•] Shares FXCM INC. Class A Common Stock $.01 par value UNDERWRITING AGREEMENT
Exhibit 1.1
[•] Shares
Class A Common Stock $.01 par value
[•], 2010
Credit Suisse Securities (USA) LLC
▇.▇. ▇▇▇▇▇▇ Securities LLC
Citigroup Global Markets Inc.,
As Representatives of the Several Underwriters (“Representatives”)
c/o Credit Suisse Securities (USA) LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
▇.▇. ▇▇▇▇▇▇ Securities LLC
Citigroup Global Markets Inc.,
As Representatives of the Several Underwriters (“Representatives”)
c/o Credit Suisse Securities (USA) LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. FXCM Inc., a Delaware corporation (“Company”) agrees with the several
Underwriters named in Schedule A hereto (“Underwriters”) to issue and sell to the several
Underwriters [•] shares of its Class A common stock (“Securities”) (such Securities being
hereinafter referred to as the “Firm Securities”). The Company also agrees to sell to the
Underwriters, at the option of the Underwriters, an aggregate of not more than [•] additional
shares of its Securities (“Optional Securities”) of the Company’s Securities, as set forth below.
The Firm Securities and the Optional Securities are herein collectively called the “Offered
Securities”. In connection with the consummation of the offering contemplated by this agreement,
all the classes of outstanding limited liability company interests in FXCM Holdings, LLC, a
Delaware limited liability company (“FXCM Holdings”), will be converted into a single new class of
limited liability company interests (“Holdings Units”) and, upon the consummation of this offering,
the Company intends to use a portion of the proceeds from the sale of the Offered Securities to
purchase Holdings Units from existing owners in FXCM Holdings, including members of senior
management, and a portion of the proceeds to purchase newly-issued Holdings Units from FXCM
Holdings.
2. Representations and Warranties of the Company and FXCM Holdings. (a) The Company and FXCM
Holdings, jointly and severally, represent and warrant to, and agree with, the several Underwriters
that:
(i) Filing and Effectiveness of Registration Statement; Certain Defined Terms. The
Company has filed with the Commission a registration statement on Form S-1 (No. 333-169234)
covering the registration of the Offered Securities under the Act, including a related
preliminary prospectus or prospectuses. At any particular time, this initial registration
statement, in the form then on file with the Commission, including all information
contained in the registration statement (if any) pursuant to Rule 462(b) and then deemed to
be a part of the initial registration statement, and all 430A Information and all 430C
Information, that in any case has not then been superseded or modified, shall be referred
to as the “Initial Registration Statement”. The Company may also have filed, or may file
with the Commission, a Rule 462(b) registration statement covering the registration of
Offered Securities. At any particular time, this Rule 462(b) registration statement, in
the form then on file with the Commission, including the contents of the Initial
Registration Statement incorporated by reference therein and including all 430A Information and all
430C Information, that in any case has not then been superseded or modified, shall be
referred to as the “Additional Registration Statement”.
As of the time of execution and delivery of this Agreement, the Initial Registration
Statement has been declared effective under the Act and is not proposed to be amended. Any
Additional Registration Statement has or will become effective upon filing with the
Commission pursuant to Rule 462(b) and is not proposed to be amended. The Offered
Securities all have been or will be duly registered under the Act pursuant to the Initial
Registration Statement and, if applicable, the Additional Registration Statement.
For purposes of this Agreement:
“430A Information”, with respect to any registration statement, means information
included in a prospectus and retroactively deemed to be a part of such registration
statement pursuant to Rule 430A(b).
“430C Information”, with respect to any registration statement, means information
included in a prospectus then deemed to be a part of such registration statement pursuant
to Rule 430C.
“Act” means the Securities Act of 1933, as amended.
“Applicable Time” means [•]:00 [a/p].m. (Eastern time) on the date of this Agreement.
“Closing Date” has the meaning defined in Section 3 hereof.
“Commission” means the Securities and Exchange Commission.
“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 the date and time as of which such Registration Statement was declared effective by
the Commission or has become effective upon filing pursuant to Rule 462(c). If an
Additional Registration Statement has not been filed prior to the execution and delivery of
this Agreement but the Company has advised the Representatives that it proposes to file
one, “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).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Final Prospectus” means the Statutory Prospectus that discloses the public offering
price, other 430A Information and other final terms of the Offered Securities and otherwise
satisfies Section 10(a) of the Act.
“General Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced by its
being so specified in Schedule B to this Agreement.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as
defined in Rule 433, relating to the Offered Securities in the form filed or required to be
filed with the Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g).
“Limited Use Issuer Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is not a General Use Issuer Free Writing Prospectus.
The Initial Registration Statement and the Additional Registration Statement are
referred to collectively as the “Registration Statements” and individually as a
“Registration Statement”. A “Registration Statement” with reference to a particular time
means the Initial Registration Statement and any Additional Registration Statement as of
such time. A “Registration Statement” without reference to a time means such Registration
Statement as of its Effective Time. For purposes of the foregoing definitions, 430A
Information with respect to a Registration
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Statement shall be considered to be included in such Registration Statement as of the
time specified in Rule 430A.
“Rules and Regulations” means the rules and regulations of the Commission.
“Securities Laws” means, collectively, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002
(“▇▇▇▇▇▇▇▇-▇▇▇▇▇”), the Act, the Exchange Act, the Rules and Regulations, the auditing
principles, rules, standards and practices applicable to auditors of “issuers” (as defined
in ▇▇▇▇▇▇▇▇-▇▇▇▇▇) promulgated or approved by the Public Company Accounting Oversight Board
and, as applicable, the rules of The New York Stock Exchange and the NASDAQ Stock Market
(“Exchange Rules”).
“Statutory Prospectus” with reference to a particular time means the prospectus included in a
Registration Statement immediately prior to that time, including any 430A Information or 430C
Information with respect to such Registration Statement. For purposes of the foregoing definition,
430A Information shall be considered to be included in the Statutory Prospectus as of the actual
time that form of prospectus is filed with the Commission pursuant to Rule 424(b) or Rule 462(c)
and not retroactively.
Unless otherwise specified, a reference to a “rule” is to the indicated rule under the
Act.
