ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS AGREEMENT is made and entered into as of ________ __, 1999, among
Cantor Xxxxxxxxxx, X.X., a Delaware limited partnership ("CFLP"), Cantor
Xxxxxxxxxx Securities, a New York general partnership ("CFS"), CFFE, LLC, a
Delaware limited liability company ("CFFE"), Cantor Xxxxxxxxxx L.L.C., a
Delaware limited liability company ("CF"), Cantor Xxxxxxxxxx Shoken Kaisha
Limited, a Delaware corporation ("CFSKL"), CFPH, LLC, a Delaware limited
liability company ("CFPH"), and Cantor Xxxxxxxxxx & Co., a New York general
partnership ("CF&Co" and, together with XXXX, XXX, XXXX, XX, XXXXX and CFPH, the
"Assignors"), and eSpeed, Inc., a Delaware corporation ("Assignee").
W I T N E S S E T H:
WHEREAS, Assignee is a recently-formed company that has been organized
to engage in the business of operating interactive electronic marketplaces in
accordance with the (i) Joint Services Agreement (as hereinafter defined) and
(ii) Administrative Services Agreement (as hereinafter defined) (the
"Business"), initially to be used principally by financial and wholesale market
participants to trade in fixed income securities, futures, options and other
financial instruments and including the eSpeed system described in the
prospectus attached hereto (the "Prospectus") relating to Assignee's initial
public offering.
WHEREAS, each of the Assignors owns or has the right to use, among
other things, certain hardware, software, technologies, systems and other
intellectual property and agreements that are principally used in the Business.
WHEREAS, Assignee desires to acquire such assets from the Assignors in
exchange for the issuance to each Assignor of the number of shares of Class B
Common Stock, par value $.01, of Assignee (the "Class B Shares") set out
opposite the name of such Assignor on Schedule 1.04 hereto, being [ ] Class B
Shares in the aggregate for all of the Assignors (the "Consideration").
WHEREAS, each Assignor has determined that its share of the
Consideration represents valuable and fair consideration for the transfer of its
portion of such assets to Assignee and has determined that it is in its best
interest to transfer its portion of such assets to Assignee in return for the
Consideration.
NOW THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein, and upon the terms and
conditions hereinafter set forth, the parties hereby agree as follows:
ARTICLE 1
TERMS OF ASSIGNMENT
1.01. Assignment. On the terms and subject to the conditions in this
Agreement and for the Consideration specified herein, at the Closing (as
hereinafter defined), the Assignors shall sell, transfer, convey, assign and
deliver to Assignee, and Assignee shall purchase, acquire and accept from the
Assignors, free and clear of all mortgages, pledges, assessments, security
interests, conditional sale or title retention contracts, leases, liens, adverse
claims, Taxes (as hereinafter defined), levies, charges, options, rights of
first refusal, transfer restrictions or other encumbrances of any nature, or any
contracts, agreements or understandings to grant any of the foregoing
(collectively, "Liens"), all of the Assignors' right, title and interest in, to
and under the following assets and rights, including, but not limited to, the
assets and rights identified on Schedule 1.01, in each case to the extent used
or held for use principally in the Business, but excluding the Excluded Assets
(as hereinafter defined) (the "Assignment"):
(a) all machinery, equipment, computers, network servers, monitors,
servers and other related items of tangible personal property of the Assignors,
principally used in the Business (the "Equipment");
(b) all fictional business names, trade names, d/b/a names, logos,
Internet domain names (including, without limitation, xxx.xXxxxx.xxx),
trademarks, service marks (including, without limitation, eSpeed(Service Xxxx)),
trade dress and any and all federal, state, local and foreign applications,
registrations and renewals therefor, and all the goodwill associated therewith
principally used in the Business (collectively, "Marks"); all copyrights in both
published works and unpublished works, and in online works such as Internet web
sites, and any federal or foreign applications, registrations and renewals
therefor principally used in the Business (collectively, "Copyrights"); all
rights in any and all licensed or proprietary computer software, firmware,
middleware, programs, systems applications, databases and files (in whatever
form or medium), including all material documentation, relating thereto, and all
source and object codes relating thereto principally used in the Business
(collectively, "Computer Software and Files"); all know-how, trade secrets,
confidential information, competitively sensitive and proprietary information
(including but not limited to internal pricing information, supplier
information, telephone and telefax numbers, and e-mail addresses), technical
information, data, process technology, drawings and blue prints principally used
in the Business, other than the Information (as hereinafter defined)
(collectively, "Trade Secrets"); and the right to xxx for past infringement, if
any, in connection with any of the foregoing, including, but not limited to, the
intellectual property disclosed in Schedule 1.01(b) hereto (collectively, the
"Intellectual Property");
(c) all agreements and arrangements permitting any Assignor to use
intellectual property, equipment and computer equipment owned by third parties,
or permitting third party use of intellectual property, equipment or computer
equipment owned by any Assignor, or for the processing, use, licensing, leasing,
storage, or retrieval of software, data and information
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principally used by, and related to, the Business (collectively, "Intellectual
Property, Equipment and Computer Agreements");
(d) any and all accounting business information, management information
and internal reporting data and related books and records (in whatever form or
medium maintained), including but not limited to advertising, marketing and
sales programs, business, marketing and strategic plans, research and
development reports and records, and advertising copy (including radio and
television scripts), creative materials, production agreements, and all other
promotional brochures, flyers, inserts and other materials used principally in
connection with the Business (collectively, the "Marketing Materials");
(e) all computer tapes, discs and other media which are used to store
Intellectual Property (the "Computer Equipment");
(f) all agreements, contracts, instruments and other documents to which
any Assignor is a party that are listed in Schedule 2.07 (the "Assigned
Contracts");
(g) all claims of any Assignor against third parties relating to the
Assets (as hereinafter defined), whether xxxxxx or inchoate, known or unknown or
contingent or non-contingent; and
(h) to the extent transferable, any and all Permits (as hereinafter
defined) used exclusively in connection with the Business;
all as the same shall exist on the Closing Date (items (a) through (h) being,
collectively, the "Assets").
