WARRANT AGREEMENT
THIS WARRANT AGREEMENT, dated as of December 9, 1999 by and between
eSpeed, Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇ ▇. Wygod (the
"Grantee").
In accordance with the letter agreement dated as of November 1, 1999 by and
between the Company and the Grantee, and in consideration for the services
rendered pursuant thereto, the Company hereby grants to the Grantee a warrant
(the "Warrant") to purchase shares of the Company's Class A Common Stock (the
"Shares") on the following terms and conditions:
1. Number of Shares. The number of Shares subject to the Warrant shall equal
110,000.
2. Exercise Price. The exercise price per Share subject to the Warrant shall
equal $22.00.
3. Exercisability/Termination. The Warrant shall be fully exercisable only
during the four year period commencing on the first anniversary hereof and
ending on the fifth anniversary hereof, at which time any unexercised
portion of the Warrant shall terminate. Notwithstanding the foregoing, the
Warrant shall terminate upon the consummation of any transaction whereby
the Company (or any successor to the Company or substantially all of its
business) becomes a wholly-owned subsidiary of any corporation or other
entity, unless such other corporation or entity shall continue or assume
the Warrant (in which case such other corporation or entity shall be
treated as the Company for all purposes hereunder, and shall make
appropriate adjustment pursuant to paragraph 5 below in the number and
kind of shares of stock subject thereto and the exercise price per share
thereof to reflect consummation of such transaction). If the Warrant is
not to be so assumed, the Company shall notify the Grantee of consummation
of such transaction at least ten days in advance thereof.
4. Exercise Procedures. The Grantee shall exercise the Warrant by delivery of
written notice to the Company setting forth the number of Shares with
respect to which the Warrant is to be exercised, together with a certified
check or bank draft payable to the order of the Company for an amount
equal to the sum of the exercise price for such Shares.
5. Adjustment Upon Changes in Capitalization. In the event any
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or exchange of Shares or
other securities, any special and nonrecurring dividend or distribution
(whether in the form of cash, securities or other property), liquidation,
dissolution, or other similar transactions or events, affects the Shares
such that an adjustment is, in the sole discretion of the Company,
appropriate in order to prevent dilution or enlargement of the rights of
the Grantee, then the Company shall equitably adjust (i) the number and
kind of Shares that may be delivered or deliverable in respect of the
Warrant, and/or (ii) the exercise
price. In addition, the Company is authorized to make adjustments in the
terms and conditions of, and the criteria included in, the Warrant
(including, without limitation, cancellation of the Warrant in exchange
for its in-the-money value, if any, or substitution of the Warrant using
stock of a successor or other entity) in recognition of unusual or
nonrecurring events (including, without limitation, an event described in
the preceding sentence) affecting the Company or any subsidiary of the
Company or the financial statements of the Company or any subsidiary of
the Company, or in response to changes in applicable laws, regulations, or
accounting principles.
6. Restrictions on Issuing Stock. The Company shall not be obligated to issue
or deliver Shares upon exercise of the Warrant or take any other action in
a transaction subject to the requirements of any applicable securities
law, any requirement under any listing agreement between the Company and
any national securities exchange or automated quotation system or any
other law, regulation or contractual obligation of the Company until the
Company is satisfied that such laws, regulations, and other obligations of
the Company have been complied with in full. Certificates representing
Shares issued pursuant to exercise of the Warrant will be subject to such
stop-transfer orders and other restrictions as may be applicable under
such laws, regulations and other obligations of the Company, including any
requirement that a legend or legends be placed thereon.
7. Limitations on Transferability. The Warrant will not be transferable by
the Grantee except by will or the laws of descent and distribution or to a
beneficiary in the event of the Grantee's death, shall not be pledged,
mortgaged, hypothecated or otherwise encumbered, or otherwise subject to
the claims of creditors; provided, however, that the Warrant or any
portion thereof may be transferred by the Grantee to (a) trusts
established for the benefit of his children, stepchildren and
grandchildren or (b) charities. Any such transferee shall be bound by the
terms of this Agreement.
