Exhibit 1.1
5,000,000 SHARES
MARKETAXESS HOLDINGS INC.
COMMON STOCK
UNDERWRITING AGREEMENT
[November ], 2004
Credit Suisse First Boston LLC
J.P. Morgan Securities Inc.,
As Representatives of the several Underwriters
c/o Credit Suisse First Boston LLC
Eleven Madison Avenue
New York, New York 10010-3629
J.P. Morgan Securities Inc.
277 Park Avenue
New York, New York 10172
Ladies and Gentlemen:
1. Introductory. MarketAxess Holdings Inc., a Delaware corporation (the
"COMPANY"), proposes to issue and sell 5,000,000 shares (the "FIRM SECURITIES")
of its Common Stock, par value $0.003 per share (the "SECURITIES") to the
several underwriters named in Schedule I hereto (the "UNDERWRITERS"), for whom
Credit Suisse First Boston LLC and J.P. Morgan Securities Inc. are acting as
representatives (the "REPRESENTATIVES"). The Company also proposes to sell to
the Underwriters, at the option of the Underwriters, an aggregate of not more
than 750,000 additional shares of the Securities, as set forth below (such
750,000 additional shares are herein referred to as the "OPTIONAL SECURITIES").
The Firm Securities and the Optional Securities are herein referred to
collectively as "OFFERED SECURITIES." The Company hereby agrees with the
Underwriters as follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several Underwriters that:
(i) A registration statement (No. 333-112718) relating to the
Offered Securities, including a form of prospectus, has been filed
with the Securities and Exchange Commission (the
"COMMISSION") and either (A) has been declared effective under the
Securities Act of 1933, as amended (the "ACT"), and is not proposed
to be amended or (B) is proposed to be amended by amendment or
post-effective amendment. If such registration statement (the
"INITIAL REGISTRATION STATEMENT") has been declared effective,
either (A) an additional registration statement (the "ADDITIONAL
REGISTRATION STATEMENT") relating to the Offered Securities may have
been filed with the Commission pursuant to Rule 462(b) ("RULE
462(B)") under the Act and, if so filed, has become effective upon
filing pursuant to such Rule and the Offered Securities all have
been duly registered under the Act pursuant to the initial
registration statement and, if applicable, the additional
registration statement or (B) such an additional registration
statement is proposed to be filed with the Commission pursuant to
Rule 462(b) and will become effective upon filing pursuant to such
Rule and upon such filing the Offered Securities will all have been
duly registered under the Act pursuant to the initial registration
statement and such additional registration statement. If the Company
does not propose to amend the initial registration statement or if
an additional registration statement has been filed and the Company
does not propose to amend it, and if any post-effective amendment to
either such registration statement has been filed with the
Commission prior to the execution and delivery of this Agreement,
the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has
become effective upon filing pursuant to Rule 462(c) ("RULE 462(C)")
under the Act or, in the case of the additional registration
statement, Rule 462(b). For purposes of this Agreement, the
"EFFECTIVE TIME" with respect to the initial registration statement
or, if filed prior to the execution and delivery of this Agreement,
the additional registration statement means (A) if the Company has
advised the Representatives that it does not propose to amend such
registration statement, the date and time as of which such
registration statement, or the most recent post-effective amendment
thereto (if any) filed prior to the execution and delivery of this
Agreement, was declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c), or (B) if the Company
has advised the Representatives that it proposes to file an
amendment or post-effective amendment to such registration
statement, the date and time as of which such registration
statement, as amended by such amendment or post-effective amendment,
as the case may be, is declared effective by the Commission. If an
additional registration statement has not been filed prior to the
execution and delivery of
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this Agreement but the Company has advised the Representatives that
it proposes to file one, the "EFFECTIVE TIME" with respect to such
additional registration statement means the date and time as of
which such registration statement is filed and becomes effective
pursuant to Rule 462(b). The "EFFECTIVE DATE" with respect to the
initial registration statement or the additional registration
statement (if any) means the date of the Effective Time thereof. The
initial registration statement, as amended at its Effective Time,
including all information contained in the additional registration
statement (if any) and deemed to be a part of the initial
registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the
Form on which it is filed and including all information (if any)
deemed to be a part of the initial registration statement as of its
Effective Time pursuant to Rule 430A(b) ("RULE 430A(B)") under the
Act, is herein referred to as the "INITIAL REGISTRATION STATEMENT."
The additional registration statement, as amended at its Effective
Time, including the contents of the initial registration statement
incorporated by reference therein and including all information (if
any) deemed to be a part of the additional registration statement as
of its Effective Time pursuant to Rule 430A(b), is herein referred
to as the "ADDITIONAL REGISTRATION STATEMENT." The Initial
Registration Statement and the Additional Registration Statement are
herein referred to collectively as the "REGISTRATION STATEMENTS" and
individually as a "REGISTRATION STATEMENT." The form of prospectus
relating to the Offered Securities, as first filed with the
Commission pursuant to and in accordance with Rule 424(b) ("RULE
424(B)") under the Act or (if no such filing is required) as
included in a Registration Statement, is herein referred to as the
"PROSPECTUS." No document has been or will be prepared or
distributed in reliance on Rule 434 under the Act.
(ii) If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement:
(A) on the Effective Date of the Initial Registration Statement, the
Initial Registration Statement conformed in all material respects to
the applicable requirements of the Act and the rules and regulations
of the Commission (the "RULES AND REGULATIONS") and did not include
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; (B) on the Effective Date of the
Additional Registration Statement (if any), each Registration
Statement
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conformed or will conform, in all material respects to the
applicable requirements of the Act and the Rules and Regulations and
did not include, or will not include, any untrue statement of a
material fact and did not omit, or will not omit, to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading; and (C) on the date of this
Agreement, the Initial Registration Statement and, if the Effective
Time of the Additional Registration Statement is prior to the
execution and delivery of this Agreement, the Additional
Registration Statement each conforms, and at the time of filing of
the Prospectus pursuant to Rule 424(b) or (if no such filing is
required) at the Effective Date of the Additional Registration
Statement in which the Prospectus is included, each Registration
Statement and the Prospectus will conform, in all material respects,
to the applicable requirements of the Act and the Rules and
Regulations, and none of such documents includes, or will include,
any untrue statement of a material fact or omits, or will omit, to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading.