1.02. Excluded Assets. Notwithstanding anything in this Agreement to
the contrary, all assets, properties and rights of the Assignors other than
those set forth in Section 1.01 (including Schedule 1.01), including without
limitation, the following assets, properties and rights of the Assignors (the
"Excluded Assets"), shall be excluded from and shall not constitute part of the
Assets, and Assignee shall have no rights, title or interest in or duties or
obligations of any nature whatsoever with respect thereto by virtue of the
consummation of the transactions contemplated by this Agreement:
(a) all contracts and other agreements to which any Assignor is a
party, other than those described in Section 1.01 above (the "Excluded
Contracts");
(b) all rights of the Assignors in and to the trademarks, service
marks, and any applications, registrations and renewals therefor, and all the
goodwill associated therewith, licensed by any Assignor and (x) which are
subject to the Mutual Confidentiality Agreement ("Mutual Confidentiality
Agreement"), dated March 19, 1993, between CFLP and Market Data Corporation
("MDC") or (y) which are listed (by country and trademark) on Schedule 1.02(b)
hereto (collectively, the "Excluded Marks");
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(c) all rights of the Assignors in, to or under, as applicable, the (x)
MDC Mortgage-Backed Securities Broker System, MDC Odd Lots Broker System, MDC
Options System, MDC OTR Broker System and MDC Buyside Terminal System
(collectively, the "MDC Broker System"), including all documentation relating
thereto and all source and object codes relating thereto and (y) Mutual
Confidentiality Agreement (together, the "Excluded Software");
(d) any and all Confidential Information as defined in the Mutual
Confidentiality Agreement;
(e) all rights of the Assignors in the Internet domain name
"xxxxxx.xxx" and in and to the Internet web site accessed via such domain name,
including, but not limited to, all copyrights in all materials on such site and
the software underlying such site, all trademarks, service marks, trade names
and goodwill associated therewith, all proprietary computer software, programs,
applications, databases, files (in whatever form or medium) and all proprietary
information related thereto, in each case only to the extent that the foregoing
is not otherwise required to be listed in Schedule 2.08(a) hereto;
(f) all rights of the Assignors in, to and under the Data Purchase
Agreement, Data Product Agency and Electronic Trading System Agreement, dated
January 22, 1993, among CFLP, Reuters Limited ("Reuters") and MDC, as amended,
and all other agreements between CFLP, Reuters and/or MDC or related thereto, as
set forth in Schedule 1.02(f) hereto (the "Reuters Agreement");
(g) all rights of the Assignors with respect to the (x) Agreement,
dated February 23, 1990, between Telerate, Inc. ("Telerate") and CFS, as
amended, and (y) Master Optional Services Agreement, dated February 23, 1990,
between Telerate and MDC, as amended, and all other agreements between the
Assignors, Telerate and/or MDC or related thereto, as set forth in Schedule
1.02(g) hereto (the "Telerate Agreement");
(h) all right, title and interest with respect to information relating
to bids, offers or trades or any other information on Financial Products (as
defined in the Joint Services Agreement (as hereinafter defined)) created or
received by Assignors or any of their affiliates in a brokerage capacity,
including, but not limited to, information licensed, sold, transferred or
permitted to be published or displayed by Assignors pursuant to the Reuters
Agreement and the Telerate Agreement (the "Information");
(i) all advertising, marketing and sales programs, advertising copy
(including radio and television scripts), creative materials, production
agreements, broadcasting rights, broadcasting and advertising time, space,
allowances and credits and other promotional brochures, flyers, inserts and
other materials used solely in connection with an Excluded Contract;
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(j) Fraser et. al. U.S. Patent 5,905,974, entitled "Automated Auction
Protocol Processor" (the "Fraser Patent") and all filed patent applications;
(k) any assets, properties, rights and interests relating to the
Excluded Liabilities (as hereinafter defined); and
(l) all rights of the Assignors under this Agreement and the documents
and instruments delivered to the Assignors pursuant to this Agreement.
Each Assignor shall bear and pay all of the costs and expenses of the
assignment of its portion of the Assets, except for sales, transfer or other
similar taxes, which shall be borne and paid by Assignee.
1.03. Assumption of Liabilities. Effective as of the Closing Date,
Assignee will assume and agree to pay, perform and discharge, as and when due,
and indemnify and hold each Assignor harmless from and against, (x) each
liability listed in Schedule 1.03, (y) each obligation of each Assignor to be
performed after the Closing Date with respect to the Assets and the Assigned
Contracts and (z) each other liability of each Assignor thereunder (including
liabilities for any breach of a representation, warranty or covenant, or for any
claims for indemnification contained therein), to the extent and only to the
extent that such liability is due to the actions of Assignee (or any of
Assignee's affiliates, representatives or agents) after the Closing Date
(collectively, the "Assumed Liabilities"). Assignee shall not assume, and shall
not be obligated to pay, perform or discharge, any liability or obligation of
any Assignor other than the Assumed Liabilities (whether or not related to the
Assets or Business) (collectively, the "Excluded Liabilities"), and shall not be
obligated for any other claim, loss or liability relating to any act, omission
or breach by any Assignor with respect to the Business, the Assets or the
Assigned Contracts, or for any claim, loss or liability related to the Excluded
Assets or the Excluded Liabilities, all of which, the Assignors shall remain
obligated to pay, perform and discharge and to indemnify and hold Assignee
harmless against. Without limiting the foregoing, among other things, all
liabilities arising from the matters described in the Prospectus under the
caption "Legal Proceedings" shall be Excluded Liabilities except to the extent
expressly assumed as provided on Schedule 1.03.
1.04. Consideration. In consideration of the Assignment, in addition to
the assumption of the Assumed Liabilities as provided in Section 1.03, Assignee
shall issue to each Assignor the number of Class B Shares set out opposite the
name of such Assignor on Schedule 1.04 hereto, being [_________] Class B Shares
in the aggregate for all of the Assignors.
