended from time to
time, or (ii) any similar rule or regulation hereafter adopted by the
Commission.
1.2 Number of Demand Registrations; Expenses. Subject to
Sections 1.1 and 1.3 hereof, the Required Investors shall be entitled to an
aggregate of three (3) Demand
Registrations, with no more than one (1) of such Demand Registrations being a
Long-Form Registration; provided, however, that the Company need not effect any
requested Demand Registration unless the expected proceeds of such registration
exceed [$1,000,000.] The Company will pay all Registration Expenses in
connection with any Demand Registration, including any Registration Statement
that is not deemed to be effected pursuant to the provisions of Section 1.3
hereof.
1.3 Effective Registration Statement. A registration requested
pursuant to Section 1.1 of this Agreement shall not be deemed to have been
effected (i) unless a Registration Statement with respect thereto has been
declared effective by the Commission, (ii) if after it has become effective,
such registration is interfered with by any stop order, injunction or other
order or requirement of the Commission or other governmental agency or court for
any reason, and, as a result thereof, the Registrable Securities covered thereby
have not been sold or (iii) the Registration Statement does not remain effective
for a period of at least 180 days beyond the effective date thereof or, with
respect to an underwritten offering of Registrable Securities, until ninety (90)
days after the commencement of the distribution by the holders of the
Registrable Securities included in such Registration Statement. If a
registration requested pursuant to this Article I is deemed not to have been
effected as provided in this Section 1.3, then the Company shall continue to be
obligated to effect the number of Demand Registrations set forth in Section 1.2
without giving effect to such requested registration.
1.4 Priority on Demand Registrations. If the Company includes
in any underwritten Demand Registration any securities which are not Registrable
Securities and the managing underwriters advise the Company in writing that in
their opinion the number of Registrable Securities and other shares of Common
Stock proposed to be included exceeds the number of Registrable Securities and
other securities which can be sold in such offering, the Company will first
include in such registration, to the exclusion of any other securities, the
number of Registrable Securities requested to be included which, in the opinion
of such underwriters, can be sold, pro rata among the Investors on the basis of
the amount of Registrable Securities requested to be offered thereby.
1.5 Subsequent Registration Rights. From and after the date of
this Agreement, in the event the Company shall, without the written consent of a
majority of the holders of Registrable Securities, enter into any agreement with
holders or a prospective holder of any securities of the Company giving such
holder or prospective holder registration rights the terms of which are more
favorable in the aggregate than the registration rights granted to the holders
of Registrable Securities hereunder, the Company shall notify the holders of
Registrable Securities of such more favorable terms and this agreement shall be
modified to reflect such terms.
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ARTICLE II
PIGGYBACK REGISTRATIONS
2.1 Right to Piggyback. Following the closing of the Public
Offering, whenever the Company proposes to register any of its equity securities
under the Securities Act (other than pursuant to a Demand Registration and other
than for use in a Rule 145 transaction or for registrations for employee plans)
and the registration form to be used may be used for the registration of
Registrable Securities (a "Piggyback Registration"), the Company will give
notice to all Investors of its intention to effect such a registration and will
include in such registration all Registrable Securities with respect to which
the Company has received written requests for inclusion therein within fifteen
(15) days after the receipt of the Company's notice, subject to the provisions
of Section 2.3 and 2.4 hereof. Such requests for inclusion shall specify the
number of Registrable Securities intended to be disposed of and the intended
method of distribution thereof.
2.2 Piggyback Expenses. The Registration Expenses of the
Investors will be paid by the Company in all Piggyback Registrations.
2.3 Priority on Primary Registrations. If a Piggyback
Registration is an underwritten primary registration on behalf of the Company,
and the managing underwriters advise the Company that in their opinion the
number of securities requested to be included in such registration exceeds the
number which can be sold in such offering, the Company will include in such
registration (i) first, the securities the Company proposes to sell, (ii)
second, that number of the Registrable Securities proposed to be included in
such registration, pro rata among the respective holders thereof based upon the
total number of shares which such holders proposed to include in such
registration and (iii) that number of other shares of Common Stock proposed to
be included in such registration, pro rata among the respective holders thereof
based upon the total number of shares which such holders propose to include in
such registration.