If the Effective Time of the Initial Registration Statement is
subsequent to the execution and delivery of this Agreement: on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement and the Prospectus will conform in all
material respects to the applicable requirements of the Act and the
Rules and Regulations, neither of such documents will include any
untrue statement of a material fact or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and no Additional Registration
Statement has been or will be filed.
The two preceding paragraphs do not apply to statements in or
omissions from a Registration Statement or the Prospectus based upon
written information furnished to the Company by any Underwriter
through the Representatives specifically for use therein, it being
understood and agreed that the only such information is that
described as such in Section 7(b) hereof.
(iii) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State of
Delaware, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus;
and the Company is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its
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business requires such qualification, except where the failure to so
qualify as a foreign corporation would not, individually or in the
aggregate, have a material adverse effect on the condition
(financial or other), business, properties or results of operations
of the Company and its subsidiaries taken as a whole (a "MATERIAL
ADVERSE EFFECT"). The jurisdictions listed on Exhibit A to the
opinion to be delivered to the Underwriters by Proskauer Rose LLP
pursuant to Section 6(d) hereof and on Exhibit A to the opinion to
be delivered to the Underwriters by Linklaters pursuant to Section
6(f) hereof are the only jurisdictions in which the Company
maintains an office or leases property.
(iv) Each subsidiary of the Company has been duly incorporated
and is an existing corporation in good standing under the laws of
the jurisdiction of its incorporation, with power and authority
(corporate and other) to own its properties and conduct its business
as described in the Prospectus; each subsidiary of the Company is
duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease
of property or the conduct of its business requires such
qualification, except where the failure to so qualify as a foreign
corporation would not, individually or in the aggregate, have a
Material Adverse Effect; all of the issued and outstanding capital
stock of each subsidiary of the Company has been duly authorized and
validly issued and is fully paid and nonassessable and the capital
stock of each subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects.
(v) The Securities outstanding prior to the issuance of the
Offered Securities have been duly authorized and are validly issued,
fully paid and non-assessable and conform to the description thereof
contained in the Prospectus. (vi) The Offered Securities have been
duly authorized and, when issued and delivered in accordance with
the terms of this Agreement, will be validly issued, fully paid and
non-assessable, and the issuance of such Offered Securities will not
be subject to any preemptive or similar rights.
(vii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or
any Underwriter for a brokerage commission, finder's fee or other
like payment in connection with this offering.
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(viii) There are no contracts, agreements or understandings
between the Company and any person granting such person the right to
require the Company to file a registration statement under the Act
with respect to any securities of the Company owned or to be owned
by such person or to require the Company to include such securities
in the securities registered pursuant to a Registration Statement or
in any securities being registered pursuant to any other
registration statement filed by the Company under the Act, other
than the Sixth Amended and Restated Registration Rights Agreement
dated as of April 4, 2002 (the "REGISTRATION RIGHTS AGREEMENT")
among the Company and the Investors and Other Holders named therein.
(ix) The Securities have been approved for quotation subject
to notice of issuance on the Nasdaq National Market.
(x) No consent, approval, authorization, or order of, or
filing with, any governmental agency or body or any court is
required to be obtained or made by the Company for the consummation
of the transactions contemplated by this Agreement in connection
with the sale of the Offered Securities, except such as have been
obtained and made under the Act or under the Securities Exchange Act
of 1934, as amended (the "EXCHANGE ACT"), such as have been obtained
from the National Association of Securities Dealers, Inc. (the
"NASD") and the Nasdaq National Market, and such as may be required
under state securities laws.
(xi) The execution, delivery and performance of this
Agreement, and the consummation of the transactions herein
contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any statute,
any rule, regulation or order of any governmental agency or body or
any court, domestic or foreign, having jurisdiction over the Company
or any subsidiary of the Company or any of their properties, or any
material agreement or instrument to which the Company or any such
subsidiary is a party or by which the Company or any such subsidiary
is bound or to which any of the properties of the Company or any
such subsidiary is subject, or the charter or bylaws of the Company
or any such subsidiary.
(xii) This Agreement has been duly authorized, executed and
delivered by the Company.
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(xiii) Except as disclosed in the Prospectus, the Company and
its subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in
each case free from liens, encumbrances and defects that would
materially affect the value thereof or materially interfere with the
use made or to be made thereof by them; and except as disclosed in
the Prospectus, the Company and its subsidiaries hold any leased
real or personal property under valid and enforceable leases with no
exceptions that would materially interfere with the use made or to
be made thereof by them.
(xiv) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business
now operated by them and have not received any notice of proceedings
relating to the revocation or modification of any such certificate,
authority or permit that, if determined adversely to the Company or
any of its subsidiaries, would individually or in the aggregate have
a Material Adverse Effect.
(xv) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent
that might have a Material Adverse Effect.
(xvi) The Company and its subsidiaries own, possess the right
to use or can acquire the right to use on reasonable terms, adequate
trademarks, trade names and other rights to those inventions,
know-how, patents, copyrights, confidential information and other
intellectual property (collectively, the "INTELLECTUAL PROPERTY
RIGHTS") necessary to conduct the business now operated by them, or
presently employed by them, and have not received any written notice
of infringement with respect to any third party intellectual
property rights that, if determined adversely to the Company or any
of its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect.