1.05. The Closing.
(a) Date and Place. The closing of the transactions contemplated hereby
(the "Closing") shall take place at the New York offices of the Assignors, on
the 105th Floor of Xxx Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, on the date
the Assignors so elect, which date shall be no later than the fourth business
day following the date that all of the conditions to
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Closing provided in Articles VI and VII hereof shall have been satisfied, or at
such other time and/or place and/or on such other date as the parties may
mutually agree (the "Closing Date").
(b) Documents to be Delivered by the Assignors. To the extent
applicable, at the Closing, each Assignor shall deliver to Assignee;
(i) a duly executed counterpart to the Joint Services
Agreement (the "Joint Services Agreement") substantially in the form of Exhibit
A hereto;
(ii) a duly executed counterpart of the Administrative
Services Agreement (the "Administrative Services Agreement") substantially in
the form of Exhibit B hereto;
(iii) a duly executed counterpart of the General Assignment,
Assumption and Xxxx of Sale (the "Xxxx of Sale") substantially in the form of
Exhibit C hereto;
(iv) a duly executed counterpart of the Registration Rights
Agreement (the "Registration Rights Agreement") substantially in the form of
Exhibit D hereto;
(v) a duly executed counterpart of the Sublease Agreement
substantially in the form of Exhibit E hereto (the "Sublease Agreement" and,
together with the Joint Services Agreement, the Administrative Services
Agreement, the Xxxx of Sale and the Registration Rights Agreement, the
"Additional Agreements"); and
(vi) such other duly executed documents or instruments to
effect the transfer of the Assets and the other transactions contemplated
hereby, and in such form, as Assignee may reasonably request.
(c) Documents to be Delivered by Assignee. At the Closing, Assignee
shall execute and deliver to the Assignors:
(i) a duly executed counterpart of the Joint Services
Agreement;
(ii) a duly executed counterpart of the Administrative
Services Agreement;
(iii) a duly executed counterpart of the Xxxx of Sale for the
Assets transferred by such Assignor;
(iv) a duly executed counterpart of the Registration Rights
Agreement;
(v) a duly executed counterpart of the Sublease Agreement; and
(vi) such other duly executed documents or instruments to
effect the transfer of the Assets, the assumption of the Assumed Liabilities and
the other transactions contemplated hereby, and in such form, as any Assignor
may reasonably request.
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1.06. Section 351 Transaction. Each party hereto acknowledges and
agrees that the assignment of the Assets is intended to be treated for federal
income tax purposes and relevant state and local tax purposes as an element of a
tax-free transaction described in Section 351 of the Internal Revenue Code. No
party hereto shall take, or cause or permit to be taken, any position that is
inconsistent with such treatment in any tax return or filing or in any tax
proceeding.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE ASSIGNORS
Each Assignor jointly and severally represents and warrants to Assignee
as follows, except as otherwise disclosed in the disclosure schedules to this
Agreement (the "Disclosure Schedules"), which Disclosure Schedules specifically
reference the particular Sections hereof to which they relate:
2.01. Organization and Good Standing. Each Assignor is duly organized,
validly existing and in good standing under the laws of the state of its
organization and is duly qualified to do business and, except as would not
singly or in the aggregate have a Material Adverse Effect, is in good standing
in each jurisdiction in which the ownership, use or leasing of its assets or the
conduct or nature of its business makes such qualification necessary. "Material
Adverse Effect" means any event, change, changes, effect or effects that
individually or in the aggregate are materially adverse to (x) the ownership,
use, operation or value of the Assets, (y) the condition (financial or other) or
results of operations of, or prospects for, the Business or (z) the ability to
consummate the transactions contemplated by this Agreement, the Joint Services
Agreement or the Administrative Services Agreement.
2.02. Authority. Each Assignor has the requisite corporate power and
authority to execute and deliver this Agreement and the Additional Agreements to
which it is a party, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery by each Assignor of this Agreement and the Additional Agreements to
which it is a party and the consummation by each Assignor of the transactions
contemplated hereby and thereby have been duly authorized by all necessary
corporate, stockholder, member or partner action, and no other corporate,
partner or member proceedings on the part of any Assignor or any affiliate of
any Assignor, respectively, are necessary to authorize the execution and
delivery by an Assignor of this Agreement or the Additional Agreements to which
that Assignor is a party or to consummate the transactions contemplated hereby
and thereby. This Agreement has been, and at the Closing the Additional
Agreements to which each Assignor is a party will be, duly executed and
delivered by each Assignor that is a party thereto and constitutes or will
constitute, as applicable, legal, valid and binding obligations of each Assignor
enforceable against such Assignor in accordance with their respective terms.
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2.03. No Conflict; Required Filings and Consents.
(a) The execution, delivery and performance by each Assignor of this
Agreement and the Additional Agreements to which it is a party do not, and the
consummation of the transactions contemplated hereby and thereby will not, (i)
conflict with or violate the partnership agreement, Certificate of Limited
Liability Company, limited liability company operating agreement, By-Laws or
similar organizational or governing document of any Assignor or any affiliate
thereof, as the case may be; (ii) conflict with or violate any federal, state,
local or foreign laws, rules, statutes, ordinances, regulations, judgments,
settlement agreements, orders or decrees or arbitration proceedings or
pronouncements (collectively "Laws") applicable to any Assignor or any affiliate
thereof, the Business or the Assets or by which any Assignor or any affiliate
thereof, the Business or the Assets are bound or affected; or (iii) result in
any material breach of or constitute a material default (or an event that with
notice or lapse of time or both would become a material default) under, or give
to any other person any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a Lien on any of the Assets
pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which any
Assignor or any affiliate thereof is a party or by which any Assignor or any
affiliate thereof, the Business or the Assets are bound or affected.