8. Taxes. The Grantee shall be responsible for the payment of all income,
social security taxes and Medicare taxes related to the exercise of the
Warrant, and shall indemnify the Company against any liability it may
incur with respect to such taxes, including by reason of the Company not
withholding any such taxes on behalf of the Grantee.
9. No Stockholder Rights. The Warrant shall not confer on the Grantee any of
the rights of a stockholder of the Company unless and until Shares are
duly issued or transferred and delivered to the Grantee upon exercise of
the Warrant.
10. Piggyback Registration Rights. If the Company intends to register
securities of any of its shareholders for an offering to the public while
the Warrant is exercisable, the Company shall notify the Grantee of its
intention to do so and, subject to such limitations as shall affect all
selling shareholders equally and as may be imposed by any underwriter of
such offering or by law, the Grantee may irrevocably elect to participate
in such offering on a pari passu basis
2
with any other selling shareholders (other than the Investors (as defined
in the Registration Rights Agreement dated as of date of the closing of
the Company's initial public offering, between the Company and the
Investors) who shall have priority over the Grantee on any cutback) based
on the relative number of shares owned and options or warrants vested of
each of such other selling shareholders (and its affiliates and permitted
assigns) and the Grantee (the "Pari Passu Percentage"). Such participation
shall be under the same terms and conditions as may apply to such other
shareholders, provided that the Grantee shall not have any rights to
select the underwriter or similar matters given to the other shareholders.
The Grantee shall make any election within 30 days of receipt of such
notice of intent to register by a writing given to the Secretary of the
Company, which writing shall indicate his irrevocable election to sell in
the intended offering, the number of Shares he wishes to sell and the
portion thereof to be included by him. The Grantee's notice may not be for
less than 50% of the number of Shares of the Grantee. The Grantee shall be
responsible for delivery of the Shares covered by the notice on a timely
basis. The Company shall only have to give notice of intent to register
under this paragraph to the Grantee and any notice of intent to
participate shall only be valid if received from the Grantee (or in the
event of his death, his executor). The Company may at any time abandon any
offering. The Company or the underwriter may at any time cutback
(including, without limitation, limiting the amount to the extent a prior
amount had not been specified) on the number of shares in any offering in
which the Company is offering shares and the underwriter may at any time
cutback (including, without limitation, limiting the amount to the extent
a prior amount had not been specified) on the number of shares to be
offered by shareholders in any offering in which the Company is not also
offering shares. In either such case the Grantee's Shares to be offered
shall be proportionately reduced so that the amounts offered by the
Grantee and by other shareholders (and their affiliates and permitted
assigns) satisfy the Pari Passu Percentage. The Grantee shall have no
right to participate in any offering by the Company that does not include
any shares owned by other shareholders and the provision of this paragraph
shall not apply to any registration on Form S-8, or otherwise with regard
to securities of compensatory plans of the Company, or any registration
relating to business acquisitions on Form S-1 or Form S-4. The Grantee
shall sign such underwriting and other agreements in the same forms as
signed by the other participating shareholders.
11. Demand Registration Right. Subject to the Company's qualification to use a
Form S-3, from and after the date that is one year after the date hereof,
the Grantee may request, in writing, registration (the "Demand
Registration") under the Securities Act of 1933, as amended (the
"Securities Act"), of all or a portion of the Shares and the Shares
underlying the warrant granted on the date hereof to ▇▇▇▇▇▇ ▇. Wygod,
Trustee under the Trust Agreement dated 12/30/87 for the benefit of ▇▇▇▇
▇▇▇▇▇▇ ("the "Other Shares") on Form S-3; provided, however, that such
request must include at least 75% of the aggregate of the Shares and the
Other Shares. Thereafter, the Company will use all reasonable efforts to
effect the Demand Registration under the Securities Act within thirty (30)
days after the receipt of the request. The Company shall not be required
to effect the Demand Registration requested by the
3
Grantee 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 Section
10 hereof apply or (b) such Grantee may sell the Shares and the Other
Shares requested to be included in the Demand Registration without
registration under the Securities Act, pursuant to the exemption provided
by (i) Rule 144 under the Securities Act, as such rule may be amended from
time to time, or (ii) any similar rule or registration adopted by the
Commission. The Granter shall be entitle to no more than one (1) Demand
Registration. The Company agrees to keep the Demand Registration effective
for a period of sixty (60) days beyond the effective date.
12. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
4
IN WITNESS WHEREOF, this Warrant Agreement has been executed and
delivered by the parties hereto on the date first written above.
eSPEED, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice Chairman
GRANTEE:
/s/ ▇▇▇▇▇▇ ▇. Wygod
----------------------------------------
▇▇▇▇▇▇ ▇. Wygod
5
WARRANT AGREEMENT
THIS WARRANT AGREEMENT, dated as of December 9, 1999 by and between
eSpeed, Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇ ▇. Wygod,
Trustee under the Trust Agreement dated 12/30/87 for the benefit of ▇▇▇▇ ▇▇▇▇▇▇
(the "Grantee").
In accordance with the letter agreement dated as of November 1, 1999 by and
between the Company and the Grantee, and in consideration for the services
rendered pursuant thereto, the Company hereby grants to the Grantee a warrant
(the "Warrant") to purchase shares of the Company's Class A Common Stock (the
"Shares") on the following terms and conditions:
1. Number of Shares. The number of Shares subject to the Warrant shall equal
25,000.
13. Exercise Price. The exercise price per Share subject to the Warrant shall
equal $ 22.00.
14. Exercisability/Termination. The Warrant shall be fully exercisable only
during the four year period commencing on the first anniversary hereof and
ending on the fifth anniversary hereof, at which time any unexercised
portion of the Warrant shall terminate. Notwithstanding the foregoing, the
Warrant shall terminate upon the consummation of any transaction whereby
the Company (or any successor to the Company or substantially all of its
business) becomes a wholly-owned subsidiary of any corporation or other
entity, unless such other corporation or entity shall continue or assume
the Warrant (in which case such other corporation or entity shall be
treated as the Company for all purposes hereunder, and shall make
appropriate adjustment pursuant to paragraph 5 below in the number and
kind of shares of stock subject thereto and the exercise price per share
thereof to reflect consummation of such transaction). If the Warrant is
not to be so assumed, the Company shall notify the Grantee of consummation
of such transaction at least ten days in advance thereof.
15. Exercise Procedures. The Grantee shall exercise the Warrant by delivery of
written notice to the Company setting forth the number of Shares with
respect to which the Warrant is to be exercised, together with a certified
check or bank draft payable to the order of the Company for an amount
equal to the sum of the exercise price for such Shares.
16. Adjustment Upon Changes in Capitalization. In the event any
recapitalization, forward or reverse split, reorganization, merger,
consolidation, spin-off, combination, repurchase, or exchange of Shares or
other securities, any special and nonrecurring dividend or distribution
(whether in the form of cash, securities or other property), liquidation,
dissolution, or other similar transactions or events, affects the Shares
such that an adjustment is, in the sole discretion of the Company,
appropriate in order to prevent dilution or enlargement of the rights of
the Grantee, then the Company shall equitably adjust (i) the number and
kind of Shares that may be delivered or deliverable in respect of the
Warrant, and/or (ii) the exercise price. In addition, the Company is
authorized to make adjustments in the terms and
conditions of, and the criteria included in, the Warrant (including,
without limitation, cancellation of the Warrant in exchange for its
in-the-money value, if any, or substitution of the Warrant using stock of
a successor or other entity) in recognition of unusual or nonrecurring
events (including, without limitation, an event described in the preceding
sentence) affecting the Company or any subsidiary of the Company or the
financial statements of the Company or any subsidiary of the Company, or
in response to changes in applicable laws, regulations, or accounting
principles.
17. Restrictions on Issuing Stock. The Company shall not be obligated to issue
or deliver Shares upon exercise of the Warrant or take any other action in
a transaction subject to the requirements of any applicable securities
law, any requirement under any listing agreement between the Company and
any national securities exchange or automated quotation system or any
other law, regulation or contractual obligation of the Company until the
Company is satisfied that such laws, regulations, and other obligations of
the Company have been complied with in full. Certificates representing
Shares issued pursuant to exercise of the Warrant will be subject to such
stop-transfer orders and other restrictions as may be applicable under
such laws, regulations and other obligations of the Company, including any
requirement that a legend or legends be placed thereon.