(xvii) Except as disclosed in the Prospectus, neither the
Company nor any of its subsidiaries is in violation of any statute,
any rule, regulation, decision or order of any governmental agency
or body or any court, domestic or foreign, relating to the use,
disposal or release of hazardous or toxic substances or relating to
the protection or restoration of the environment or human exposure
to hazardous or toxic substances (collectively, the "ENVIRONMENTAL
LAWS"), owns or operates any real property contaminated with any
substance that is subject to any
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environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to
any claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Company is not
aware of any pending investigation which might lead to such a claim.
(xviii) Except as disclosed in the Prospectus, there are no
pending actions, suits or proceedings against or affecting the
Company, any of its subsidiaries or any of their respective
properties that, if determined adversely to the Company or any of
its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect, or would materially and adversely affect
the ability of the Company to perform its obligations under this
Agreement, or which are otherwise material in the context of the
sale of the Offered Securities; and no such actions, suits or
proceedings, to the Company's knowledge, have been threatened or are
contemplated.
(xix) The financial statements, together with the related
notes, included in each Registration Statement and the Prospectus
present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements and related notes have been prepared in conformity with
the generally accepted accounting principles in the United States
applied on a consistent basis; all non-GAAP financial information,
if any, included in each Registration Statement and the Prospectus
complies with the requirements of Regulation G and Item 10 of
Regulation S-K under the Act; and the assumptions used in preparing
the pro forma financial statements included in each Registration
Statement and the Prospectus provide a reasonable basis for
presenting the significant effects directly attributable to the
transactions or events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the
pro forma columns therein reflect the proper application of those
adjustments to the corresponding historical financial statement
amounts.
(xx) Except as disclosed in the Prospectus, since the date of
the latest audited financial statements included in the Prospectus
there has been no material adverse change, nor any development or
event involving a prospective material adverse
8
change, in the condition (financial or other), business, properties
or results of operations of the Company and its subsidiaries taken
as a whole, and, except as disclosed in or contemplated by the
Prospectus, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(xxi) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of
the proceeds thereof as described in the Prospectus, will not be
required to register as an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(xxii) Any statistical and market-related data included in the
Prospectus are based on or derived from sources that the Company
believes to be reliable and accurate, and the Company has obtained
the written consent to the use of such data from such sources to the
extent required.
(xxiii) MarketAxess Corporation is registered under the
Exchange Act as a broker-dealer and is a member in good standing of
the NASD, and neither the Company nor any other subsidiary is
required to be so registered; MarketAxess Europe Limited is
registered with the Financial Services Authority as a dealer and is
a member in good standing of the Financial Services Authority and
neither the Company nor any other subsidiary is required to be so
registered; and to the extent required in connection with their
respective businesses, each of the Company and its subsidiaries is
also registered as a broker-dealer in each state or other
jurisdiction in which the failure to so register would have a
Material Adverse Effect.
(xxiv) Each of the Company and its subsidiaries maintain a
system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations;
(ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's
general or specific authorization and (iv) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to
any differences. The Company maintains disclosure controls and
procedures (as such term is defined in Rule 13a-14
9
under the Exchange Act) that are effective in ensuring that
information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified
in the rules and forms of the Commission, including, without
limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports
that it files or submits under the Exchange Act is accumulated and
communicated to the Company's management, including its principal
executive officer or officers and its principal financial officer or
officers, as appropriate to allow timely decisions regarding
required disclosure.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, and each Underwriter agrees, severally and not jointly, to purchase
from the Company, at a purchase price of $[ ] per share, that number of Firm
Securities set forth opposite the name of such Underwriter in Schedule I.
The Company will deliver the Firm Securities to the Representatives for
the accounts of the Underwriters, against payment of the purchase price in
Federal (same day) funds by wire transfer to an account at a bank acceptable to
the Representatives made to the order of the Company at the offices of Davis
Polk & Wardwell, 450 Lexington Avenue, New York, New York, at 10 A.M., New York
time, on [ ], 2004, or at such other time not later than seven full business
days thereafter as the Representatives and the Company determine (such time is
herein referred to as the "FIRST CLOSING DATE"). For purposes of Rule 15c6-1
under the Exchange Act, the First Closing Date (if later than the otherwise
applicable settlement date) shall be the settlement date for payment of funds
and delivery of securities for all the Offered Securities sold pursuant to the
offering. The certificates for the Firm Securities so to be delivered will be in
definitive form, in such denominations and registered in such names as the
Representatives request and will be made available for checking and packaging at
the above offices of Davis Polk & Wardwell at least 24 hours prior to the First
Closing Date.
In addition, upon written notice from the Representatives given to the
Company, from time to time not more than 30 days subsequent to the date of the
Prospectus, the Underwriters may purchase all or less than all of the Optional
Securities at the purchase price per Security to be paid for the Firm
Securities. The Company agrees to sell to the Underwriters the number of shares
of Optional Securities specified in such notice and the Underwriters agree,
severally and not jointly, to purchase such Optional Securities. Such Optional
Securities shall be purchased from the Company for the account of each
Underwriter in the same proportion as the number of Firm Securities set forth
opposite such Underwriter's
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name bears to the total number of Firm Securities (subject to adjustment by the
Representatives to eliminate fractions) and may be purchased by the Underwriters
only for the purpose of covering over-allotments made in connection with the
sale of the Firm Securities. No Optional Securities shall be sold or delivered
unless the Firm Securities previously have been, or simultaneously are, sold and
delivered. The right to purchase the Optional Securities or any portion thereof
may be exercised from time to time and to the extent not previously exercised
may be surrendered and terminated at any time upon notice by the Representatives
to the Company.