(b) The execution, delivery and performance by each Assignor of this
Agreement and the Additional Agreements to which it is a party do not and the
consummation of the transactions contemplated hereby and thereby do not require
any Assignors or any of its affiliates to seek, obtain or receive any consent,
approval, authorization or permit from, or make any filing with or notification
to, any governmental agency, authority or court or any other person, body or
committee, except for any consents, approvals, any authorizations or permits as
have been obtained or filings or notifications as has been made or as would not
singly or in the aggregate, if not obtained or made, have a Material Adverse
Effect.
2.04. Permits; Compliance with the Law. Each Assignor is in possession
of all franchises, grants, authorizations, licenses, permits, easements,
variances, exemptions, consents, certificates, approvals and orders necessary
for it to own and use the Assets as presently owned and used and to carry on the
Business as it is now being conducted (the "Permits"), except for those Permits
the failure of which to obtain or maintain would not result in a Material
Adverse Effect, and no suspension, revocation, cancellation or refusal to review
any of the Permits has occurred, or to the knowledge of any Assignor, is
threatened or anticipated. Each of the Permits is listed on Schedule 2.04. Each
Assignor has conducted and is conducting the Business, and has owned, used and
operated and owns, uses and operates the Assets in compliance with, and not in
violation of, (i) any Law applicable to it or by which it, the Business or the
Assets is bound or affected or (ii) any of the Permits (except in either case
for any such violations as, singly or in the aggregate, would not have a
Material Adverse Effect).
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2.05. Title to Assets. Each Assignor owns, free and clear of any Liens,
and has the full right to sell, assign and convey, all of the Assets, and at the
Closing will convey the Assets to Assignee, free and clear of any Liens.
2.06. Absence of Litigation. Except as would not singly or in the
aggregate have a Material Adverse Effect or is disclosed in the Prospectus,
there is no pending or threatened, nor has there been at any time during the
twelve months preceding the date hereof any, claim, complaint, action, suit,
litigation, proceeding or arbitration or, to each Assignor's knowledge, any
inquiry or investigation of any kind by any state attorney general, consumer
protection agency or other governmental or self-regulatory agency, or any other
person or entity which seeks to enjoin, delay or restrict any of the
transactions contemplated by this Agreement, the Additional Agreements or which
involves the Business or any of the Assets. Except as would not singly or in the
aggregate have a Material Adverse Effect, none of the Assignors nor any
affiliate of the Assignors are subject to any judgment, order, writ, injunction,
decree or award which relates to any of the Assets or to the Business.
2.07. Contracts; No Default; Etc. Schedule 2.07 of the Disclosure
Schedule lists each Assigned Contract. Correct and complete copies of each
Assigned Contract, together with all amendments, supplements and other
instruments (including side letters) thereto effecting a modification or waiver
of the terms thereof, have been delivered to Assignee. Each Assigned Contract is
valid, subsisting and, to each Assignor's knowledge, enforceable in accordance
with its terms, save only that such enforceability may be affected by
bankruptcy, insolvency, fraudulent conveyance, moratorium and similar laws
affecting the rights of creditors generally and by general principles of equity
(whether considered in a proceeding at law or in equity). Each such Assigned
Contract is in full force and effect, no written notice of termination or
non-renewal of any Assigned Contract has been given to any Assignor or, to the
knowledge of any Assignor, is anticipated, and there is no material default (or
any event known to any Assignor which, with the giving of notice or lapse of
time or both, would constitute a material default) by any Assignor or, to the
knowledge of any Assignor, by any other party to any such Assigned Contract, in
the due timely payment or performance of any obligation to be performed or paid
under any Assigned Contract.
2.08. Intellectual Property and Computer Assets.
(a) Except as would not singly or in the aggregate have a Material
Adverse Effect, each Assignor owns all right, title and interest in, or has
valid and subsisting license rights sufficient to use and to continue to use,
all Intellectual Property principally used in the conduct of the Business as
currently conducted by each Assignor. All Intellectual Property necessary for
the conduct of the Business as described in the Prospectus (other than the
intellectual property included in the Excluded Assets) is being transferred or
licensed to Assignee hereunder. Except as would not singly or in the aggregate
have a Material Adverse Effect, all Intellectual Property is free and clear of
any and all Liens.
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(b) Schedule 2.08(b) lists all of each Assignor's United States and
foreign registrations and applications issued by, filed with or recorded by any
governmental regulatory authority with respect to the Intellectual Property.
Except as singly or in the aggregate would not have a Material Adverse Effect,
all of such registrations and applications are valid and in full force and
effect and all necessary actions to maintain the registrations or applications
for registration of such Intellectual Property have been taken or instructions
have been given that such actions be taken, and such actions will be taken as of
the date of this Agreement.
(c) Except as singly or in the aggregate would not have a Material
Adverse Effect, all Computer Software and Files and Computer Equipment, to each
Assignor's knowledge, are "Year 2000 Compliant." For purposes of this Agreement,
"Year 2000 Compliant" means that the Computer Software and Files and Computer
Equipment will (A) consistently and accurately process date and time information
and data with values before, during and after January 1, 2000, including but not
limited to, accepting date input, providing date output, and performing
calculations on dates; and (B) function accurately and in accordance with its
specifications without an adverse change in performance resulting from
processing time data with values before, during and after January 1, 2000.
2.09. Taxes. Each Assignor has duly and timely filed all returns,
reports or statements (including information statements) ("Tax Returns")
required to have been filed with respect to all federal, state, local or foreign
net or gross income, gross receipts, net proceeds, sales, use, ad valorem,
transfer, value added, franchise, bank shares, withholding, payroll, employment,
disability, excise, property, alternative or add-on minimum, environmental or
other taxes, assessments, duties, fees, levies or other governmental charges of
any nature whatsoever, together with any interest, penalties, additions to tax
or additional amounts with respect thereto ("Taxes"); each such Tax Return
correctly and completely reflects the income, franchise or other Tax liability
and all other information required to be reported thereon; and all Taxes due and
payable by each Assignor, whether or not shown on any Tax Return, have been
paid, other than those that are the subject of a bona fide dispute and are being
contested by an Assignor in appropriate proceedings. Notwithstanding anything to
the contrary herein, the representations and warranties in this Section 2.09 are
limited to matters that (i) include, relate to or otherwise affect the Business
or the Assets, (ii) could result in the imposition of a Lien on, or the
assertion of a claim against, the Assignee, the Business or the Assets or (iii)
could affect the tax position of Assignee with respect to the Business or the
Assets after the Closing Date.