2.4 Priority on Secondary Registrations. If a Piggyback
Registration is not a Demand Registration pursuant to Article I hereof but is an
underwritten secondary registration on behalf of holders (other than the
Investors) of the Company's securities, and the managing underwriters advise the
Company that in their opinion the number of securities requested to be included
in such registration exceeds the number which can be sold in such offering, the
Company will include in such registration (i) first, the number of shares of
Common Stock requested to be included by holders and (ii) second, the
Registrable Securities requested to be included in such registration by the
Investors pro rata based upon the number of shares which such Investors
requested to be included.
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ARTICLE III
HOLDBACK AGREEMENTS
Holdback Obligations. Each holder of Registrable Securities
agrees not to effect any public sale or distribution of equity securities of the
Company, or any securities convertible, exchangeable or exercisable for or into
such securities, during the fifteen (15) days prior to, and the 90-day period
beginning on, the effective date of any underwritten Demand Registration (except
as part of such underwritten registration), unless (i) the managing underwriters
of the registered public offering otherwise agree or (ii) the executive
officers, directors and 10% stockholders of the Company shall not be similarly
restricted.
ARTICLE IV
REGISTRATION PROCEDURES
Whenever holders of Registrable Securities have requested that
any Registrable Securities be registered pursuant to this Agreement, the Company
will use reasonable efforts to effect the registration and the sale of such
Registrable Securities in accordance with the intended method of disposition
thereof as quickly as possible, and pursuant thereto the Company will as
expeditiously as reasonably possible:
(a) prepare and file with the Commission a Registration
Statement with respect to such Registrable Securities and use all reasonable
efforts to cause such Registration Statement to become and remain effective
until the completion of the distribution contemplated thereby; provided, that as
promptly as practicable before filing a Registration Statement or Prospectus or
any amendments or supplements thereto, the Company will (i) furnish to counsel
selected by the holders of Registrable Securities copies of all such documents
proposed to be filed and (ii) notify each holder of Registrable Securities
covered by such Registration Statement of (x) any request by the Commission to
amend such Registration Statement or amend or supplement any Prospectus, or (y)
any stop order issued or threatened by the Commission, and take all reasonable
actions required to prevent the entry of such stop order or to promptly remove
it if entered;
(b) (i) prepare and file with the Commission such amendments
and supplements to such Registration Statement and the Prospectus used in
connection therewith as may be necessary to keep such Registration Statement
effective until all Registrable Securities covered by such Registration
Statement are sold in accordance with the intended plan of distribution set
forth in such Registration Statement and (ii) comply with the provisions of the
Securities Act with respect to the disposition of all securities covered by such
Registration Statement during such period in accordance with the intended
methods of disposition by the sellers thereof set forth in such Registration
Statement;
(c) furnish to each seller of Registrable Securities, without
charge, such number of conformed copies of such Registration Statement, each
amendment and supplement thereto, the Prospectus included in such Registration
Statement (including each preliminary Prospectus and, in each case including all
exhibits) and such other documents as such seller may
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reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such seller;
(d) use all reasonable efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of such
jurisdictions in the United States as any seller thereof shall reasonably
request, to keep such registration or qualification in effect for so long as
such Registration Statement remains in effect and do any and all other acts and
things which may be reasonably necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such seller; provided, however, that the Company will not be required
to (i) qualify generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this clause (d), (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of process
in any such jurisdiction;
(e) use all reasonable efforts (if the offering is
underwritten) to furnish to each seller of Registrable Securities a signed copy,
addressed to such seller (and the underwriters, if any) of an opinion of counsel
for the Company or special counsel to the selling stockholders, dated the
effective date of such Registration Statement (and, if such Registration
Statement includes an underwritten public offering, dated the date of the
closing under the underwriting agreement), covering substantially the same
matters with respect to such Registration Statement (and the Prospectus included
therein) as are customarily covered in opinions of issuer's counsel delivered to
the underwriters in underwritten public offerings, and such other legal matters
as the seller (or the underwriters, if any) may reasonably request;
