Exhibit 4.2
THE
SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION
WITH, THE SALE OR DISTRIBUTION THEREOF. SUCH SECURITIES MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED
OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT THEREUNDER OR AN EXEMPTION
FROM SUCH REGISTRATION
MARKETAXESS HOLDINGS INC .
WARRANT
TO
PURCHASE COMMON STOCK
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| Certificate Number: ___ |
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Dated:
, 2008 |
For
value received, [TCV VI, L.P. / TCV Member Fund, L.P.] (the “
Investor ”), is entitled to purchase from
MarketAxess Holdings Inc., a Delaware corporation (together with
its successors and assigns, the “ Company
”), at any time and from time to time after the date set
forth above and prior to 5:00 p.m., New York time, on the
Expiration Date (as defined in Section 1.1 below), at the
purchase price of $10.00 per share (as such price may be adjusted
pursuant to Section 2, the “ Exercise
Price ”) an aggregate of ___ fully-paid and
nonassessable shares of the Company’s voting common stock,
par value $0.003 per share (“ Common Stock
”) (as such shares may be adjusted pursuant to Section 2
below, the “ Warrant Shares ”). Certain
terms used but not defined elsewhere herein have the meanings
assigned to them in Section 16 below.
This
Warrant (“ Warrant ”) is being issued to
the holder in accordance with a Securities Purchase Agreement of
even date herewith (the “ Purchase Agreement
”) by and among the Company, the Investor and [TCV VI, L.P /
TCV Member Fund, L.P.].
Section 1. Term
and Exercise of Warrant .
1.1 Term of Warrant . The holder shall have
the right, at any time before 5:00 p.m., New York time, on the
tenth anniversary of the date hereof, or, if such date is not a
Business Day, the next Business Day (the “ Expiration
Date ”) to exercise this Warrant in accordance with
the terms hereof.
1.2 Exercise of Warrant .
(a)
Cash Exercise . This Warrant may be exercised at any time
prior to the Expiration Date and from time to time, in whole or in
part, upon surrender to the Company, in care of the Secretary of
the Company, together with the duly completed and signed form
of
Notice
of Exercise (designating thereon the holder’s election to
Cash Exercise) in the form attached hereto (the “
Exercise Notice ”), and payment to the Company
of the Exercise Price in effect on the date of such exercise for
the number of Warrant Shares in respect of which this Warrant is
then being exercised. Payment of the aggregate Exercise Price upon
exercise pursuant to this Section 1.2(a) shall be made by
delivery of a good check to the principal executive offices of the
Company or, at the holder’s discretion, by wire transfer of
immediately available funds in accordance with written wire
transfer instructions to be provided by the Company at the
holder’s request.
(b)
Net-Issue Exercise . In lieu of exercising the Warrant on a
cash basis pursuant to Section 1.2(a), the holder may elect to
exercise the Warrant at any time prior to the Expiration Date and
from time to time, in whole or in part, on a net-issue basis by
electing to receive the number of Warrant Shares which are equal in
value to the value of this Warrant (or any portion thereof to be
canceled in connection with such net-issue exercise) at the time of
any such net-issue exercise, by surrender of the Warrant, together
with the duly completed and signed Exercise Notice (designating the
holder’s election to Net-Issue Exercise), to the Company, in
care of the Secretary of the Company at the principal executive
offices of the Company; provided that the holder may not elect to
exercise the Warrant on a net-issue basis if at such time the
holder would be prohibited from transferring the Warrant Shares
pursuant to Section 2(a) of the Investor Rights Agreement. The
Exercise Notice shall be properly marked to indicate (A) the
number of Warrant Shares to be delivered to the holder in
connection with such net-issue exercise, (B) the number of
Warrant Shares in respect of which the Warrant is being surrendered
in payment of the aggregate Exercise Price for the Warrant Shares
to be delivered to the holder in connection with such net-issue
exercise, calculated as of the Determination Date (as defined
below) and (C) the number of Warrant Shares which remain
subject to the Warrant after such net-issue exercise, if any (each
as determined in accordance with this Section 1.2(b)). In the
event that the holder elects to exercise the Warrant in whole or in
part on a net-issue basis pursuant to this Section 1.2(b), the
Company will issue to the holder the number of Warrant Shares
determined in accordance with the following formula:
X = Y (A-B) / A
where:
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“ X ” is the number of Warrant Shares
to be issued to the holder in connection with such net-issue
exercise; |
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“ Y ” is the number of Warrant Shares
to be exercised, up to the number of Warrant Shares subject to this
Warrant; |
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“ A ” is the Fair Market Value as of
the Determination Date of one share of Common Stock; and |