(ii) Compliance with Securities Act Requirements. (i) (A) At their respective
Effective Times, (B) on the date of this Agreement and (C) on each Closing Date, each of
the Initial Registration Statement and the Additional Registration Statement (if any)
conformed and will conform in all material respects to the requirements of the Act and (ii)
on its date, at the time of filing of the Final Prospectus pursuant to Rule 424(b) or (if
no such filing is required) at the Effective Time of the Additional Registration Statement
in which the Final Prospectus is included, and on each Closing Date, the Final Prospectus
will conform in all material respects to the requirements of the Act and the Rules and
Regulations and will 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, in light of the circumstances in which they were made, not misleading. The
preceding sentence does not apply to statements in or omissions from any such document
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 8(c) hereof.
(iii) Ineligible Issuer Status. (i) At the time of the initial filing of the Initial
Registration Statement and (ii) at the date of this Agreement, the Company was not and is
not an “ineligible issuer,” as defined in Rule 405, including (x) the Company or any
subsidiary of the Company in the preceding three years not having been convicted of a
felony or misdemeanor or having been made the subject of a judicial or administrative
decree or order as described in Rule 405 and (y) the Company in the preceding three years
not having been the subject of a bankruptcy petition or insolvency or similar proceeding,
not having had a registration statement be the subject of a proceeding under Section 8 of
the Act and not being the subject of a proceeding under Section 8A of the Act in connection
with the offering of the Offered Securities, all as described in Rule 405.
(iv) General Disclosure Package. As of the Applicable Time, neither (i) the General
Use Issuer Free Writing Prospectus(es) issued at or prior to the Applicable Time, the
preliminary prospectus, dated [•], 2010 (which is the Statutory Prospectus included in the
Initial Registration Statement immediately prior to its Effective Time) and the other
information, if any, stated in Schedule B to this Agreement to be included in the General
Disclosure Package, all considered together (collectively, the “General Disclosure
Package”), nor (ii) any individual Limited Use Issuer Free Writing Prospectus, when
considered together with the General Disclosure Package, included any untrue statement of a
material fact or omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading. The preceding sentence does not apply to statements in or omissions from any
Statutory Prospectus or any Issuer Free Writing Prospectus 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
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information furnished by any Underwriter consists of the information described as such
in Section 8(c) hereof.
(v) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus, as of its
issue date and at all subsequent times through the completion of the public offer and sale
of the Offered Securities or until any earlier date that the Company notified or notifies
the Representatives as described in the next sentence, did not, does not and will not
include any information that conflicted, conflicts or will conflict with the information
then contained in the Registration Statement. If at any time following issuance of an
Issuer Free Writing Prospectus and prior to the completion of the public offer and sale of
the Offered Securities there occurred or occurs an event or development as a result of
which such Issuer Free Writing Prospectus conflicted or would conflict with the information
then contained in the Registration Statement or as a result of which such Issuer Free
Writing Prospectus, if republished immediately following such event or development, would
include an untrue statement of a material fact or omitted or would omit to state a material
fact necessary in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading, the Company has promptly notified or will
promptly notify the Representatives.
(vi) Good Standing of the Company and FXCM Holdings. Each of the Company and FXCM
Holdings has been duly incorporated or formed and is validly existing as a corporation or
limited liability company 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 General Disclosure Package; and each of the Company and FXCM Holdings is
duly qualified to do business as a foreign corporation or other entity in good standing (to
the extent such concept exists) in all other jurisdictions in which its ownership or lease
of property or the conduct of its business requires such qualification in each case except
as would not reasonably be expected to have a material adverse effect on the condition
(financial or otherwise), results of operations, business, properties or prospects of the
Company and FXCM Holdings and its subsidiaries taken as a whole (“Material Adverse
Effect”).
(vii) Subsidiaries. As of the date hereof, the Company has no subsidiaries. Each
subsidiary of FXCM Holdings has been duly incorporated or formed and is validly existing as
a corporation or other entity in good standing (to the extent such concept exists) under
the laws of the jurisdiction of its incorporation or formation, in each case except as
would not reasonably be expected to have a Material Adverse Effect. Each subsidiary of
FXCM Holdings has full corporate or limited liability company or other entity power and
authority to own its properties and conduct its business as currently being carried on and
described in the General Disclosure Package except as would not reasonably be expected to
have a Material Adverse Effect. Each subsidiary of FXCM Holdings is duly qualified to do
business as a foreign corporation or other entity in good standing (to the extent such
concept exists) in each jurisdiction in which its ownership or lease of property or the
conduct of its business requires such qualification and in which the failure to so qualify
would have a Material Adverse Effect.
(viii) Offered Securities. The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; the authorized equity
capitalization of the Company is as set forth in the General Disclosure Package; all
outstanding shares of capital stock of the Company are, and, when the Offered Securities
have been delivered and paid for in accordance with this Agreement on each Closing Date,
such Offered Securities will have been, validly issued, fully paid and nonassessable, will
conform to the information in the General Disclosure Package and to the description of such
Offered Securities contained in the Final Prospectus; the stockholders of the Company have
no preemptive rights with respect to the Securities; and none of the outstanding shares of
capital stock of the Company have been issued in violation of any preemptive or similar
rights of any security holder.
(ix) No Finder’s Fee. Except as disclosed in the General Disclosure Package, there
are no contracts, agreements or understandings between the Company and any person that
would give rise
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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.
(x) Registration Rights. Except as disclosed in the General Disclosure Package, 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 (collectively, “registration
rights”), and any person to whom the Company has granted registration rights cannot
exercise such rights until after the expiration of the Lock-Up Period referred to in
Section 5(j) hereof.
(xi) Listing. The Offered Securities have been approved for listing on The New York
Stock Exchange, subject to notice of issuance.
(xii) Absence of Further Requirements. No consent, approval, authorization, or order
of, or filing or registration 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, or made and such as may be required under the Act, the
Exchange Act, the rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and
state securities laws.