(f) notify each seller of Registrable Securities, at a time
when a Prospectus relating thereto is required to be delivered under the
Securities Act, of the happening of any event known to the Company as a result
of which the Prospectus included in such Registration Statement, as then in
effect, contains an untrue statement of a material fact or omits to state any
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and, at the request of any such seller, the Company will prepare and furnish
such seller a reasonable number of copies of a supplement to or an amendment of
such Prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such Prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
(g) cause all such Registrable Securities to be listed on each
securities exchange and quotation system on which similar securities issued by
the Company are then listed and, if such securities are not then listed on a
national securities exchange or the Nasdaq Stock Market, cause them to be so
listed or qualified; provided, that the Company then meets or is reasonably
capable of meeting the eligibility requirements for such an exchange or system
and such exchange or system is reasonably satisfactory to the managing
underwriters, and to enter
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into such customary agreements as may be required in furtherance thereof,
including, without limitation, listing applications and indemnification
agreements in customary form;
(h) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such Registration
Statement;
(i) make available for inspection by any seller of Registrable
Securities, any underwriter participating in any disposition pursuant to such
Registration Statement and any attorney, accountant or other agent retained by
any such seller or underwriter, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the Company's
officers, directors, employees and independent accountants to supply all
information reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such Registration Statement to enable
them to conduct a reasonable investigation within the meaning of the Securities
Act;
(j) subject to other provisions hereof, use all reasonable
efforts to cause such Registrable Securities covered by such Registration
Statement to be registered with or approved by such other governmental agencies
or authorities or self-regulatory organizations as may be necessary to enable
the sellers thereof to consummate the disposition of such Registrable
Securities; and
(k) promptly notify the holders of the Registrable Securities
of the issuance of any stop order by the Commission or the issuance by any state
securities commission or other regulatory authority of any order suspending the
qualification or exemption from qualification of any of the Registrable
Securities under state securities or "blue sky" laws, and use every reasonable
effort to obtain the lifting at the earliest possible time of any stop order
suspending the effectiveness of any Registration Statement or of any order
preventing or suspending the use of any preliminary Prospectus.
ARTICLE V
REGISTRATION EXPENSES
5.1 Registration Expenses. All registration and filing fees,
fees and expenses of compliance with securities or blue sky laws (including the
fees and expenses of counsel in connection with blue sky qualifications of the
Registrable Securities), printing expenses, listing fees for securities to be
registered on a national securities exchange or the Nasdaq Stock Market and all
independent certified public accountants, underwriters (excluding discounts and
commissions) and other Persons retained by the Company and reasonable fees and
expenses of one counsel to the holders representing more than 50% of the
Registrable Securities registered in connection with the subject registration
(all such expenses being herein called "Registration Expenses"), will be borne
as provided in Sections 1.2 and 2.2 of this Agreement.
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5.2 Sellers' Expenses. The Company shall have no obligation to
pay any underwriting discounts or commissions attributable to the sale of
Registered Securities, which expenses will be borne by all sellers of securities
included in such registration in proportion to the aggregate selling price of
the securities to be so registered.
ARTICLE VI
UNDERWRITTEN OFFERINGS
6.1 Underwriting Agreement. If requested by the underwriters
for any underwritten offering of Registrable Securities pursuant to a Demand
Registration, the Company will enter into an underwriting agreement with such
underwriters for such offering, such agreement to contain such representations
and warranties by the Company and such other terms as are generally included in
agreements of this type, including, without limitation, indemnities customarily
included in such agreements. The holders of the Registrable Securities will
cooperate in good faith with the Company in the negotiation of the underwriting
agreement.
6.2 Obligations of Participants in Underwritten Offerings. No
Person may participate in any underwritten registration hereunder unless such
Person (i) agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Person or Persons entitled hereunder
to approve such arrangements and (ii) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements, escrow agreements and
other documents required under the terms of such underwriting arrangements and
consistent with the provisions of this Agreement.