2.10. Undisclosed Liabilities. Except as singly or in the aggregate
would not have a Material Adverse Effect, there are no claims, losses,
obligations or liabilities of, relating to or affecting the Assignors or any of
the Assets.
2.11. Investment Representation. Each Assignor represents, warrants and
agrees that it is acquiring the Class B Shares for its own account and not with
a view to the resale or distribution thereof or any interest therein, except in
compliance with the registration requirements of applicable securities laws or
pursuant to an exemption therefrom. Any
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certificates evidencing the Class B Shares may contain a legend, in customary
form, to such effect.
2.12. Entire Business. The Assets, together with the services to be
provided by one or more of the Assignors pursuant to the (i) Administrative
Services Agreement and (ii) Joint Services Agreement, constitute all the assets,
properties and rights necessary for Assignee to conduct the Business in all
material respects as described in the Prospectus.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ASSIGNEE
Assignee hereby represents and warrants to the Assignors as follows:
3.01. Organization and Good Standing. Assignee is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Assignee has the requisite power and authority to execute, deliver and
perform this Agreement and to consummate the transactions contemplated hereby.
3.02. Authority; Binding Effect. Assignee has taken all necessary
corporate actions to authorize, execute and deliver this Agreement and to
perform all of its obligations under, and to consummate the transactions
contemplated by, this Agreement. This Agreement has been duly and validly
executed by Assignee. This Agreement constitutes the valid and binding
obligation of Assignee, enforceable against Assignee in accordance with its
terms, subject to the effect of reorganization, bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance and other similar laws
relating to or affecting creditors' rights generally and court decisions with
respect thereto, and subject to the application of equitable principles and the
discretion of the court (regardless of whether the enforceability is considered
in a proceeding in equity or at law).
ARTICLE IV
COVENANTS
4.01. Assignment of Contracts. Each Assignor will give any notices to
third parties, and will use its reasonable best efforts to obtain any third
party consents, that Assignee may request in connection with the transaction
contemplated by this Agreement, including, but not limited to, those consents
listed on Schedule 4.01. Each party to this Agreement will give notices to, make
any filings with, and use its reasonable best efforts to obtain any
authorizations, consents, and approvals of governments and governmental agencies
in connection with, the transactions contemplated by this Agreement.
4.02. Further Assurances. Each party hereto shall execute, deliver,
file and record, or cause to be executed, delivered, filed and recorded, such
further agreements, instruments and
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other documents and take, or cause to be taken, such further actions, as the
other party may reasonably request as being necessary or advisable to effect or
evidence the transactions contemplated by this Agreement.
4.03. Termination of Non-Exclusive Patent License. CFLP and CFPH,
L.L.C., a Delaware limited liability company ("CFPH"), shall terminate and cause
its affiliates to terminate before the Closing Date Section 4 of a certain
Assignment and License of Patent Rights, effective as of June 16, 1999, among
CFLP, CFS and CFPH, whereby CFLP and CFPH granted a non-exclusive, worldwide,
non-transferable license to CFS for "CFS Patents" as that term is defined
therein.
4.04. Compliance with Laws. Each party hereto agrees to comply with all
applicable Laws relating to the conduct of its business(es).
ARTICLE V
INDEMNIFICATION
5.01. Assignors' Indemnification Obligations. Subject to the terms and
conditions of this Article V, each Assignor agrees, jointly and severally, to
defend, indemnify and hold Assignee, its affiliates and assigns, and its
respective officers, directors, agents, attorneys, employees and representatives
harmless from and against any and all liabilities, losses, costs, damages,
expenses, penalties, deficiencies, fines and Taxes, including, without
limitation, reasonable legal and other expenses (collectively, "Damages"),
directly or indirectly arising out of, resulting from or relating to:
(a) any breach of any representation, warranty, covenant, agreement or
obligation of any Assignor contained in this Agreement;
(b) any Excluded Liability;
(c) the conduct of the Business, and the ownership, use and operation
of the Assets, on or prior to the Closing Date;
(d) the use, operation or ownership of the Excluded Assets prior to or
after the Closing including, without limitation, the Excluded Software; and
(e) (i) any claim by any employee of any Assignor not hired by Assignee
with respect to his or her employment by any Assignor before or after the
Closing, including any group insurance claims, workers' compensation claims or
liabilities arising out of any accident, illness or other event occurring before
or after the Closing and other claims with respect to pension, retirement and/or
welfare benefits as they relate to such employee's services for any Assignor,
and (ii) any contractual claims by any person who was an employee of any
Assignor prior to the
12
Closing and arising out of the consummation of the transactions contemplated by
this Agreement.
(f) any claim for any breach by any Assignor of any covenant or
obligation contained in the Agreement of Limited Partnership of Cantor
Xxxxxxxxxx, X.X., as amended;
(g) any claim for any breach by any Assignor of any covenant or
obligation contained in the (i) Cantor Xxxxxxxxxx Securities General Partnership
Agreement, entered into September 25, 1992, by and between CFLP and Cantor
Xxxxxxxxxx Incorporated, and (ii) Agreement to Admit CF Group Management, Inc.
as a New Partner of Cantor Xxxxxxxxxx Securities, entered into as of July 2,
1996, by and between CFLP and CF Group Management, Inc.