Each time for the delivery of and payment for the Optional Securities
(such time is herein referred to as an "OPTIONAL CLOSING DATE"), which may be
the First Closing Date (the First Closing Date and each Optional Closing Date,
if any, are herein referred to as a "CLOSING DATE"), shall be determined by the
Representatives but shall be not later than five full business days after
written notice of election to purchase Optional Securities is given. The Company
will deliver the Optional Securities being purchased on each Optional Closing
Date to the Representatives for the accounts of the several Underwriters,
against payment of the purchase price therefor in Federal (same day) funds by
wire transfer to an account at a bank acceptable to the Representatives made to
the order of the Company, at the above offices of Davis Polk & Wardwell. The
certificates for the Optional Securities being purchased on each Optional
Closing Date will be in definitive form, in such denominations and registered in
such names as the Representatives request upon reasonable notice prior to such
Optional Closing Date and will be made available for checking and packaging at
the above offices of Davis Polk & Wardwell at a reasonable time in advance of
such Optional Closing Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Company. The Company agrees with the several
Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is prior
to the execution and delivery of this Agreement, the Company will file the
Prospectus with the Commission pursuant to and in accordance with subparagraph
(1) (or, if applicable and if consented to by the Representatives, subparagraph
(4)) of Rule 424(b) not later than the earlier of (A) the second business day
following the execution and delivery of this Agreement or (B) the fifteenth
business day after the Effective Date of the Initial Registration Statement.
The Company will advise the Representatives promptly of any such filing pursuant
to Rule 424(b). If the Effective Time of the Initial Registration Statement is
prior to
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the execution and delivery of this Agreement and an additional registration
statement is necessary to register a portion of the Offered Securities under the
Act, but the Effective Time thereof has not occurred as of such execution and
delivery, the Company will file the additional registration statement or, if
filed, will file a post-effective amendment thereto with the Commission pursuant
to and in accordance with Rule 462(b) on or prior to 10:00 P.M., New York time,
on the date of this Agreement or, if earlier, on or prior to the time the
Prospectus is printed and distributed to any Underwriter, or will make such
filing at such later date as shall have been consented to by the
Representatives.
(b) The Company will advise the Representatives promptly of any proposal
to amend or supplement the initial or any additional registration statement as
filed or the related prospectus or the Initial Registration Statement, the
Additional Registration Statement (if any) or the Prospectus and will not effect
such amendment or supplement without the Representatives' consent; and the
Company will also advise the Representatives promptly of the effectiveness of
each Registration Statement (if its Effective Time is subsequent to the
execution and delivery of this Agreement) and of any amendment or supplement of
a Registration Statement or the Prospectus and of the institution by the
Commission of any stop order proceedings in respect of a Registration Statement
and will use its best efforts to prevent the issuance of any such stop order and
to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered Securities
is required to be delivered under the Act in connection with sales by any
Underwriter or dealer, any event occurs as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, or if it is necessary at any time to amend the Prospectus to comply
with the Act, the Company will promptly notify the Representatives of such event
and will promptly prepare and file with the Commission, at its own expense, an
amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance. Neither the Representatives'
consent to, nor the Underwriters' delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section 6
hereof.
(d) As soon as practicable, but not later than the Availability Date (as
defined below), the Company will make generally available to its securityholders
an earning statement covering a period of at least 12 months beginning after the
Effective Date of the Initial Registration Statement (or, if later, the
Effective Date of the Additional Registration Statement) which will satisfy the
provisions of Section 11(a) of the Act. For the purpose of the preceding
sentence, the "AVAILABILITY DATE" means the 45th day after the end of the fourth
fiscal quarter following the fiscal quarter that includes such Effective Date,
except that, if such
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fourth fiscal quarter is the last quarter of the Company's fiscal year,
"AVAILABILITY DATE" means the 90th day after the end of such fourth fiscal
quarter.
(e) The Company will furnish to the Representatives copies of each
Registration Statement (three of which will be signed and will include all
exhibits), each related preliminary prospectus, and, so long as a prospectus
relating to the Offered Securities is required to be delivered under the Act in
connection with sales by any Underwriter or dealer, the Prospectus and all
amendments and supplements to such documents, in each case in such quantities as
the Representatives shall reasonably request. The Prospectus shall be so
furnished on or prior to 3:00 P.M., New York time, on the business day following
the later of the execution and delivery of this Agreement or the Effective Time
of the Initial Registration Statement. All other such documents shall be so
furnished as soon as available. The Company will pay the expenses of printing
and distributing to the Underwriters all such documents.
(f) The Company will arrange for the qualification of the Offered
Securities for sale under the laws of such jurisdictions as the Representatives
designate and will continue such qualifications in effect so long as required
for the distribution.
(g) The Company agrees with the several Underwriters that the Company will
pay all expenses incident to the performance of the obligations of the Company
under this Agreement including: (i) the fees, disbursements and expenses of the
Company's counsel and the Company's accountants in connection with the
registration and delivery of the Offered Securities under the Act and all other
fees or expenses in connection with the preparation and filing of a Registration
Statement, any preliminary prospectus, the Prospectus and amendments and
supplements to any of the foregoing, including all printing costs associated
therewith, and the mailing and delivering of copies thereof to the Underwriters
and dealers; (ii) the cost of printing or producing any Blue Sky memorandum in
connection with the offer and sale of the Offered Securities under state
securities laws and all expenses in connection with the qualification of the
Offered Securities for offer and sale under state securities laws, including
filing fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky memorandum; (iii) all filing fees incurred in connection with the
review and qualification of the offering of the Offered Securities by the NASD;
(iv) any travel expenses of the Company's officers and employees and any other
expenses of the Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities, including the cost of any
aircraft chartered in connection with attending or hosting such meetings; (v)
all fees and expenses in connection with the preparation and filing of the
registration statement on Form 8-A relating to the Securities and all costs and
expenses incident to quoting the Offered Securities on the Nasdaq National
Market; (vii) the cost of printing
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certificates representing the Offered Securities; and (viii) the costs and
charges of any transfer agent, registrar or depositary.