ARTICLE VII
INDEMNIFICATION
7.1 Company's Indemnification Obligations. The Company agrees
to indemnify and hold harmless each of the holders of any Registrable Securities
covered by any Registration Statement referred to herein and each other Person,
if any, who controls such holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act (collectively, the "Holder
Indemnitees"), as follows:
(i) against any and all loss, liability, claim,
damage or expense arising out of or based upon an untrue
statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment or
supplement thereto), including all documents incorporated
therein by reference, or in any preliminary Prospectus or
Prospectus (or any amendment or supplement thereto) or the
omission or alleged omission therefrom of a material fact
required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading;
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(ii) against any and all loss, liability, claim,
damage and expense to the extent of the aggregate amount paid
in settlement of any litigation, investigation or proceeding
by any governmental agency or body, commenced or threatened,
or of any claim based upon any such untrue statement or
omission or any such alleged untrue statement or omission, if
such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense incurred by them in
connection with investigating, preparing or defending against
any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or any
claim based upon any such untrue statement or omission or any
such alleged untrue statement or omission, to the extent that
any such expense is not paid under clause (i) or (ii) above;
provided, that this indemnity does not apply to any loss, liability, claim,
damage or expense to the extent arising out of an untrue statement or alleged
untrue statement or omission or alleged omission made in reliance upon and in
conformity with information furnished to the Company by or on behalf of any
holder expressly for use in the preparation of any Registration Statement (or
any amendment or supplement thereto), including all documents incorporated
therein by reference, or in any preliminary Prospectus or Prospectus (or any
amendment or supplement thereto); and provided further, that the Company will
not be liable to any holder or any other Holder Indemnitee under the indemnity
agreement in this Section 7.1 with respect to any preliminary Prospectus or the
final Prospectus or the final Prospectus as amended or supplemented, as the case
may be, to the extent that any such loss, liability, claim, damage or expense of
such Holder Indemnitee results from the fact that such holder sold Registrable
Securities to a Person to whom there was not sent or given, at or prior to the
written confirmation of such sale, a copy of the final Prospectus or of the
final Prospectus as then amended or supplemented, whichever is most recent, if
the Company has previously and timely furnished copies thereof to such holder.
7.2 Holder's Indemnification Obligations. In connection with
any Registration Statement in which a holder of Registrable Securities is
participating, each such holder agrees to indemnify and hold harmless (in the
same manner and to the same extent as set forth in Section 7.1 of this
Agreement) the Company and each Person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act with respect to any statement or alleged statement in or omission or alleged
omission from such Registration Statement, any preliminary, final or summary
Prospectus contained therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission was made about
such holder in reliance upon and in conformity with information furnished to the
Company by or on behalf of such holder. The obligations of each holder pursuant
to this Section 7.2 are to be several and not joint; provided, that, with
respect to each claim pursuant to this Section 7.2, each such holder's maximum
liability under this Section shall be limited to an amount equal to the net
proceeds actually received by such holder (after
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deducting any underwriting discount and expenses) from the sale of Registrable
Securities being sold pursuant to such Registration Statement or Prospectus by
such holder.
7.3 Notices; Defense; Settlement. Promptly after receipt by an
indemnified party hereunder of written notice of the commencement of any action
or proceeding involving a claim referred to in Section 7.1 or Section 7.2 of
this Agreement, such indemnified party will, if a claim in respect thereof is to
be made against an indemnifying party, give written notice to the latter of the
commencement of such action; provided, that the failure of any indemnified party
to give notice as provided herein shall not relieve the indemnifying party of
its obligations under Section 7.1 or Section 7.2 of this Agreement except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any such action is brought against an indemnified party,
the indemnifying party will be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified,
to the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses subsequently incurred by the latter in connection with the
defense thereof, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may exist
in respect of such claim, in which case the indemnifying party shall not be
liable for the fees and expenses of (i) more than one counsel for all holders of
Registrable Securities, selected by the Required Investors or (ii) more than one
counsel for the Company in connection with any one action or separate but
similar or related actions. An indemnifying party who is not entitled to, or
elects not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified by such
indemnifying party with respect to such claim, unless in the reasonable judgment
of any indemnified party a conflict of interest may exist between such
indemnified party and any other of such indemnified parties with respect to such
claim, in which event the indemnifying party shall be obligated to pay the fees
and expenses of such additional counsel or counsels. The indemnifying party will
not, without the prior written consent of each indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or threatened
claim, action, suit or proceeding in respect of which indemnification may be
sought hereunder (whether or not such indemnified party or any Person who
controls such indemnified party is a party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes an
unconditional release of such indemnified party from all liability arising out
of such claim, action, suit or proceeding. Notwithstanding anything to the
contrary set forth herein, and without limiting any of the rights set forth
above, in any event any party will have the right to retain, at its own expense,
counsel with respect to the defense of a claim.