5.02. Assignee's Indemnification Obligations. Subject to the terms and
conditions of this Article V, Assignee agrees to defend, indemnify and hold each
Assignor, its affiliates and their respective officers, directors, agents,
attorneys, employees and representatives harmless from and against any and all
Damages directly or indirectly arising out of, resulting from or relating to:
(a) any breach of any representation, warranty, covenant, agreement or
obligation of Assignee contained in this Agreement;
(b) any Assumed Liability (including, without limitation, any failure
by Assignee to perform pursuant hereto the obligations to be performed by it
after the Closing under any Assigned Contracts or the use, operation or
ownership of the Assets or operation of the Business after the Closing); and
(c) any claim by any employee of Assignor hired by Assignee with
respect to his or her employment by Assignee or termination of such employment
after the Closing (except to the extent covered by Section 5.01 (e)(ii)),
including any group insurance claims, workers' compensation claims or
liabilities arising out of any accident, illness or other event occurring after
the Closing and other claims with respect to pension, retirement and/or welfare
benefits as they relate to such employee's services for Assignee after the
Closing.
5.03. Claims for Indemnification; Defense of Indemnified Claims. For
purposes of this Section, the party entitled to indemnification shall be
referred to as the Indemnified Party and the party required to indemnify shall
be referred to as the Indemnifying Party. In the event that the Indemnifying
Party shall be obligated to the Indemnified Party pursuant to this Article V or
in the event that a suit, action, investigation, claim or proceeding is begun,
made or instituted as a result of which the Indemnifying Party may become
obligated to the Indemnified Party hereunder, the Indemnified Party shall give
prompt written notice to the Indemnifying Party of the occurrence of such event,
specifying the basis for such claim or demand, and the amount or estimated
amount thereof to the extent then determinable (which estimate shall not be
conclusive of the final amount of such claim or demand); provided, however, that
the failure to give such notice shall
13
not constitute a waiver of the right to indemnification hereunder, except to the
extent that the Indemnifying Party is actually prejudiced in a material respect
thereby. The Indemnifying Party agrees to defend, contest or otherwise protect
against any such suit, action, investigation, claim or proceeding at the
Indemnifying Party's own cost and expense with counsel of its own choice, who
shall be, however, reasonably acceptable to the Indemnified Party. The
Indemnifying Party may not make any compromise or settlement without the prior
written consent of the Indemnified Party (which will not be unreasonably
withheld or delayed) and the Indemnified Party shall receive a full and
unconditional release reasonably satisfactory to it pursuant to such compromise
or settlement. The Indemnified Party shall have the right but not the obligation
to participate at its own expense in the defense thereof by counsel of its own
choice. If requested by the Indemnifying Party, the Indemnified Party shall (at
the Indemnifying Party's expense) (i) cooperate with the Indemnifying Party and
its counsel in contesting any claim or demand which the Indemnifying Party
defends, (ii) provide the Indemnifying Party with reasonable access during
normal business hours to its books and records to the extent that such books and
records relate to the condition or operation of the Business and are requested
by the Indemnifying Party to perform its indemnification obligations hereunder,
and to make copies of such books and records, and (iii) make personnel available
to assist in locating any books and records relating to the Business or whose
assistance, participation or testimony is reasonably required in anticipation
of, preparation for, or the prosecution and defense of, any claim subject to
this Article V. In the event that the Indemnifying Party fails timely to defend,
contest or otherwise protect the Indemnified Party against any such suit,
action, investigation, claim or proceeding, the Indemnified Party shall have the
right to defend, contest or otherwise protect the Indemnified Party against the
same and may make any compromise or settlement thereof and recover the entire
cost thereof from the Indemnifying Party, including, without limitation,
reasonable attorneys' fees, disbursements and all amounts paid as a result of
such suit, action, investigation, claim or proceeding or compromise or
settlement thereof.
5.04. Payments; Non-Exclusivity. Any amounts due an Indemnified Party
under this Article V shall be due and payable by the Indemnifying Party within
fifteen (15) business days after (x) in the case of a claim which does not
involve any third party, receipt of written demand therefor and (y) in the case
of a claim which involves a third party, the final disposition of such claim or
demand, provided legal and other out-of-pocket costs and expenses are reimbursed
currently within fifteen (15) business days after demand therefor. The remedies
conferred in this Article V are intended to be without prejudice to any other
rights or remedies available at law or equity to the Indemnified Parties, now or
hereafter.
ARTICLE VI
CONDITIONS TO ASSIGNEE'S OBLIGATIONS
The obligation of Assignee to consummate the transactions contemplated
hereby is subject to the fulfillment at or prior to the Closing of the following
conditions, any or all of which may be waived in whole or in part by Assignee to
the extent permitted by applicable law:
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6.01. Representations, Warranties and Covenants of the Assignors. The
Assignors shall have complied in all material respects with all of their
agreements and covenants contained herein (including the obligations of the
Assignors to deliver the documents specified in Section 1.05) to be performed at
or prior to the Closing Date, and all of the representations and warranties of
the Assignors contained herein shall be true in all material respects on and as
of the Closing Date with the same effect as though made on and as of the Closing
Date, except to the extent that such representations and warranties were made as
of a specified date and, as to such representations and warranties, the same
shall continue on the Closing Date to have been true in all material respects as
of the specified date.
6.02. Other Consents and Filings. All material approvals and consents
of or filings with governmental or regulatory authorities, and all material
approvals and consents of any other persons (including, without limitation, all
third party consents under each of the Assigned Contracts), required to permit
the consummation of all of the transactions contemplated hereby shall have been
obtained or made, as the case may be, to the reasonable satisfaction of
Assignee; provided, however, that it shall not be a condition to Assignee's
obligation to close the transactions contemplated hereby if the failure to
obtain any such approvals, consents or filings would not be material to the
Business or the Assets. For purposes of this Section 6.02, it is understood and
agreed that the failure to obtain any of the approvals, consents and filings
listed on Schedule 6.02 shall be deemed to be material to the Business or the
Assets.