(xiii) Absence of Defaults and Conflicts Resulting from Transaction. The execution,
delivery and performance of this Agreement, and the issuance and sale of the Offered
Securities will not result in a breach or violation of any of the terms and provisions of,
or constitute a default or a Debt Repayment Triggering Event (as defined below) under, or
result in the imposition of any lien, charge or encumbrance upon any property or assets of
the Company, FXCM Holdings or any of its subsidiaries pursuant to, (i) the charter, by-laws
or similar organizational document of the Company or FXCM Holdings, (ii) the charter,
by-laws or similar organizational document of any subsidiary of FXCM Holdings, (iii) any
statute, rule, regulation or order of any governmental agency or body or any court,
domestic or foreign, having jurisdiction over the Company, FXCM Holdings or any of its
subsidiaries or any of their properties, or (iv) any agreement or instrument to which the
Company, FXCM Holdings or any of its subsidiaries is a party or by which the Company, FXCM
Holdings or any of its subsidiaries is bound or to which any of the properties of the
Company, FXCM Holdings or any of its subsidiaries is subject, except for, in the case of
foregoing clauses (iii) and (iv), any such breach, violation, default or imposition that
would not, individually or in the aggregate, result in a Material Adverse Effect or
adversely affect the ability of the Company and FXCM Holdings to perform its obligations
under this Agreement or consummate the transactions contemplated hereby; a “Debt Repayment
Triggering Event” means any event or condition that gives, or with the giving of notice or
lapse of time would give, the holder of any note, debenture, or other evidence of
indebtedness (or any person acting on such holder’s behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such indebtedness by the
Company, FXCM Holdings or any of its subsidiaries.
(xiv) Absence of Existing Defaults and Conflicts. Each of the Company and FXCM
Holdings is not and FXCM Holdings’ subsidiaries are not in violation of its respective
charter or by-laws or in default (or with the giving of notice or lapse of time would be in
default) under any existing obligation, agreement, covenant or condition contained in any
indenture, loan agreement, mortgage, lease or other agreement or instrument to which any of
them is a party or by which any of them is bound or to which any of the properties of any
of them is subject, except such defaults that would not, individually or in the aggregate,
result in a Material Adverse Effect.
(xv) Authorization of Agreement. This Agreement has been duly authorized, executed
and delivered by the Company and FXCM Holdings.
5
(xvi) Possession of Licenses and Permits. Except as would not reasonably be expected
to have a Material Adverse Effect, the Company, FXCM Holdings and each of its subsidiaries
possess, and are in compliance with the terms of, all consents, certificates,
authorizations, franchises, licenses, exemptions and permits, orders of and from federal,
state, local, and foreign government and/or regulatory authorities, all self-regulatory
organizations, and all courts or tribunals (“Licenses”) necessary or material to the
conduct of the business now conducted or proposed in the General Disclosure Package to be
conducted by them and, except as would not reasonably be expected to have a Material
Adverse Effect, have not received any notice of investigation, inquiry or proceedings
relating to the revocation or modification of any Licenses.
(xvii) Absence of Labor Dispute. No labor dispute with the employees of the Company
or any of its subsidiaries exists or, to the knowledge of the Company, is imminent that
could have a Material Adverse Effect.
(xviii) Intellectual Property. The Company and its subsidiaries own, possess or can
acquire on reasonable terms sufficient trademarks, trade names, patent rights, copyrights,
domain names, licenses, approvals, trade secrets, inventions, technology, know-how and
other intellectual property and similar rights, including registrations and applications
for registration thereof (collectively, “Intellectual Property Rights”) necessary or
material to the conduct of the business now conducted or proposed in the General Disclosure
Package to be conducted by them, except to the extent the failure of such ownership,
possession or acquisition (and/or the expected expiration) of any such Intellectual
Property Rights would not, individually or in the aggregate, have a Material Adverse
Effect. Except as disclosed in the General Disclosure Package (i) there are no rights of
third parties to any of the Intellectual Property Rights owned by the Company or its
subsidiaries; (ii) there is no material infringement, misappropriation, breach, default or
other violation by the Company or its subsidiaries of any of the Intellectual Property
Rights of any other persons; (iii) there is no pending or threatened action, suit,
proceeding or claim by others challenging the Company’s or any subsidiary’s rights in or to
any of their Intellectual Property Rights, and the Company is unaware of any facts which
would form a reasonable basis for any such claim; (iv) there is no pending or threatened
action, suit, proceeding or claim by others challenging the validity, enforceability or
scope of any such Intellectual Property Rights, and the Company is unaware of any facts
which would form a reasonable basis for any such claim; (v) there is no pending or
threatened action, suit, proceeding or claim by others that the Company or any subsidiary
infringes, misappropriates or otherwise violates or conflicts with any Intellectual
Property Rights or other proprietary rights of others and the Company is unaware of any
other fact which would form a reasonable basis for any such claim; and (vi) none of the
Intellectual Property Rights used by the Company or its subsidiaries in their businesses
has been obtained or is being used by the Company or its subsidiaries in violation of any
contractual obligation binding on the Company or any of its subsidiaries or in violation of
the rights of any persons, except in each case covered by clauses (i)—(vi) such as would
not, if determined adversely to the Company or any of its subsidiaries, individually or in
the aggregate, have a Material Adverse Effect.
(xix) Accurate Disclosure. The statements in the General Disclosure Package and the
Final Prospectus under the headings “Material United States Federal Income and Estate Tax
Consequences to Non-U.S. Holders” and “Description of Capital Stock”, insofar as such
statements summarize legal matters, agreements, documents or proceedings discussed therein,
are accurate and fair summaries of such legal matters, agreements, documents or proceedings
and present the information required to be shown.
(xx) Absence of Manipulation. The Company has not taken, directly or indirectly, any
action that is designed to or that has constituted or that would reasonably be expected to
cause or result in the unlawful stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Offered Securities.
(xxi) Statistical and Market-Related Data. Any third-party statistical and
market-related data included in a Registration Statement, the Final Prospectus or the
General Disclosure Package are
6
based on or derived from sources that the Company believes to be reliable and accurate in
all material respects.
(xxii) Internal Controls and Compliance with the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company, its
subsidiaries and the Company’s Board of Directors (the “Board”) have taken all necessary
actions to ensure that, upon the effectiveness of the Registration Statement, the Company
will be in compliance with all applicable Exchange Rules and all provisions of
▇▇▇▇▇▇▇▇-▇▇▇▇▇ and all rules and regulations promulgated thereunder or implementing the
provisions thereof, in each case, that are then in effect and with which the Company is
required to comply as of the effectiveness of the Registration Statement. The Company
maintains a system of internal controls, including, but not limited to, disclosure controls
and procedures, internal controls over accounting matters and financial reporting, an
internal audit function and legal and regulatory compliance controls (collectively,
“Internal Controls”) that are sufficient to provide reasonable assurances 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 U.S. General Accepted Accounting Principles and to
maintain accountability for assets, (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.