7.4 Indemnity Provision. The Company and each holder of
Registrable Securities requesting registration shall provide for the foregoing
indemnity (with appropriate modifications) in any underwriting agreement with
respect to any required registration or other qualification of securities under
any Federal or state law or regulation of any governmental authority other than
the Securities Act.
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7.5 Contribution Based on Relative Fault. If the
indemnification provided for in Sections 7.1 and 7.2 of this Agreement is
unavailable or insufficient to hold harmless an indemnified party under such
Sections, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in Section 7.1 or Section 7.2 of this Agreement in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand, and the indemnified party on the other, in connection
with statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations,
including, without limitation, the relative benefits received by each party from
the offering of the securities covered by such Registration Statement, the
parties' relative knowledge and access to information concerning the matter with
respect to which the claim was asserted and the opportunity to correct and
prevent any statement or omission. The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the indemnifying party or the indemnified
party and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statements or omission. The
parties hereto agree that it would not be just and equitable if contributions
pursuant to this Section 7.5 were to be determined by pro rata or per capita
allocation (even if the underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the first sentence of this Section 7.5.
The amount paid by an indemnified party as a result of the losses, claims,
damages or liabilities referred to in the first sentence of this Section 7.5
shall be deemed to include any legal or other expenses reasonably incurred by
such indemnified party in connection with investigating or defending any action
or claim (which shall be limited as provided in Section 7.3 of this Agreement if
the indemnifying party has assumed the defense of any such action in accordance
with the provisions thereof) which is the subject of this Section 7.5. Promptly
after receipt by an indemnified party under this Section 7.5 of notice of the
commencement of any action against such party in respect of which a claim for
contribution may be made against an indemnifying party under this Section 7.5,
such indemnified party shall notify the indemnifying party in writing of the
commencement thereof if the notice specified in Section 7.3 of this Agreement
has not been given with respect to such action; provided, that the omission to
so notify the indemnifying party shall not relieve the indemnifying party from
any liability which it may otherwise have to any indemnified party under this
Section 7.5, except to the extent that the indemnifying party is actually
prejudiced by such failure to give notice. The Company and each holder of
Registrable Securities agrees with each other and the underwriters of the
Registrable Securities, if requested by such underwriters, that (i) the
underwriters' portion of such contribution shall not exceed the underwriting
discount and (ii) that the amount of such contribution shall not exceed an
amount equal to the net proceeds actually received by such indemnifying party
from the sale of Registrable Securities in the offering to which the losses,
liabilities, claims, damages or expenses of the indemnified parties relate. No
Person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
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7.6 Payments. The indemnification required by this Article VII
shall be made by periodic payments of the amount thereof during the course of
the investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred.
ARTICLE VIII
DEFINITIONS
8.1 Terms. As used in this Agreement, the following defined
terms shall have the meanings set forth below:
"Business Day" means a day other than Saturday, Sunday or any
day on which banks located in the State of New York are authorized or obligated
to close.
"Class A Common Stock" means the Class A Common Stock, par
value $.01 per share, of the Company and any securities into which the Class A
Common Stock shall have been changed or any securities resulting from any
reclassification or recapitalization of the Class A Common Stock.
"Class B Common Stock" means the Class B Common Stock, par
value $.01 per share, of the Company and any securities into which the Class B
Common Stock shall have been changed or any securities resulting from any
reclassification or recapitalization of the Class B Common Stock.