6.03. Absence of Litigation. No proceeding, action, suit,
investigation, litigation or claim challenging the legality of, or seeking to
restrain, prohibit or modify the transactions contemplated by this Agreement or
the Additional Agreements shall have been instituted and not settled or
otherwise terminated.
6.04. Initial Public Offering of Assignee's Class A Common Stock. The
Registration Statement on Form S-1 registering shares of Assignee's Class A
Common Stock, par value $.01 per share (the "Class A Common Stock"), shall have
been declared effective by the Securities and Exchange Commission and Assignee
shall have completed its initial public offering of its Class A Common Stock
concurrently with the Closing of the transactions contemplated hereby.
6.05. No Prohibition. No law, statute, rule or regulation or
injunction, order, judgment, ruling, decree or settlement of any court or
administrative agency shall be in effect which prohibits Assignee from
consummating the transactions contemplated hereby or operating any Asset after
the Closing Date.
ARTICLE VII
CONDITIONS TO THE ASSIGNORS' OBLIGATIONS
15
The obligations of the Assignors to consummate the transactions
contemplated hereby shall be subject to the satisfaction (or waiver by the
Assignors) on or prior to the Closing Date of all of the following conditions:
7.01. Representations, Warranties and Covenants of Assignee. Assignee
shall have complied in all material respects with all of its agreements and
covenants contained herein (including the obligation of Assignee to deliver the
documents specified in Section 1.05) to be performed at or prior to the Closing
Date, and all of the representations and warranties of Assignee contained herein
shall be true in all material respects on and as of the Closing Date with the
same effect as though made on and as of the Closing Date, except to the extent
that such representations and warranties were made as of a specified date and,
as to such representations and warranties, the same shall continue on the
Closing Date to have been true in all material respects as of the specified
date.
7.02. Initial Public Offering of Assignee's Class A Common Stock. The
Registration Statement on Form S-1 registering shares of Assignee's Class A
Common Stock shall have been declared effective by the Securities and Exchange
Commission and Assignee shall have completed its initial public offering of its
Class A Common Stock concurrently with the Closing of the transactions
contemplated hereby.
7.03. No Prohibition. No law, statute, rule or regulation or
injunction, order, judgment, ruling, decree or settlement of any court or
administrative agency shall be in effect which prohibits any Assignor from
consummating the transactions contemplated hereby.
ARTICLE VIII
TERMINATION PRIOR TO CLOSING
8.01. Termination. This Agreement may be terminated at any time prior
to the Closing:
(a) By the mutual written consent of Assignee and the Assignors; or
(b) By either the Assignors or Assignee in writing, without liability
to the terminating party on account of such termination (provided that the
terminating party is not otherwise in breach of this Agreement), if there shall
have been a material breach by the other party of its representations,
warranties, covenants or agreements contained herein, the non-breaching party
has notified the breaching party of the breach, and the breach has continued
without cure for a period of 30 days after such notice of breach.
8.02. Effect on Obligations. Termination of this Agreement pursuant to
this Article shall terminate all obligations of the parties hereunder; provided,
however, that termination pursuant to paragraph (b) of Section 8.01 shall not
relieve any party that breached its covenants
16
or agreements contained herein or in any related agreement from any liability to
the other party hereto by reason of such breach.
ARTICLE IX
MISCELLANEOUS
9.01. Joint and Several Liability. All obligations, covenants,
agreements, promises and liabilities of the Assignors hereunder shall be joint
and several obligations of all Assignors in all respects.
9.02. Successors and Assigns. This Agreement shall not be assignable by
Assignee without the prior written consent of the Assignors. The terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective successors and permitted assigns of the parties hereto.
9.03. Headings. The headings of the Articles, Sections and paragraphs
of this Agreement are inserted for convenience only and shall not be deemed to
constitute part of this Agreement or to affect the construction hereof.
9.04. Modification and Waiver. No amendment, modification, alteration
or waiver of the terms or provisions of this Agreement shall be binding unless
the same shall be in writing and duly executed by the parties hereto; provided,
however, that each amendment, modification, alteration or waiver hereof or
hereunder must be approved by a majority of the outside directors of Assignee.
For purposes of this Agreement, an outside director shall mean a director who is
not an employee, partner or affiliate (other than solely by reason of being an
eSpeed director) of Assignee, CFLP or any of their respective affiliates. No
waiver of any of the provisions of this Agreement shall be deemed to or shall
constitute a waiver of any other provision hereof (whether or not similar). No
delay on the part of any party in exercising any right, power of privilege
hereunder shall operate as a waiver thereof.
9.05. Broker's Fees. Each party represents and warrants that no broker,
finder or investment banker is entitled to any brokerage, finder's or other fee
or commission in connection with the transactions contemplated hereby.
9.06. Expenses. Each Assignor and Assignee shall pay its own costs and
expenses incurred in connection with the preparation and execution and delivery
of this Agreement, including, without limiting the generality of the foregoing,
fees and expenses of financial consultants, accountants and counsel provided
that Assignee shall bear the cost of any sales, transfer and similar taxes in
connection with any transfer of assets pursuant to this Agreement. The
obligation to pay expenses pursuant to this Section 9.06 shall not in any way
limit or expand any obligation of any Assignor or Assignee to bear and pay costs
and expenses relating to the actual assignment of Assets pursuant to Section
1.01.
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9.07. Notices. Any notice, request, instruction or other document to be
given hereunder by either party hereto to the other party shall be in writing
and delivered personally or sent by electronic facsimile transmission, cable,
telegram, telex or other standard forms of written telecommunications, by
overnight courier or by registered or certified mail, postage prepaid,
If to the Assignors to:
Cantor Xxxxxxxxxx, X.X.
Xxx Xxxxx Xxxxx Xxxxxx, 000xx Xxxxx
Xxx Xxxx, XX 00000
Attention: President
Telecopier Number: 000-000-0000
With copies to:
Cantor Xxxxxxxxxx, X.X.