(xxvi) Litigation. Except as disclosed in the General Disclosure Package, there are
no pending actions, suits or proceedings (including any inquiries or investigations by any
court or governmental agency or body, domestic or foreign) against or affecting the
Company, any of its subsidiaries or any of their respective properties that would
individually or in the aggregate be reasonably expected to 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 (including any
inquiries or investigations by any court or governmental agency or body, domestic or
foreign) are, to the Company’s knowledge, threatened or contemplated.
(xxvii) Financial Statements. The statement of financial condition of the Company
included in the Registration Statement, the General Disclosure Package and the Final
Prospectus presents fairly, in all material respects, the financial position of the Company
as of the date indicated, in conformity with U.S. generally accepted accounting principles
(“GAAP”). The consolidated statements of financial condition of FXCM Holdings and its
subsidiaries and the related consolidated statements of operations and comprehensive
income, changes in equity, and cash flows included in the Registration Statement, the
General Disclosure Package and the Final Prospectus present fairly, in all material
respects, the consolidated financial position of FXCM Holdings and its subsidiaries as of
the dates indicated, and the consolidated results of their operations and their cash flows
for the periods therein specified, in conformity with GAAP. The group balance sheets of
ODL Group Limited and the related consolidated profit and loss accounts, consolidated
statements of total recognized gains and losses and consolidated statements of cash flows
included in the Registration Statement, the General Disclosure Package and the Final
Prospectus present fairly, in all material respects, the consolidated financial position of
ODL Group Limited as of the dates indicated and its consolidated results of operations and
consolidated cash flows for the periods therein specified in conformity with accounting
principles generally accepted in the United Kingdom which differ in certain respects from
GAAP. Ernst & Young LLP and McGladrey & ▇▇▇▇▇▇ LLP, which have expressed their opinions
related to FXCM Holdings, LLC and subsidiaries with respect to certain financial statements
filed as part of the Registration Statement and included in the Registration Statement, the
General Disclosure Package and the Final Prospectus are (x) independent public accounting
firms within the meaning of the Act and the Rules and Regulations, (y) registered public
accounting firms (as defined in Section 2(a)(12) of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act) and (z) not in
violation of the auditor independence requirements of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. With respect
to its opinion over ODL Group Limited, Ernst & Young LLP is (a) an independent public
accounting firm and (b) is not in violation of the auditor independence requirements of the
AICPA Code of Professional Conduct.
7
(xxviii) No Material Adverse Change in Business. Except as disclosed in the General
Disclosure Package, since the end of the period covered by the latest audited financial
statements included in the General Disclosure Package (i) there has been no change, nor any
development or event involving a prospective change, in the condition (financial or
otherwise), results of operations, business, properties or prospects of the Company, FXCM
Holdings and its subsidiaries, taken as a whole, that is material and adverse, (ii) except
as disclosed in or contemplated by the General Disclosure Package, there has been no
dividend or distribution of any kind declared, paid or made by the Company on any class of
its capital stock and (iii) except as disclosed in or contemplated by the General
Disclosure Package, there has been no material adverse change in the capital stock of the
Company or the consolidated short-term indebtedness, long-term indebtedness, net current
assets or net assets of the Company, FXCM Holdings and its subsidiaries.
(xxix) Investment Company Act. 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 General Disclosure Package, will not be an “investment company” as defined
in the Investment Company Act of 1940, as amended (the “Investment Company Act”).
(xxx) Anti-bribery. None of the Company, FXCM Holdings nor any of its subsidiaries,
nor any director, officer or employee, nor, to the Company’s knowledge, any agent or
representative of the Company, FXCM Holdings or of any of its subsidiaries, has taken or
will take any unlawful action in furtherance of an offer, payment, promise to pay, or
authorization or approval of the payment or giving of money, property, gifts or anything
else of value, directly or indirectly, to any “government official” (including any officer
or employee of a government or government-owned or controlled entity or of a public
international organization, or any person acting in an official capacity for or on behalf
of any of the foregoing, or any political party or party official or candidate for
political office) to influence official action or secure an improper advantage; and the
Company, FXCM Holdings and its subsidiaries have conducted their businesses in material
compliance with applicable anti-corruption laws and have instituted and maintain and will
continue to maintain policies and procedures designed to promote and achieve compliance
with such laws and with the representation and warranty contained herein.
(xxxi) Anti-money Laundering. The operations of the Company, FXCM Holdings and its
subsidiaries are and, except as described in the General Disclosure Package, have been
conducted at all times in material compliance with the Bank Secrecy Act, as amended by
Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), to the extent
applicable, and the applicable anti-money laundering statutes of jurisdictions where the
Company, FXCM Holdings and its subsidiaries conduct business, and the rules and regulations
thereunder (collectively, the “Anti-Money Laundering Laws”), and no action, suit or
proceeding by or before any court or governmental agency, authority or body or any
arbitrator involving the Company, FXCM Holdings or any of its subsidiaries with respect to
the Anti-Money Laundering Laws is pending or, to the best knowledge of the Company,
threatened.
(xxxii) OFAC. None of the Company, FXCM Holdings nor any of its subsidiaries has in
the past knowingly engaged in or is now knowingly engaged in any dealings or transactions
with any person, or in any country or territory, that at the time of the dealing or
transaction was or is: (a) the target of sanctions administered by the U.S. Department of
Treasury’s Office of Foreign Assets Control, (b) the target
of restrictions set forth in
applicable non-U.S. government sanctions lists, including, but not limited to, the
sanctions lists maintained by the United Nations, by the United Kingdom’s HM Treasury, by
Canada’s Office of the Superintendent of Financial Institutions, and as set forth in
Canada’s Cumulative Warning List, or (c) named on the list of Specially Designated
Nationals and Blocked Persons, or subject to a list issued pursuant to Section 326 of the
USA PATRIOT ACT, as such time as the applicable person was engaged in business with the
Company or an applicable subsidiary or affiliate.
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(xxxiii) Taxes. The Company and its subsidiaries have filed all federal, state,
local and non-U.S. tax returns that are required to be filed or have requested extensions
thereof (except in any case in which the failure so to file would not have a Material
Adverse Effect); and, except as set forth (including, for the avoidance of doubt, through
the establishment of appropriate reserves) in the General Disclosure Package, the Company
and its subsidiaries have paid all taxes (including any assessments, fines or penalties)
required to be paid by them, except for any such taxes, assessments, fines or penalties
currently being contested in good faith or as would not, individually or in the aggregate,
have a Material Adverse Effect.