"Commission" means the U.S. Securities and Exchange
Commission.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar Federal statute then in effect, and any reference to a
particular section thereof shall include a reference to the equivalent section,
if any, of any such similar Federal statute, and the rules and regulations
thereunder.
"Person" means any individual, corporation, partnership,
association, trust or other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Prospectus" means the Prospectus included in any Registration
Statement (including without limitation, a Prospectus that disclosed information
previously omitted from a Prospectus filed as part of an effective Registration
Statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any Prospectus supplement, with respect to the terms
of the offering of any portion of the securities covered by such Registration
Statement, and all other amendments and supplements to the Prospectus,
11
including post-effective amendments, and all material incorporated by reference
or deemed to be incorporated by reference in such Prospectus.
"Public Offering" means the consummation of the initial
underwritten public offering of Class A Common Stock registered under the
Securities Act of 1933, as amended.
"Registrable Securities" means (i) the Class A Common Stock
issued or issuable at any time to an Initial Investor, including, without
limitation, in connection with the conversion of any Class B Common Stock into
Class A Common Stock or the exercise of any warrant or option to purchase any
Class A Common Stock and (ii) any securities issued or issuable with respect to
such shares of Class A Common Stock in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization. Registrable
Securities will continue to maintain their status as Registrable Securities in
the hands of any transferee from an Initial Investor provided such transferee
executes a joinder agreement described by Section 9.11. As to any particular
Registrable Securities, such securities will cease to be Registrable Securities
when they have been (x) effectively registered under the Securities Act and
disposed of in accordance with the registration statement covering them or (y)
transferred pursuant to Rule 144 (or any similar rule then in force) under the
Securities Act or otherwise transferred and, in each case, new certificates for
them not bearing a restrictive Securities Act legend have been delivered by the
Company and can be sold without complying with the registration requirements of
the Securities Act.
"Registration Statement" means any Registration Statement of
the Company which covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective amendments,
all exhibits and all material incorporated by reference in such Registration
Statement.
"Required Investors" means, as of the date of any
determination thereof, the holders of Registrable Securities representing an
aggregate of not less than 25% (by number of shares) of all Registrable
Securities.
"Securities Act" means the Securities Act of 1933, as amended,
or any similar Federal statute then in effect, and any reference to a particular
section thereof shall include a reference to a comparable section, if any, of
any such similar Federal statute, and the rules and regulations thereunder.
8.2 Defined Terms in Corresponding Sections. The following
defined terms, when used in this Agreement, shall have the meaning ascribed to
them in the corresponding Sections of this Agreement listed below:
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"Agreement" -- Preamble
"Company" -- Preamble
"Demand Registrations" -- Section 1.1
"Holder Indemnitees" -- Section 7.1
"Long-Form Registration" -- Section 1.1
"Piggyback Registration" -- Section 2.1
"Registration Expenses" -- Section 5.1
"Short-Form Registration" -- Section 1.1
"Initial Investors" -- Preamble
"Investors" -- Preamble
ARTICLE IX
MISCELLANEOUS
9.1 Remedies. In the event of a breach by any party to this
Agreement of its obligations under this Agreement, any party injured by such
breach, in addition to being entitled to exercise all rights granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The parties agree that the provisions of this
Agreement shall be specifically enforceable, it being agreed by the parties that
the remedy at law, including monetary damages, for breach of any such provision
will be inadequate compensation for any loss and that any defense in any action
for specific performance that a remedy at law would be adequate is waived.
9.2 Amendments and Waivers. Except as otherwise provided
herein, no modification, amendment or waiver of any provision of this Agreement
will be effective against the Company or any holder of Registrable Securities,
unless such modification, amendment or waiver is approved in writing by the
Company and the Investors representing a majority of the Registrable Securities
then outstanding. The failure of any party to enforce any of the provisions of
this Agreement will in no way be construed as a waiver of such provisions and
will not affect the right of such party thereafter to enforce each and every
provision of this Agreement in accordance with its terms.
9.3 Successors and Assigns. All covenants and agreements in
this Agreement by or on behalf of any of the parties hereto will bind and inure
to the benefit of the respective successors and assigns of the parties hereto
whether so expressed or not.