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“ B ” is the Exercise Price in effect
as of the date of such net-issue exercise (as adjusted pursuant to
Section 2.1 below). |
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For
purposes of this Section 1.2(b), the “ Fair Market
Value ” of one share of Common Stock will have the
following meanings: (i) if the Common Stock is listed for
trading on a national securities exchange or admitted for trading
on a national market or other quotation system, then the Fair
Market Value of one share of Common Stock will be deemed to be the
closing sales price quoted on the principal securities exchange on
which the Common Stock is listed for trading, or if not so listed,
the average of the closing bid and asked prices for the Common
Stock quoted on the national market or other quotation system on
which Common Stock is admitted for trading, each as published in
The Wall Street Journal (western edition) (or, if such
prices are not published in The Wall Street Journal (western
edition), as reported by the applicable authority or association
governing trading of the Common Stock) (the “ Closing
Sales Price ”), in each case for the ten
(10) Trading Days immediately preceding, but not including the
Determination Date; or (ii) if the Common Stock is not listed
for trading on a national securities exchange or admitted for
trading on a national market or other quotation system, then the
Fair Market Value of one share of Common Stock will be deemed to be
the fair market value of the Common Stock as determined in good
faith from time to time by the Company’s board of
director’s (the “ Board of Directors
”) as of the Determination Date, and receipt and
acknowledgment of this Warrant by the holder will be deemed to be
an acknowledgment and acceptance of any such determination by the
Board of Directors as the final and binding determination of such
Fair Market Value for purposes of this Section 1.2(b). The
“ Determination Date ” of Fair Market
Value will be the date indicated on the Exercise Notice;
provided, however , that if the Company does not receive the
Exercise Notice within five (5) business days of the date
indicated thereon, the Determination Date will be the date the
Company receives such Exercise Notice.
(c)
Fractional Interests . No fractional shares of Common Stock
shall be issued upon the exercise of the Warrant, but in lieu
thereof the Company shall pay therefor in cash an amount equal to
the product obtained by multiplying the Closing Sales Price of one
share of Common Stock (or if the Common Stock is not listed for
trading on a national securities exchange or admitted for trading
on a national market or quotation system, then the Fair Market
Value of the Common Stock as determined by the Board of Directors
in the manner set forth in clause (ii) of the penultimate
sentence of Section 2.2(b)) on the Trading Day immediately
preceding the date of exercise of the Warrant times such fraction
(rounded to the nearest cent).
(d)
Deemed Issuance . Subject to 1.2(c) hereof, upon such
surrender of the Warrant, delivery of the Exercise Notice and, in
the case of a cash exercise pursuant to Section 1.2(a),
payment of the Exercise Price, the Company shall, subject to the
last sentence of this Section 1.2(d), issue and cause to be
delivered with all reasonable dispatch (and in no event more than
three Business Days from delivery of the Exercise Notice) to and in
the name of the holder, or in the name of such other person as
designated by the holder, a certificate or certificates for the
number of full shares of Common Stock so purchased upon the
exercise of the Warrant, together with a check or cash in respect
of any fraction of a share of Common Stock otherwise deliverable
upon such exercise, as provided in Section 1.2(c). Such
certificate or certificates shall be deemed to have been issued,
and the person in whose name any such certificates will be issuable
upon exercise of this Warrant (as indicated in the applicable
Election Notice) shall be deemed to have become a holder of record
of such Warrant Shares as of the date of the surrender of the
Warrant and, in the case of a cash exercise pursuant to
Section 1.2(a), payment of the Exercise Price. Notwithstanding
the foregoing, if HSR Clearance or FSA Approval is required in
connection with the exercise of the Warrant, as indicated by the
holder
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on the
applicable Election Notice delivered to the Company in accordance
with this Section 1.2, the Warrant Shares purchased upon exercise
of the Warrant and the check or cash in respect of any fractional
shares of Common Stock shall not be issued, and such holder shall
not be deemed to have become a holder of record of such Warrant
Shares, until the date upon which the holder has notified the
Company in writing that such holder has obtained HSR Clearance or
FSA Approval, as applicable, with respect to such exercise has
occurred. The holder shall use his, her or its reasonable best
efforts to obtain HSR Clearance or FSA Approval, if required, and
shall keep the Company informed of the status thereof.