(xxxiv) Insurance. The Company and its subsidiaries are insured by insurers with
appropriately rated claims paying abilities against such losses and risks as the Company
and FXCM Holdings believe to be adequate for the conduct of their business and as is
customary for companies engaged in similar businesses in similar industries.
(xxxv) Ratings. The Company does not have any rated debt securities by “nationally
recognized statistical rating organization” as such term is defined for purposes of Rule
436(g)(2) or preferred stock outstanding.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the representations,
warranties and agreements and subject to the terms and conditions set forth herein, 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 (rounded up or down, as determined by Credit Suisse Securities (USA) LLC (“Credit
Suisse”) in its discretion, in order to avoid fractions) obtained by multiplying Firm
Securities by a fraction the numerator of which is the number of Firm Securities set forth opposite
the name of such Underwriter in Schedule A hereto and the denominator of which is the total number
of Firm Securities.
The Company will deliver the Firm Securities to or as instructed by Credit Suisse for the
accounts of the several Underwriters in a form reasonably acceptable to Credit Suisse against
payment of the purchase price in Federal (same day) funds by official bank check or checks or wire
transfer to an account at a bank acceptable to Credit Suisse drawn to the order of [•], at the
office of Shearman & Sterling LLP, at [•] A.M., New York time, on [•], or at such other time not
later than seven full business days thereafter as Credit Suisse and the Company determine, such
time being 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 Company shall deliver the Firm Securities through
the facilities of The Depository Trust Company (“DTC”) unless Credit Suisse shall otherwise
instruct.
In addition, upon written notice from Credit Suisse given to the Company from time to time not
more than 30 days subsequent to the date of the Final 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 for the account of
each Underwriter in the same proportion as the number of shares of Firm Securities set forth
opposite such Underwriter’s name bears to the total number of shares of Firm Securities (subject to
adjustment by Credit Suisse 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 Credit Suisse to the
Company.
Each time for the delivery of and payment for the Optional Securities, being 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, being sometimes referred to as a “Closing Date”), shall be
determined by Credit Suisse but shall be not later than five full business days after written
notice of election to purchase Optional
9
Securities is given. The Company will deliver the Optional Securities being purchased on each
Optional Closing Date to or as instructed by Credit Suisse for the accounts of the several
Underwriters in a form reasonably acceptable to Credit Suisse, against payment of the purchase
price therefor in Federal (same day) funds by official bank check or checks or wire transfer to an
account at a bank acceptable to Credit Suisse drawn to the order of [•], at the above office of
Shearman & Sterling LLP. The Company shall deliver the Optional Securities through the facilities
of DTC, unless Credit Suisse shall otherwise instruct.
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 Final Prospectus.
5. Certain Agreements of the Company and FXCM Holdings. The Company and FXCM Holdings agree
with the several Underwriters that:
(a) Additional Filings. Unless filed pursuant to Rule 462(c) as part of the
Additional Registration Statement in accordance with the next sentence, the Company will
file the Final Prospectus, in a form not reasonably objected to by the Representatives,
with the Commission pursuant to and in accordance with subparagraph (1) (or, if applicable
and if not reasonably objected 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 Time of
the Initial Registration Statement. The Company will advise the Representatives promptly
of any such filing pursuant to Rule 424(b) and provide satisfactory evidence to the
Representatives of such timely filing. If 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 the execution and delivery of this Agreement, 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 8:00 A.M., New York time, on the business day following the date
of this Agreement or, if earlier, on or prior to the time the Final Prospectus is finalized
and distributed to any Underwriter, or will make such filing at such later date as shall
have been consented to by the Representatives.
(b) Filing of Amendments: Response to Commission Requests. The Company will promptly
advise the Representatives of any proposal to amend or supplement at any time the Initial
Registration Statement, any Additional Registration Statement or any Statutory Prospectus
and will not effect such amendment or supplementation in a form reasonably objected to by
the Representatives; and the Company will also advise the Representatives promptly of (i)
the effectiveness of any Additional Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement), (ii) any amendment or
supplementation of a Registration Statement or any Statutory Prospectus, (iii) any request
by the Commission or its staff for any amendment to any Registration Statement, for any
supplement to any Statutory Prospectus or for any additional information, (iv) the
institution by the Commission of any stop order proceedings in respect of a Registration
Statement or the threatening of any proceeding for that purpose, and (v) the receipt by the
Company of any notification with respect to the suspension of the qualification of the
Offered Securities in any jurisdiction or the institution or threatening of any proceedings
for such purpose. The Company will use its best efforts to prevent the issuance of any
such stop order or the suspension of any such qualification and, if issued, to obtain as
soon as possible the withdrawal thereof.
(c) Continued Compliance with Securities Laws. If, at any time when a prospectus
relating to the Offered Securities is (or but for the exemption in Rule 172 would be)
required to be delivered under the Act by any Underwriter or dealer, any event occurs as a
result of which the Final 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 Registration Statement or
supplement the Final 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
and furnish, at its own expense, or, at any time nine months or more after the date
10
hereof, at the expense of the Underwriters, to the Underwriters and the dealers and any
other dealers upon request of the Representatives, an amendment or supplement which will
correct such statement or omission or an amendment which will effect such compliance.
Neither the absence of the Representatives’ objection to, nor the Underwriters’ delivery
of, any such amendment or supplement shall constitute a waiver of any of the conditions set
forth in Section 7 hereof.
(d) Rule 158. As soon as practicable, but not later than the Availability Date (as
defined below), the Company will make generally available to its security holders an
earnings statement covering a period of at least 12 months beginning after the Effective
Time of the Initial Registration Statement (or, if later, the Effective Time of the
Additional Registration Statement) which will satisfy the provisions of Section 11(a) of
the Act and Rule 158 under the Act. For the purpose of the preceding sentence,
“Availability Date” means the day after the end of the fourth fiscal quarter following the
fiscal quarter that includes such Effective Time on which the Company is required to file
its Form 10-Q for such fiscal quarter except that, if such fourth fiscal quarter is the
last quarter of the Company’s fiscal year, “Availability Date” means the day after the end
of such fourth fiscal quarter on which the Company is required to file its Form 10-K.