Xxx Xxxxx Xxxxx Xxxxxx, 000xx Xxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Telecopier Number: 000-000-0000
If to Assignee to:
eSpeed, Inc.
Xxx Xxxxx Xxxxx Xxxxxx, 000xx Xxxxx
Xxx Xxxx, XX 00000
Attention: President
Telecopier Number: 000-000-0000
or at such other address for a party as shall be specified by like notice. Any
notice which is delivered personally or by a form of written telecommunications
in the manner provided herein shall be deemed to have been duly given to the
party to whom it is directed upon the actual receipt by such party. Any notice
which is addressed and sent in the manner herein provided shall be conclusively
presumed to have been duly given to the party to which it is addressed at the
close of business, local time of the recipient, on the first day, if mailed by
overnight courier, and otherwise on the third day, after the day it is so sent.
9.08. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York applicable to agreements
made and to be performed wholly within such jurisdiction. EACH OF THE PARTIES
HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY CONSENTS TO SUBMIT TO THE
EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED
STATES OF AMERICA IN EACH CASE LOCATED IN THE
18
COUNTY OF NEW YORK FOR ANY LITIGATION ARISING OUT OF OR RELATING TO THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY (AND AGREES NOT TO COMMENCE
ANY LITIGATION RELATING THERETO EXCEPT IN SUCH COURTS), AND FURTHER AGREES THAT
SERVICE OF ANY PROCESS, SUMMONS, NOTICE OR DOCUMENT BY U.S. REGISTERED MAIL TO
ITS RESPECTIVE ADDRESS SET FORTH IN SECTION 9.07 SHALL BE EFFECTIVE SERVICE OF
PROCESS FOR ANY LITIGATION BROUGHT AGAINST IT IN ANY SUCH COURT. EACH OF THE
PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY OBJECTION TO
THE LAYING OF VENUE OF ANY LITIGATION ARISING OUT OF THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY IN THE COURTS OF THE STATE OF NEW YORK OR THE
UNITED STATES OF AMERICA LOCATED IN THE COUNTY OF NEW YORK, AND HEREBY FURTHER
IRREVOCABLY AND UNCONDITIONALLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.
9.09. Other Covenants. Subject to Section 6.02, the extent that any
consents needed to assign to Assignee any of the Assets have not been obtained
on or prior to the Closing Date, this Agreement shall not constitute an
assignment or attempted assignment thereof if such assignment or attempted
assignment would constitute a breach thereof. If any such consent shall not be
obtained on or prior to the Closing Date, then (i) each of Assignee and the
applicable Assignor, if required under applicable law, shall use its reasonable
best efforts in good faith to obtain such consent as promptly as practicable
thereafter (provided that reasonable best efforts shall not include the payment
of monies to any third party) and (ii) until such consent is obtained, the
parties shall use reasonable efforts in good faith to cooperate and to cause
each of their respective affiliates to cooperate, in any lawful arrangement
(including licensing, subleasing or subcontracting if permitted) designed to
provide to Assignee the operational and economic benefits under any such Assets.
9.10. Disclosure Schedules and Exhibits; Entire Agreement. The
Disclosure Schedules, and all exhibits and attachments to the Disclosure
Schedules, an all exhibits to, and documents expressly incorporated into this
Agreement, and any other attachments to this Agreement are hereby incorporated
into this Agreement and are made a part hereof as if set out in full in this
Agreement. This Agreement (and the agreements, certificates and other documents
delivered hereunder), unless otherwise provided herein, supersedes all other
prior agreements and understandings, both written and oral, among the parties
with respect to the subject matter hereof and constitutes the entire agreement
among the parties hereto with respect to the subject matter hereof.
9.11. Survival of Representations and Warranties. All of the
representations and warranties of the Assignors and Assignee contained in this
Agreement shall survive the Closing (even if the damaged party knew or had
reason to know of any misrepresentation or breach of
19
warranty at the time of Closing) and continue in full force and effect for ten
(10) years thereafter (subject to any applicable statutes of limitations).
9.12. Invalid Provisions. If any provision of this Agreement is held to
be illegal, invalid or unenforceable, and if the rights or obligations of any
party hereto under this Agreement will not be materially and adversely affected
thereby, (a) such provision will be fully severable, (b) this Agreement will be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part hereof, (c) 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 (d)
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.
9.13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall for all purposes be deemed to be an original,
and all of which shall constitute the same instrument.
[Signature Pages Follow]
20
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf as of the date first above written.
ASSIGNORS:
CANTOR XXXXXXXXXX, X.X.
By:
---------------------------------------------
Name:
Title:
CANTOR XXXXXXXXXX SECURITIES
By:
---------------------------------------------
Name:
Title: General Partner
CANTOR XXXXXXXXXX & CO.
By:
---------------------------------------------
Name:
Title: General Partner
CFFE, LLC
By:
---------------------------------------------
Name:
Title:
CANTOR XXXXXXXXXX L.L.C.
By:
---------------------------------------------
Name:
Title:
[Signature Page to Assignment and Assumption Agreement]
CANTOR XXXXXXXXXX SKOKEN
KAISHA LIMITED
By:
---------------------------------------------
Name:
Title:
CFPH, LLC
By:
---------------------------------------------
Name:
Title:
ASSIGNEE:
eSPEED, INC.
By:
---------------------------------------------
Name:
Title:
[Signature Page to Assignment and Assumption Agreement]
EXHIBIT A
---------
Form of Joint Services
----------------------
Agreement
---------
A-1
EXHIBIT B
---------
Form of Administrative
----------------------
Services Agreement
------------------
B-1
EXHIBIT C
---------
Form of General
---------------
Assignment,
-----------
Assumption
----------
and Xxxx of Sale
----------------
C-1
EXHIBIT D
---------
Form of Registration Rights
---------------------------
Agreement
---------
D-1
EXHIBIT E
---------
Form of Sublease
----------------
Agreement
---------
E-1