(e)
Warrant Exercisable in Whole or in Part . The rights of
purchase represented by the Warrant shall be exercisable, at the
election of the holder, either in full or from time to time in
part. If the Warrant is exercised in respect of less than all of
the Warrant Shares purchasable on such exercise at any time prior
to the Expiration Date, a new Warrant of like tenor exercisable for
the remaining Warrant Shares may be issued and delivered to the
holder by the Company. The Warrant or any part thereof surrendered
in the exercise of the rights thereby evidenced shall thereupon be
cancelled by the Company and retired.
Section 2.
Adjustment of Exercise Price and Warrant Shares
.
2.1 Mechanical Adjustments . The Warrant
Shares purchasable upon the exercise of the Warrant and the
Exercise Price therefore shall be subject to adjustment from time
to time as follows:
(a)
Stock Splits, Combinations and Dividends. If the Company
shall at any time, and from time to time, pay a dividend on its
shares of Common Stock in shares of Common Stock, subdivide or
split its outstanding Common Stock into a larger number of shares
or combine or consolidate its outstanding Common Stock into a
smaller number of shares, then, in each such case, the number of
Warrant Shares thereafter issuable upon exercise of this Warrant
shall be adjusted so that this Warrant shall thereafter be
exercisable for the number of shares of Common Stock equal to the
number of shares of Common Stock which the holder would have held
after the occurrence of any of the events described above had this
Warrant been exercised in full immediately prior to the occurrence
of such event. An adjustment made pursuant to this
Section 3.1(a) shall become effective retroactively to the
related record date in the case of a dividend and shall become
effective on the related effective date in the case of a
subdivision, split, combination or consolidation. The provisions of
this Section 2.1(a) will apply with equal force and effect to
all successive dividends, subdivision or splits.
(b)
Reclassifications . In the event of a reclassification of
the Common Stock other than by stock split, subdivision,
consolidation or combination thereof, the Company will execute a
new Warrant, the terms of which provide that the holder of this
Warrant will have the right to exercise the rights represented by
such new Warrant, and procure upon such exercise in accordance with
the terms of this Warrant, in lieu of the shares of Common Stock
previously issuable upon exercise of the rights represented by this
Warrant, the kind and amount of stock, other securities, property,
cash or other assets receivable upon such reclassification by a
holder of an equivalent number of shares of Common Stock at the
time of such reclassification. Such new Warrant will provide for
adjustments which are as equivalent as practicable to the
adjustments
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provided
for in this Section 2.1 The provisions of this
Section 2.1(b) will apply with equal force and effect to all
successive reclassifications of the Common Stock.
(c)
Merger or Consolidation . If at any time there will be
effected a merger or consolidation of the Company with or into
another person, or a sale of all or substantially of the
Company’s assets, or all or substantially all of the assets
of the Company’s Subsidiaries, in such way that holders of
Common Stock will be entitled to receive in connection with such
transactions, stock, securities, property, cash or other assets
with respect to or in exchange for their shares of Common Stock,
then, as a part of such merger, consolidation or sale, lawful
appropriate provision will be made so that the holder after such
merger, consolidation or sale will be entitled to receive upon
exercise of its rights to purchase the Warrant Shares, the number
of shares of stock or other securities or property, cash or other
assets equivalent to that which a holder of the number of shares of
Common Stock deliverable upon exercise of this Warrant in full
pursuant to Section 1.2(a) immediately prior to such
transaction would have been entitled to receive in connection with
such merger, consolidation or sale. If the holders of shares of
Common Stock are entitled to make an election with respect to the
type, kind or amount of securities, property, cash or other assets
they are to receive in connection with such merger, consolidation
or sale, then for purposes of determining the type and number of
shares of stock or other securities or property, cash or other
assets issuable upon exercise of this Warrant, the holder of this
Warrant shall notify the Company,
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