(e) Furnishing of Prospectuses. The Company will furnish at its own expense or, at
any time nine months or more after the date hereof, at the expense of the Underwriters, to
the Representatives copies of each Registration Statement (four of which will be signed and
will include all exhibits), each related Statutory Prospectus, and, so long as a prospectus
relating to the Offered Securities is (or but for the exemption in Rule 172 would be)
required to be delivered under the Act, the Final Prospectus and all amendments and
supplements to such documents, in each case in such quantities as the Representatives
reasonably request. The Final Prospectus shall be so furnished as early as practicable on
the second business day following the execution and delivery of this Agreement. All other
such documents shall be so furnished as soon as available.
(f) Blue Sky Qualifications. The Company will arrange for the qualification of the
Offered Securities for sale under the laws of such states and other jurisdictions as Credit
Suisse designates and will continue such qualifications in effect so long as required for
the distribution; provided that the Company shall not be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or file a general consent
to service of process in any such jurisdiction or take any action that would subject it to
taxation in any such jurisdiction where it is not then so subject.
(g) Payment of Expenses. 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 but not limited to any filing fees and other expenses
(including reasonable fees and disbursements of counsel to the Underwriters) incurred in
connection with qualification of the Offered Securities for sale under the laws of such
jurisdictions as Credit Suisse designates and the preparation and printing of memoranda
relating thereto, costs and expenses related to the review by FINRA of the Offered
Securities (including filing fees and the reasonable fees and expenses of counsel for the
Underwriters relating to such review), costs and expenses relating to investor
presentations or any “road show” in connection with the offering and sale of the Offered
Securities including, without limitation, any travel expenses of the Company’s officers and
employees and any other expenses of the Company including 50% of the expenses associated
with the chartering of airplanes, fees and expenses incident to listing the Offered
Securities on The New York Stock Exchange and other national and foreign exchanges, fees
and expenses in connection with the registration of the Offered Securities under the
Exchange Act, and expenses incurred in distributing preliminary prospectuses and the Final
Prospectus (including any amendments and supplements thereto) to the Underwriters and for
expenses incurred for preparing, printing and distributing any Issuer Free Writing
Prospectuses to investors or prospective investors. Except as provided in this Section
5(g), the Company shall not be responsible for any other expenses.
(h) Use of Proceeds. The Company will use the net proceeds received in connection
with this offering in the manner described in the “Use of Proceeds” section of the General
Disclosure Package and, except as disclosed in the General Disclosure Package, the Company
does not intend to use any
11
of the proceeds from the sale of the Offered Securities hereunder to repay any outstanding
debt owed to any affiliate of any Underwriter.
(i) Absence of Manipulation. The Company and FXCM Holdings will not take, directly or
indirectly, any action designed to or that would constitute or that might reasonably be
expected to cause or result in, unlawful stabilization or manipulation of the price of any
securities of the Company to facilitate the sale or resale of the Offered Securities.
(j) Restriction on Sale of Securities by Company. For the period specified below
(the “Lock-Up Period”), the Company will not, directly or indirectly, take any of the
following actions with respect to its Securities or any securities convertible into or
exchangeable or exercisable for any of its Securities (“Lock-Up Securities”): (i) offer,
sell, issue, contract to sell, pledge or otherwise dispose of Lock-Up Securities, (ii)
offer, sell, issue, contract to sell, contract to purchase or grant any option, right or
warrant to purchase Lock-Up Securities, (iii) enter into any swap, hedge or any other
agreement that transfers, in whole or in part, the economic consequences of ownership of
Lock-Up Securities, (iv) establish or increase a put equivalent position or liquidate or
decrease a call equivalent position in Lock-Up Securities within the meaning of Section 16
of the Exchange Act or (v) file with the Commission a registration statement under the Act
relating to Lock-Up Securities, or publicly disclose the intention to take any such action,
without the prior written consents of the Representatives; provided that, the foregoing
restrictions shall not apply to (i) the Securities to be sold by the Company hereunder,
(ii) shares or other securities issuable pursuant to employee benefit plans, qualified
stock option plans or other employee compensation plans or outstanding convertible or
exchangeable securities existing on the date hereof or as described or contemplated in the
General Disclosure Package or Final Prospectus and (iii) the issuance of securities in
connection with the acquisition of, or a joint venture with, another company if both (A)
each recipient of such securities shall have executed and delivered to the Representatives
an agreement substantially in the form of Exhibit A hereto and (B) the aggregate number of
securities issued in such transactions, taken together, does not exceed 10% of the
aggregate number of Securities outstanding immediately following the offering contemplated
hereby (assuming all Holdings Units then outstanding are redeemed or exchanged for newly
issued Securities on a one-for-one basis). The initial Lock-Up Period will commence on the
date hereof and continue for 180 days after the date hereof or such earlier date that the
Representatives consent to in writing; provided, however, that if (1) during the last 17
days of the initial Lock-Up Period, the Company releases earnings results or material news
or a material event relating to the Company occurs or (2) prior to the expiration of the
initial Lock-Up Period, the Company announces that it will release earnings results during
the 16-day period beginning on the last day of the initial Lock-Up Period, then in each
case the Lock-Up Period will be extended until the expiration of the 18-day period
beginning on the date of release of the earnings results or the occurrence of the materials
news or material event, as applicable, unless the Representatives waive, in writing, such
extension. The Company will provide the Representatives with notice of any announcement
described in clause (2) of the preceding sentence that gives rise to an extension of the
Lock-Up Period.
6. Free Writing Prospectuses. The Company represents and agrees that, unless it obtains the
prior consent of the Representatives, and each Underwriter represents and agrees that, unless it
obtains the prior consent of the Company and the Representatives, it has not made and will not make
any offer relating to the Offered Securities that would constitute an Issuer Free Writing
Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405,
required to be filed with the Commission. Any such free writing prospectus consented to by the
Company and the Representatives is hereinafter referred to as a “Permitted Free Writing
Prospectus.” The Company represents that it has treated and agrees that it will treat each
Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433,
and has complied and will comply with the requirements of Rules 164 and 433 applicable to any
Permitted Free Writing Prospectus, including timely Commission filing where required, legending and
record keeping. The Company represents that is has satisfied and agrees that it will satisfy the
conditions in Rule 433 to avoid a requirement to file with the Commission any electronic road show.
12
7. 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 (i) to the accuracy of the
representations and warranties of the Company and FXCM Holdings herein (as though made on such
Closing Date), (ii) to the accuracy of the statements of Company officers made pursuant to the
provisions hereof, (iii) to the performance, in all material respects, by the Company and FXCM
Holdings of their obligations hereunder and (iv) to the following additional conditions precedent:
(a) Accountants’ Comfort Letters. The Representatives shall have received letters,
dated, respectively, the date hereof and each Closing Date, of Ernst & Young LLP and
McGladrey & ▇▇▇▇▇▇, LLP confirming that they are each a registered public accounting firm
and independent public accountants within the meaning of the Securities Laws and
substantially in form and substance acceptable to the Representatives.