18. Limitations on Transferability. The Warrant will not be transferable by
the Grantee except by will or the laws of descent and distribution or to a
beneficiary in the event of the Grantee's death, shall not be pledged,
mortgaged, hypothecated or otherwise encumbered, or otherwise subject to
the claims of creditors; provided, however, that the Warrant or any
portion thereof may be transferred by the Grantee to (a) trusts
established for the benefit of his children, stepchildren and
grandchildren or (b) charities. Any such transferee shall be bound by the
terms of this Agreement.
19. Taxes. The Grantee shall be responsible for the payment of all income,
social security taxes and Medicare taxes related to the exercise of the
Warrant, and shall indemnify the Company against any liability it may
incur with respect to such taxes, including by reason of the Company not
withholding any such taxes on behalf of the Grantee.
20. No Stockholder Rights. The Warrant shall not confer on the Grantee any of
the rights of a stockholder of the Company unless and until Shares are
duly issued or transferred and delivered to the Grantee upon exercise of
the Warrant.
21. Piggyback Registration Rights. If the Company intends to register
securities of any of its shareholders for an offering to the public while
the Warrant is exercisable, the Company shall notify the Grantee of its
intention to do so and, subject to such limitations as shall affect all
selling shareholders equally and as may be imposed by any underwriter of
such offering or by law, the Grantee may irrevocably elect to participate
in such offering on a pari passu basis with any other selling shareholders
(other than the Investors (as defined in the Registration
2
Rights Agreement dated as of the date of the closing of the Company's
initial public offering, between the Company and the Investors) who shall
have priority over the Grantee on any cutback) based on the relative
number of shares owned and options or warrants vested of each of such
other selling shareholders (and its affiliates and permitted assigns) and
the Grantee (the "Pari Passu Percentage"). Such participation shall be
under the same terms and conditions as may apply to such other
shareholders, provided that the Grantee shall not have any rights to
select the underwriter or similar matters given to the other shareholders.
The Grantee shall make any election within 30 days of receipt of such
notice of intent to register by a writing given to the Secretary of the
Company, which writing shall indicate his irrevocable election to sell in
the intended offering, the number of Shares he wishes to sell and the
portion thereof to be included by him. The Grantee's notice may not be for
less than 50% of the number of Shares of the Grantee. The Grantee shall be
responsible for delivery of the Shares covered by the notice on a timely
basis. The Company shall only have to give notice of intent to register
under this paragraph to the Grantee and any notice of intent to
participate shall only be valid if received from the Grantee (or in the
event of his death, his executor). The Company may at any time abandon any
offering. The Company or the underwriter may at any time cutback
(including, without limitation, limiting the amount to the extent a prior
amount had not been specified) on the number of shares in any offering in
which the Company is offering shares and the underwriter may at any time
cutback (including, without limitation, limiting the amount to the extent
a prior amount had not been specified) on the number of shares to be
offered by shareholders in any offering in which the Company is not also
offering shares. In either such case the Grantee's Shares to be offered
shall be proportionately reduced so that the amounts offered by the
Grantee and by other shareholders (and their affiliates and permitted
assigns) satisfy the Pari Passu Percentage. The Grantee shall have no
right to participate in any offering by the Company that does not include
any shares owned by other shareholders and the provision of this paragraph
shall not apply to any registration on Form S-8, or otherwise with regard
to securities of compensatory plans of the Company, or any registration
relating to business acquisitions on Form S-1 or Form S-4. The Grantee
shall sign such underwriting and other agreements in the same forms as
signed by the other participating shareholders.
22. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York.
3
IN WITNESS WHEREOF, this Warrant Agreement has been executed and
delivered by the parties hereto on the date first written above.
eSPEED, INC.
By /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice Chairman
GRANTEE:
/s/ ▇▇▇▇▇▇ ▇. Wygod
----------------------------------------
▇▇▇▇▇▇ ▇. Wygod
4