9.4 Notices. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile transmission or
mailed by pre-paid registered or certified mail, return receipt requested or
mailed by overnight courier prepaid to the parties at the following addresses or
facsimile numbers:
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If to the Company, to:
eSpeed, Inc.
One World Trade Center
000xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile No.: (000) 000-0000
Attn.: Xxxxxxx X. Xxxxxx
with a copy to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile No.: (000) 000-0000
Attn.: Xxxxxxxxxxx X. Xxxxxx
If to any Investor, to:
The last address (or facsimile number) for such
Person set forth in the records of the Company.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 9.4, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 9.4, be deemed given upon receipt of confirmation,
(iii) if delivered by mail in the manner described above to the address as
provided in this Section 9.4, be deemed given on the earlier of the third full
Business Day following the day of mailing or upon receipt, and (iv) if delivered
by overnight courier to the address provided in this Section 9.4, be deemed
given on the earlier of the first Business Day following the date sent by such
overnight courier or upon receipt. Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
9.5 Headings. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
9.6 Gender. Whenever the pronouns "he" or "his" are used
herein they shall also be deemed to mean "she" or "hers" or "it" or "its"
whenever applicable. Words in the singular shall be read and construed as though
in the plural and words in the plural shall be construed as though in the
singular in all cases where they would so apply.
9.7 Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law,
and if the rights or obligations
14
of any party hereto under this Agreement will not be materially and adversely
affected thereby, (i) such provision will be fully severable, (ii) this
Agreement will be construed and enforced as if such illegal, invalid or
unenforceable provision had never comprised a part hereof, (iii) the remaining
provisions of this Agreement will remain in full force and effect and will not
be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom and (iv) in lieu of such illegal, invalid or unenforceable
provision, there will be added automatically as a part of this Agreement a
legal, valid and enforceable provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible.
9.8 Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of New York;
provided, however, that all provisions of this Agreement within the purview of
the General Corporation Law of the State of Delaware shall be governed by such
law.
9.9 Counterparts. This Agreement may be executed in any number
of counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
9.10 Deferral. Notwithstanding the provisions of Articles I
and II, the Company's obligations to file a Registration Statement, or cause
such Registration Statement to become and remain effective, shall be suspended
for a period not to exceed 90 consecutive days if there exists at the time
material non-public information relating to the Company that, in the reasonable
opinion of the Company's board of directors or counsel, should not be disclosed;
provided further, that the Company may not invoke the foregoing provision more
than two (2) times in any twelve (12) month period.
9.11 Additional Investors. Any transferee of Registrable
Securities from an Initial Investor shall be entitled to the benefits of this
Agreement upon execution by such transferee of a joinder agreement in form
reasonably satisfactory to the Company stating that such transferee agrees to be
bound by the terms hereof as an "Investor."
ARTICLE X
RULE 144 REPORTING
The Company hereby agrees as follows:
(a) The Company shall use its best efforts to make
and keep public information available, as those terms are understood and defined
in Rule 144 under the Securities Act, at all times from and after 90 days
following the effective date of the first Public Offering.
(b) The Company shall use its best efforts to file
with the Commission in a timely manner all reports and other documents as the
Commission may
15
prescribe under Section 13(a) or 15(d) of the Exchange Act at any time after the
Company has become subject to such reporting requirements of the Exchange Act.
(c) The Company shall furnish to each holder of
Registrable Securities forthwith upon request (i) a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 (at any
time from and after 90 days following the effective date of the first Public
Offering), and of the Securities Act and the Exchange Act (at any time after it
has become subject to such reporting requirements), (ii) a copy of the most
recent annual or quarterly report of the Company, and (iii) such other reports
and documents so filed as a holder may reasonably request to avail itself of any
rule or regulation of the Commission allowing a holder of Registrable Securities
to sell any such securities without registration.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the date first above written.
COMPANY:
eSpeed, INC.
By:
-----------------------------------
Name:
Title:
INVESTORS:
CANTOR XXXXXXXXXX SECURITIES
By:
-----------------------------------
Name:
Title:
[Other Cantor Entities]
[Signature Page to Registration Rights Agreement]