(b) Effectiveness of Registration Statement. 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 Final Prospectus is
finalized and distributed to any Underwriter, or shall have occurred at such later time as
shall have been consented to by the Representatives. The Final 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) No Material Adverse Change. 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 otherwise), results of
operations, business, properties or prospects of the Company, FXCM Holdings and its
subsidiaries taken as a whole which, in the judgment of the Representatives, is material
and adverse and makes it impractical or inadvisable to market the Offered Securities; (ii)
any change in U.S. or international financial, political or economic conditions or currency
exchange rates or exchange controls the effect of which is such as to make it, in the
judgment of the Representatives, impractical to market or to enforce contracts for the sale
of the Offered Securities, whether in the primary market or in respect of dealings in the
secondary market; (iii) any suspension or material limitation of trading in securities
generally on The New York Stock Exchange or the NASDAQ Stock Market, or any setting of
minimum or maximum prices for trading on such exchange; (iv) or any suspension of trading
of any securities of the Company on any exchange or in the over-the-counter market; (v) any
banking moratorium declared by any U.S. federal or New York authorities; (vi) any major
disruption of settlements of securities, payment or clearance services in the United States
or any other country where such securities are listed or (vii) any attack on, outbreak or
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 the Representatives, the effect of any such attack, outbreak, escalation, act,
declaration, calamity or emergency is such as to make it impractical or inadvisable to
market the Offered Securities or to enforce contracts for the sale of the Offered
Securities.
(d) Opinion of Counsel for the Company. The Representatives shall have received (i)
an opinion and 10b-5 letter, each dated such Closing Date, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, counsel for the Company, substantially in the form previously submitted to Shearman &
Sterling LLP, counsel for the Underwriters and (ii) an opinion, dated the Closing Date, of
▇▇▇▇▇ ▇▇▇▇▇▇▇, General Counsel to the Company, substantially in the form previously
submitted to Shearman & Sterling LLP, counsel for the Underwriters.
(e) Opinion of Counsel for Underwriters. The Representatives shall have received from
Shearman & Sterling LLP, counsel for the Underwriters, such opinion or opinions, dated such
Closing Date, with respect to such matters as the Representatives may require, and the
Company
13
shall have furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(f) Officers’ Certificate. The Representatives shall have received a certificate,
dated such Closing Date, of an executive officer of the Company and a principal financial
or accounting officer of the Company in which such officers shall state that: the
representations and warranties of the Company in this Agreement are true and correct; 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 in all material respects;
no stop order suspending the effectiveness of any Registration Statement has been issued
and no proceedings for that purpose have been instituted or, to each such officer’s
knowledge, are contemplated by the Commission; the Additional Registration Statement (if
any) satisfying the requirements of subparagraphs (1) and (3) of Rule 462(b) was timely
filed pursuant to Rule 462(b), including payment of the applicable filing fee in accordance
with Rule 111(a) or (b) of Regulation S-T of the Commission; and, subsequent to the
[respective] date of the most recent financial statements in the General Disclosure
Package, there has been no material adverse change, nor any development or event involving
a prospective material adverse change, in the condition (financial or otherwise), results
of operations, business, properties or prospects of the Company and its subsidiaries taken
as a whole except as set forth in the General Disclosure Package or as described in such
certificate.
(g) Lock-Up Agreements. On or prior to the date hereof, the Representatives shall
have received lockup letters, in the form set forth on Exhibit A hereto, from each of the
executive officers and directors of the Company and each other person included in the list
previously submitted to the Representatives.
(h) Participating Directors’ Certificates. The Representatives shall have received a
certificate, dated the date hereof, from each of the directors of the Company from whom the
Company is purchasing Holdings Units with a portion of the proceeds from the sale of the
Offered Securities, in which such director shall state that the sale of such Holdings Units
by such director is not prompted by any material adverse information concerning the
Company, FXCM Holdings or any of its subsidiaries that is not set forth the General
Disclosure Package.
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.
8. Indemnification and Contribution. (a) Indemnification of Underwriters by Company and
FXCM Holdings. The Company and FXCM Holdings will, jointly and severally, indemnify and hold
harmless each Underwriter, its partners, members, directors, officers, employees, agents,
affiliates and each person, if any, who controls such Underwriter within the meaning of Section 15
of the Act or Section 20 of the Exchange Act (each an “Indemnified Party”), against any and all
losses, claims, damages or liabilities, joint or several, to which such Indemnified Party may
become subject, under the Act, the Exchange Act, other Federal or state statutory law or regulation
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 part of any Registration Statement at any time, any Statutory
Prospectus as of any time, the Final Prospectus or any Issuer Free Writing Prospectus, or arise out
of or are based upon the omission or alleged omission of a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will reimburse each
Indemnified Party for any legal or other expenses reasonably incurred by such Indemnified Party in
connection with investigating or defending against any loss, claim, damage, liability, action,
litigation, investigation or proceeding whatsoever (whether or not such Indemnified Party is a
party thereto), whether threatened or commenced, and in connection with the enforcement of this
provision with respect to any of the above as such expenses are incurred; provided, however, that
the Company and FXCM Holdings 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
14
to the Company and FXCM Holdings 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 (c) below.
(b) Indemnification of Company. Each Underwriter will severally and not jointly indemnify
and hold harmless the Company, FXCM Holdings, each of the Company’s directors (including any person
who, with his or her consent, is named in the Registration Statement as about to become a director
of the Company) and each of the Company’s officers who signs a Registration Statement and each
person, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20
of the Exchange Act (each, an “Underwriter Indemnified Party”) against any losses, claims, damages
or liabilities to which such Underwriter Indemnified Party may become subject, under the Act, the
Exchange Act, or other Federal or state statutory law or regulation 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 at any time, any Statutory Prospectus at any time, the Final Prospectus or
any Issuer Free Writing Prospectus or arise out of or are based upon the omission or the alleged
omission of 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 such Underwriter Indemnified Party in connection with investigating or
defending against any such loss, claim, damage, liability, action, litigation, investigation or
proceeding whatsoever (whether or not such Underwriter Indemnified Party is a party thereto),
whether threatened or commenced, based upon any such untrue statement or omission, or any such
alleged untrue statement or omission 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 Final Prospectus furnished on behalf of each Underwriter: the concession and reallowance
figures appearing in the fourth paragraph under the caption “Underwriting” and the information
contained in the sixth paragraph under the caption “Underwriting” in respect to sales to
discretionary accounts.