(h) For a period of 180 days after the date of the initial public offering
of the Offered Securities, the Company shall not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to, any additional
shares of the Securities or securities convertible into or exchangeable or
exercisable for any Securities, or publicly disclose the intention to make any
such offer, sale, pledge, disposition or filing, without, in each case, the
prior written consent of the Representatives, except (i) the filing of a
registration statement on Form S-8, (ii) issuances of Securities pursuant to the
conversion of convertible securities or the exercise of warrants or stock
options, in each case outstanding on the date hereof and (iii) grants of
employee stock options pursuant to the terms of a plan in effect on the date
hereof and disclosed in the Prospectus and issuances of Securities pursuant to
the exercise of such options.
(i) For a period of 180 days after the date of the initial public offering
of the Offered Securities, the Company shall not waive the lock-up restrictions
contained in (i) the Registration Rights Agreement, (ii) the Stock Restriction
Agreement dated March 23, 2001 among the Company and Holders named therein and
(iii) any stock option plan adopted by the Company, without, in each case, the
prior written consent of the Representatives.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company herein, to the accuracy of the statements
of officers of the Company made pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Representatives shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall be on
or prior to the date of this Agreement or, if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to such
Effective Time), of PricewaterhouseCoopers LLP confirming that they are an
independent registered public accounting firm within the meaning of the Act and
the applicable published Rules and Regulations thereunder and stating to the
effect that:
(i) in their opinion the financial statements
14
examined by them and included in the Registration Statements comply
as to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(ii) they have performed the procedures specified by the
Public Company Accounting Oversight Board (United States) for a
review of interim financial information as described in Statement of
Auditing Standards No. 100, Interim Financial Information, on the
unaudited financial statements included in the Registration
Statements;
(iii) on the basis of the review referred to in clause (ii)
above, a reading of the latest available interim financial
statements of the Company, inquiries of officials of the Company who
have responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused
them to believe that:
(A) the unaudited financial statements included in the
Registration Statements do not comply as to form in all
material respects with the applicable accounting requirements
of the Act and the related published Rules and Regulations or
any material modifications should be made to such unaudited
financial statements for them to be in conformity with
generally accepted accounting principles;
(B) the unaudited consolidated revenues, income (loss)
from operations, net income (loss) and net income (loss) per
share amounts for the nine-month periods ended September 30,
2003 and 2004 included in the Prospectus do not agree with the
amounts set forth in the unaudited consolidated financial
statements for those same periods or were not determined on a
basis substantially consistent with that of the corresponding
amounts in the audited statements of income;
(C) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified date
not more than three business days prior to the date of this
Agreement, there was any change in the capital stock or any
increase in short-term indebtedness or long-term debt of the
Company and its consolidated subsidiaries or, at the date of
the latest available balance
15
sheet read by such accountants, there was any decrease in
consolidated net assets, as compared with amounts shown on the
latest balance sheet included in the Prospectus; or
(D) for the period from the closing date of the latest
income statement included in the Prospectus to the closing
date of the latest available income statement read by such
accountants there were any decreases, as compared with the
corresponding period of the previous year, in consolidated
revenues or income (loss) from operations or in the total or
per share amounts of consolidated net income (loss);
except in all cases set forth in clauses (C) and (D) above, for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Registration Statements (in each case
to the extent that such dollar amounts, percentages and other
financial information are derived from the general accounting
records of the Company and its subsidiaries subject to the internal
controls of the Company's accounting system or are derived directly
from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have found
such dollar amounts, percentages and other financial information to
be in agreement with such results, except as otherwise specified in
such letter.
For purposes of Section 6(a) hereof, (i) if the Effective Time of
the Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, the "REGISTRATION STATEMENTS" shall mean the
initial registration statement as proposed to be amended by the amendment
or post-effective amendment to be filed shortly prior to its Effective
Time, (ii) if the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement but the Effective
Time of the Additional Registration Statement is subsequent to such
execution and delivery, the "REGISTRATION STATEMENTS" shall mean the
Initial Registration Statement and the Additional Registration Statement
as proposed to be filed or as proposed to be amended by the post-effective
amendment to be filed shortly prior to its Effective Time and (iii) the
16
"PROSPECTUS" shall mean the prospectus included in the Registration
Statements.
(b) If the Effective Time of the Initial Registration Statement is not
prior to the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of this
Agreement or such later date as shall have been consented to by the
Representatives. If the Effective Time of the Additional Registration Statement
(if any) is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York time, on
the date of this Agreement or, if earlier, the time the Prospectus is printed
and distributed to any Underwriter, or shall have occurred at such later date as
shall have been consented to by the Representatives. If the Effective Time of
the Initial Registration Statement is prior to the execution and delivery of
this Agreement, the Prospectus shall have been filed with the Commission in
accordance with the Rules and Regulations and Section 5(a) hereof. Prior to such
Closing Date, no stop order suspending the effectiveness of a Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or, to the knowledge of the Company or the Representatives,
shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred: (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, properties
or results of operations of the Company and its subsidiaries taken as one
enterprise which, in the judgment of a majority in interest of the Underwriters
including the Representatives, is material and adverse and makes it impractical
or inadvisable to proceed with completion of the public offering or the sale of
and payment for the Offered Securities; (ii) any downgrading in the rating of
any debt securities of the Company by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act), or
any public announcement that any such organization has under surveillance or
review its rating of any debt securities of the Company (other than an
announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (iii) any change in U.S.
or international financial, political or economic conditions or currency
exchange rates or exchange controls as would, in the judgment of a majority in
interest of the Underwriters including the Representatives, be likely to
prejudice materially the success of the proposed issue, sale or distribution of
the Offered Securities, whether in the primary market or in respect of dealings
in the secondary market; (iv) any material suspension or material limitation of
trading in securities generally on the New York Stock Exchange or the Nasdaq
National Market, or any setting of minimum prices for trading on such exchange;
(v) any suspension of trading of any securities of the Company on any exchange
or in the over-the-counter market; (vi) any banking moratorium declared by U.S.
Federal or New York authorities; (vii) any major disruption of settlements of
securities or clearance services in the United States; or (viii) any attack on,
outbreak or
17
escalation of hostilities or act of terrorism involving the United States, any
declaration of war by Congress or any other national or international calamity
or emergency if, in the judgment of a majority in interest of the Underwriters
including the Representatives, the effect of any such attack, outbreak,
escalation, act, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the public offering or the sale of and
payment for the Offered Securities.
(d) The Representatives shall have received an opinion, dated such Closing
Date, of Proskauer Rose LLP, counsel for the Company, to the effect that:
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own its properties
and conduct its business as described in the Prospectus; and the
Company is duly qualified to do business as a foreign corporation in
good standing in each jurisdiction listed on Exhibit A to such
opinion.
(ii) Each U.S. subsidiary of the Company has been duly
incorporated and is an existing corporation in good standing under
the laws of the jurisdiction of its incorporation, with corporate
power and authority to own its properties and conduct its business
as described in the Prospectus; each U.S. subsidiary of the Company
is duly qualified to do business as a foreign corporation in good
standing in each jurisdiction listed on Exhibit A to such opinion;
all of the issued and outstanding capital stock of each U.S.
subsidiary of the Company has been duly authorized and validly
issued and, to such counsel's knowledge, is fully paid and
nonassessable; and, to such counsel's knowledge, the capital stock
of each U.S. subsidiary owned by the Company, directly or through
subsidiaries, is owned free from liens, encumbrances and defects.
(iii) The Securities outstanding prior to the issuance of the
Offered Securities have been duly authorized and are validly issued,
fully paid and non-assessable and conform in all material respects
to the description thereof contained in the Prospectus.
(iv) The Offered Securities have been duly authorized and,
when issued and delivered in accordance with the terms of this
Agreement, will be validly issued, fully paid and non-assessable,
and the issuance of such Offered Securities will not be subject to
any preemptive or similar rights under applicable law, the Company's
certificate of incorporation or bylaws or, to such
18
counsel's knowledge, any other agreement or instrument to which the
Company is a party or by which the Company is bound.
(v) To such counsel's knowledge, other than the Registration
Rights Agreement, there are no contracts, agreements or
understandings between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act.
(vi) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application of
the proceeds thereof as described in the Prospectus, will not be
required to register as an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended.
(vii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is
required to be obtained or made by the Company for the consummation
of the transactions contemplated by this Agreement in connection
with the sale of the Offered Securities, except such as have been
obtained and made under the Act, the Exchange Act, the rules of the
NASD, the rules of the Nasdaq National Market and such as may be
required under state securities laws.
(viii) The execution, delivery and performance by the Company
of this Agreement and the consummation of the transactions herein
contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under, any
applicable United States federal law, Delaware corporate law or New
York State law, rule, regulation or order known to such counsel of
any governmental agency or body or any court having jurisdiction
over the Company or any U.S. subsidiary of the Company or any of
their properties that, in such counsel's experience, is normally
applicable to general business corporations in relation to
transactions of the type contemplated by this Agreement, or the
charter or bylaws of the Company or any U.S. subsidiary of the
Company or any agreement or other instrument to which the Company or
any U.S. subsidiary is a party and which is filed as an exhibit to
the Registration Statement.
19
(ix) The Initial Registration Statement was declared effective
under the Act as of the date and time specified in such opinion, the
Additional Registration Statement, if any, was filed and became
effective under the Act as of the date and time, if determinable,
specified in such opinion, the Prospectus either was filed with the
Commission pursuant to the subparagraph of Rule 424(b) specified in
such opinion on the date specified therein or was included in the
Initial Registration Statement or the Additional Registration
Statement, as the case may be, and, based solely upon the oral
advice of the Commission, no stop order suspending the effectiveness
of a Registration Statement or any part thereof has been issued and
no proceedings for that purpose have been instituted or are pending
or contemplated under the Act; and each Registration Statement and
the Prospectus, and each amendment or supplement thereto, as of
their respective effective or issue dates, complied as to form in
all material respects with the applicable requirements of the Act
and the Rules and Regulations; in the course of the preparation of
the Registration Statement and the Prospectus, such counsel has
participated in conferences with certain officers of the Company,
with representatives of the independent or certified public
accountants for the Company and with representatives of the
Representatives and counsel for the Underwriters at which the
contents of the Registration Statement and the Prospectus were
discussed and, although such counsel need not pass upon or assume
any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus
(other than as expressly set forth in such opinion), on the basis of
the foregoing, nothing has come to such counsel's attention that
would lead them to believe that the Registration Statement (other
than the financial statements and related notes thereto and the
other financial and accounting data set forth therein or omitted
therefrom, as to which such counsel need express no view), as of its
effective date, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the
Prospectus (other than the financial statements and related notes
thereto and the other financial and accounting data set forth
therein or omitted therefrom, as to which such counsel need express
no view), as of its date and the Closing Date, contained or contains
an untrue statement of a material fact or omitted or omits to state
a material fact necessary to make the statements therein, in light
of the circumstances under which they were made, not misleading;
such counsel has considered the statements relating to legal matters
or
20
documents included in the Registration Statements and the Prospectus
under the captions "Description of Capital Stock" and "Material
United States Federal Income Tax Considerations to Non-U.S. Holders"
and in such counsel's opinion, such statements fairly summarize in
all material respects such matters or documents; it is understood
that such counsel need express no opinion as to the financial
statements or other financial data contained in the Registration
Statements or the Prospectus.
(x) This Agreement has been duly authorized, executed and
delivered by the Company.
(e) The Representatives shall have received an opinion, dated such Closing
Date, of the General Counsel of the Company, to the effect that:
(i) such counsel does not know of any legal or governmental
proceedings required to be described in a Registration Statement or
the Prospectus which are not described as required or of any
contracts or documents of a character required to be described in a
Registration Statement or the Prospectus or to be filed as exhibits
to a Registration Statement which are not described and filed as
required.
(f) The Representatives shall have received an opinion, dated such Closing
Date, of Linklaters, counsel for the Company with respect to the Company's
wholly-owned subsidiary, MarketAxess Europe Limited (the "Subsidiary"), to the
effect that:
(i) The Subsidiary has been duly incorporated and is an
existing corporation under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its
properties and conduct its business as described in the Prospectus;
all of the issued and outstanding capital stock of the Subsidiary
has been duly authorized and validly issued and, to such counsel's
knowledge, is fully paid and nonassessable.
(ii) All of the issued share capital of the Subsidiary has
been duly authorized and is held by the Company free from any liens
registered at Companies House;
(iii) The execution, delivery and performance by the Company
of this Agreement and the consummation of the transactions herein
contemplated will not result in a breach or violation of any of the
terms and provisions of, or constitute a default under any U.K.
statute, any U.K. rule, regulation or U.K.
21
order known to such counsel of any U.K. governmental agency or body
or any court in England having jurisdiction over the Subsidiary, or
any of the agreements listed in Schedule II hereto, or the
memorandum and articles of association of the Subsidiary.
(g) The Representatives shall have received from Davis Polk & Wardwell,
counsel for the Underwriters, such opinion or opinions, dated such Closing Date,
with respect to the validity of the Offered Securities delivered on such Closing
Date, the Registration Statements, the Prospectus and other related matters as
the Representatives may require, and the Company shall have furnished to such
counsel such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(h) The Representatives shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal financial
or accounting officer of the Company in which such officers, to the best of
their knowledge after reasonable investigation, shall state that: (i) the
representations and warranties of the Company in this Agreement are true and
correct; (ii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to
such Closing Date; (iii) no stop order suspending the effectiveness of any
Registration Statement has been issued and no proceedings for that purpose have
been instituted or are contemplated by the Commission; and (iv) the Additional
Registration Statement (if any) satisfying the requirements of subparagraphs (1)
and (3) of Rule 462(b) was filed pursuant to Rule 462(b), including payment of
the applicable filing fee in accordance with Rule 111(a) or (b) under the Act,
prior to the time the Prospectus was printed and distributed to any Underwriter.
(i) The Representatives shall have received a letter, dated such Closing
Date, of PricewaterhouseCoopers LLP which meets the requirements of Section 6(a)
hereof, except that the specified date referred to in such subsection will be a
date not earlier than the date hereof for purposes of the letter delivered on
the First Closing Date and a date not more than three days prior to any Optional
Closing Date for purposes of the letter delivered on any Optional Closing Date.
(j) On or prior to the date of this Agreement, the Representatives shall
have received lock-up letters from (i) each of the executive officers and
directors of the Company and (ii) each of the holders of equity securities of
the Company (including holders of options and warrants to purchase equity
securities of the Company), other than executive officers and directors, in each
case except as otherwise agreed to by the Representatives on behalf of the
Underwriters.
(k) No Underwriter shall have notice of an "adverse claim" on the Offered
Securities within the meaning of Section 8-102 of the UCC.
22
(l) The Representatives shall have received a certificate, on each of the
date hereof and on such Closing Date, dated as of such date, in form and
substance reasonably satisfactory to the Representatives, from a principal
financial or accounting officer of the Company with respect to certain financial
information contained in the Registration Statement and the Prospectus.
The Company will furnish the Representatives with such conformed copies of such
opinions, certificates, letters and documents as the Representatives reasonably
request. The Representatives may in their sole discretion waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder, whether in respect of an Optional Closing Date or
otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, members, directors and officers
and each person, if any, who controls such Underwriter within the meaning of
Section 15 of the Act, against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement in or omission or alleged omission from any of such
documents in reliance upon and in conformity with written information furnished
to the Company by any Underwriter through the Representatives specifically for
use therein, it being understood and agreed that the only such information
furnished by any Underwriter consists of the information described as such in
subsection (b) below; and provided, further, that with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission from
any preliminary prospectus, the indemnity agreement contained in this subsection
(a) shall not inure to the benefit of any Underwriter from whom the person
asserting any such losses, claims, damages or liabilities purchased the Offered
Securities concerned, to the extent that a prospectus relating to such Offered
Securities was required to be delivered by such Underwriter under the Act in
connection with such purchase and any such loss, claim, damage or liability of
such Underwriter results from the fact that there was not sent or given to such
person, at or prior to the written confirmation of the sale
23
of such Offered Securities to such person, a copy of the Prospectus if the
Company had previously furnished copies thereof to such Underwriter.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers, and each person, if any, who
controls the Company within the meaning of Section 15 of the Act against any
losses, claims, damages or liabilities to which the Company may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or the alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company by such Underwriter through the Representatives specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Company in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the following information in the Prospectus furnished on behalf of each
Underwriter: the concession and reallowance figures appearing in the fourth
paragraph under the caption "Underwriting," the information contained in the
fifteenth and sixteenth paragraphs under the caption "Underwriting" regarding
stabilizing transactions, over-allotment transactions, syndicate covering
transactions and penalty bids, and the information regarding electronic
distribution of the Prospectus in the seventeenth paragraph under the caption
"Underwriting."
(c) Promptly after receipt by an indemnified party under this Section or
Section 9 hereof of notice of the commencement of any action, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party under subsection (a) or (b) above or Section 9 hereof, notify the
indemnifying party of the commencement thereof; provided that the failure to
notify the indemnifying party shall not relieve it from any liability that it
may have under subsection (a) or (b) above or Section 9 hereof except to the
extent that it has been materially prejudiced (through the forfeiture of
substantive rights or defenses) by such failure; and provided, further, that the
failure to notify the indemnifying party shall not relieve it from any liability
that it may have to an indemnified party otherwise than under subsection (a) or
(b) above or Section 9 hereof. In case any such action is brought against any
indemnified party and it notifies an indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense
24
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying 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 under this
Section or Section 9 hereof, as the case may be, for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement (i) includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, 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 subsection (a) or (b) above, (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company, on
the one hand, and the Underwriters, on the other, from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company, on the one hand, and the Underwriters, on the other, in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company, on the one hand,
and the Underwriters, on the other, shall be deemed to be in the same proportion
as the total net proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and commissions received
by the Underwriters. 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 Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. 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 subsection (d) 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 is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
25
by which the total price at which the Securities underwritten by it and
distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section or Section 9 hereof
shall be in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if any, who
controls any Underwriter or the QIU (as hereinafter defined) within the meaning
of the Act. The obligations of the Underwriters under this Section shall be in
addition to any liability which the respective Underwriters may otherwise have
and shall extend, upon the same terms and conditions, to each director of the
Company, to each officer of the Company who has signed a Registration Statement
and to each person, if any, who controls the Company within the meaning of the
Act.
8. Default of Underwriters. If any Underwriter or Underwriters default in
their obligations to purchase Offered Securities hereunder on either the First
Closing Date or any Optional Closing Date and the aggregate number of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, the
Representatives may make arrangements satisfactory to the Company for the
purchase of such Offered Securities by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
non-defaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Underwriters agreed but failed to purchase on such Closing Date. If
any Underwriter or Underwriters so default and the aggregate number of Offered
Securities with respect to which such default or defaults occur exceeds 10% of
the total number of Offered Securities that the Underwriters are obligated to
purchase on such Closing Date, and arrangements satisfactory to the
Representatives and the Company for the purchase of such Offered Securities by
other persons are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Underwriter
or the Company, except as provided in Section 10 hereof; provided that if such
default occurs with respect to Optional Securities after the First Closing Date,
this Agreement will not terminate as to the Firm Securities or any Optional
Securities purchased prior to such termination. As used in this Agreement, the
term "Underwriter" includes any
26
person substituted for an Underwriter under this Section. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
9. Qualified Independent Underwriter. The Company hereby confirms that, at
its request, UBS Securities LLC has, without compensation, acted as "qualified
independent underwriter" (in such capacity, the "QIU") within the meaning of
Rule 2720 of the Conduct Rules of the NASD in connection with the offering of
the Offered Securities. The Company agrees that it shall pay for any expenses,
including the reasonable expenses of counsel, of the QIU. The Company will
indemnify and hold harmless the QIU and each person who is a director, officer
or affiliate of, or controls, the QIU within the meaning of either section 15 of
the Act, or section 20 of the Exchange Act, against any losses, claims, damages
or liabilities, joint or several, to which the QIU may become subject under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon the QIU's acting, or
alleged failure to act, as such "qualified independent underwriter" and will
reimburse the QIU for any legal or other expenses reasonably incurred by the QIU
in connection with investigating or defending any such loss, claim, damage,
liability or action as such expenses are incurred.
10. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Underwriter, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated pursuant
to Section 8 hereof or if for any reason the purchase of the Offered Securities
by the Underwriters is not consummated, the Company shall remain responsible for
the expenses to be paid or reimbursed by them pursuant to Section 5 hereof and
the respective obligations of the Company and the Underwriters pursuant to
Section 7 hereof and the obligations of the Company pursuant to Section 9 hereof
shall remain in effect, and if any Offered Securities have been purchased
hereunder the representations and warranties in Section 2 hereof and all
obligations under Section 5 hereof shall also remain in effect. If the purchase
of the Offered Securities by the Underwriters is not consummated for any reason
other than solely because of the termination of this Agreement pursuant to
Section 8 hereof or the occurrence of any event specified in clauses (iii),
(iv), (vi), (vii), or (viii) of Section 6(c) hereof, the Company will reimburse
the Underwriters for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
27
11. Notices. All communications hereunder will be in writing and: (i) if
sent to the Underwriters, will be mailed, delivered or faxed and confirmed to
the Representatives, c/o Credit Suisse First Boston LLC, Eleven Madison Avenue,
New York, New York, 10010-3629, Attention: Transactions Advisory Group (fax:
212-325-4296), and J.P. Morgan Securities Inc., 277 Park Avenue, New York, New
York 10172, Attention: Equity Capital Markets (fax: 212-622-8358) or (ii) if
sent to the Company, will be mailed, delivered or faxed and confirmed to it at
MarketAxess Holdings Inc., 140 Broadway, 42nd Floor, New York, New York 10005,
Attention: Mr. Charles R. Hood, General Counsel (fax: 212-813-6384); provided,
however, that any notice to an Underwriter pursuant to Section 7 hereof will be
mailed, delivered or faxed and confirmed to such Underwriter.
12. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective personal representatives and
successors and the officers and directors and controlling persons referred to in
Section 7 hereof, and no other person will have any right or obligation
hereunder.
13. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
and any action under this Agreement taken by the Representatives jointly will be
binding upon all the Underwriters.
14. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
15. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
The Company and the Underwriters hereby submit to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
28
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Company one of the counterparts
hereof, whereupon it will become a binding agreement between the Company and the
several Underwriters in accordance with its terms.
Very truly yours,
MarketAxess Holdings Inc.
By:
-------------------------------------
Name: Richard M. McVey
Title: President and
Chief Executive Officer
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written.
Credit Suisse First Boston LLC
J.P. Morgan Securities Inc.,
Acting on behalf of themselves and as
the Representatives of the several
Underwriters listed on Schedule I
hereto.
Credit Suisse First Boston LLC
By:
-------------------------------------
Name:
Title:
J.P. Morgan Securities Inc.
By:
-------------------------------------
Name:
Title:
SCHEDULE I
NUMBER OF
FIRM SECURITIES
UNDERWRITERS TO BE PURCHASED
- ------------ ---------------
Credit Suisse First Boston LLC..................
J.P. Morgan Securities Inc......................
Banc of America Securities LLC..................
Bear, Stearns & Co. Inc. .......................
UBS Securities LLC..............................
---------------
Total.................................. 5,000,000
===============
II-1
SCHEDULE II
II-1