(c) Actions against Parties; Notification. Promptly after receipt by an indemnified party
under this Section 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, notify the indemnifying party of the commencement thereof; but the failure to notify the
indemnifying party shall not relieve it from any liability that it may have under subsection (a) or
(b) above 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. 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 thereof, with
counsel 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 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) Contribution. 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
15
relative benefits received by the Company and FXCM Holdings on the one hand and the Underwriters on
the other from the offering of the Securities and the application of the proceeds thereof 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 and FXCM Holdings on the one hand and the
Underwriters on the other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Company and FXCM Holdings 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 and FXCM Holdings (giving effect to the
application of the proceeds 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, FXCM Holdings 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
by which the total price at which the Securities underwritten by it and distributed to the public
were offered 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. The Company, FXCM
Holdings and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in this Section 8(d).
9. Default of Underwriters. If any Underwriter or Underwriters default in their obligations
to purchase Offered Securities hereunder on either the First or any Optional Closing Date and the
aggregate number of shares 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 shares of Offered Securities with respect to
which such default or defaults occur exceeds 10% of the total number of shares 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 (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 person substituted for an Underwriter under this Section. Nothing herein will relieve
a defaulting Underwriter from liability for its default.
10. Survival of Certain Representations and Obligations. The respective indemnities,
agreements, representations, warranties and other statements of FXCM Holdings 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, FXCM Holdings, 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 the purchase of
16
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 9 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, and
the respective obligations of the Company and the Underwriters pursuant to Section 8 hereof shall
remain in effect shall remain in effect. In addition, if any Offered Securities have been
purchased hereunder, the representations and warranties in Section 2 and all obligations under
Section 5 shall also remain in effect. Notwithstanding the foregoing, if this Agreement is
terminated pursuant to (a) Section 9 by reason of the default of one or more Underwriters, the
Company shall not be obligated to reimburse any defaulting Underwriter for its expenses pursuant to
Section 5(g) or (b) clauses (ii), (iii), (v), (vi) or (vii) of Section 7(c), the Company shall not
be obligated to reimburse any Underwriter for its expenses pursuant to Section 5(g).
11. Notices. All communications hereunder will be in writing and, if sent to the
Underwriters, will be mailed, delivered or telegraphed and confirmed to the Representatives at
Credit Suisse Securities (USA) LLC, Eleven Madison Avenue, New York, N.Y. 10010-3629, Attention:
LCD-IBD, ▇.▇. ▇▇▇▇▇▇ Securities LLC, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: Equity
Syndicate Desk, 4th Floor and Citigroup Global Markets Inc. General Counsel (fax no.:
(▇▇▇) ▇▇▇-▇▇▇▇) and confirmed to the General Counsel, Citigroup Global Markets Inc., at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: General Counsel, with a copy to Shearman &
Sterling LLP, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇ III, Esq., or,
if sent to the Company or FXCM Holdings, will be mailed, delivered or telegraphed and confirmed to
it at FXCM Inc., ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇: Chief Financial Officer; provided,
however, that any notice to an Underwriter pursuant to Section 8 will be mailed, delivered or
telegraphed 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 successors and the officers and directors and controlling persons
referred to in Section 7, 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. Absence of Fiduciary Relationship. The Company and FXCM Holdings acknowledge and agree
that:
(a) No Other Relationship. The Representatives have been retained solely to act as
underwriters in connection with the sale of the Offered Securities and that no fiduciary, advisory
or agency relationship between the Company or FXCM Holdings, on the one hand, and the
Representatives, on the other, has been created in respect of any of the transactions contemplated
by this Agreement or the Final Prospectus, irrespective of whether the Representatives have advised
or is advising the Company or FXCM Holdings on other matters;
(b) Arms’ Length Negotiations. The price of the Offered Securities set forth in this
Agreement was established by the Company following discussions and arms-length negotiations with
the Representatives and the Company is capable of evaluating and understanding and understands and
accepts the terms, risks and conditions of the transactions contemplated by this Agreement;
(c) Absence of Obligation to Disclose. The Company and FXCM Holdings have been advised that
the Representatives and their affiliates are engaged in a broad range of transactions which may
involve interests that differ from those of the Company or FXCM Holdings and that the
Representatives have no
17
obligation to disclose such interests and transactions to the Company or FXCM Holdings by
virtue of any fiduciary, advisory or agency relationship; and
(d) Waiver. The Company and FXCM Holdings waive, to the fullest extent permitted by law, any
claims they may have against the Representatives for breach of fiduciary duty or alleged breach of
fiduciary duty and agree that the Representatives shall have no liability (whether direct or
indirect) to the Company or FXCM Holdings in respect of such a fiduciary duty claim or to any
person asserting a fiduciary duty claim on behalf of or in right of the Company, including
stockholders, employees or creditors of the Company.
16. Patriot Act Notice. In accordance with the requirements of the USA Patriot Act (Title
III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain,
verify and record information that identifies their respective clients, including the Company,
which information may include the name and address of their respective clients, as well as other
information that will allow the Underwriters to properly identify their respective clients.
17. Applicable Law. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York.
The Company hereby submits 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. The Company irrevocably and
unconditionally waives any objection to the laying of venue of any suit or proceeding arising out
of or relating to this Agreement or the transactions contemplated hereby in Federal and state
courts in the Borough of Manhattan in the City of New York and irrevocably and unconditionally
waives and agrees not to plead or claim in any such court that any such suit or proceeding in any
such court has been brought in an inconvenient forum.
18
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 among the Company, FXCM Holdings and the several Underwriters in accordance with
its terms.
| Very truly yours, FXCM Inc. |
||||
By |
||||
| [Insert title] | ||||
| FXCM Holdings, LLC |
||||
By |
||||
| [Insert title] | ||||
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written. |
||||
Credit Suisse Securities (USA) LLC |
||||
By: |
||||
| Name: | ||||
| Title: | ||||
▇.▇. ▇▇▇▇▇▇ Securities LLC |
||||
By: |
||||
| Name: | ||||
| Title: | ||||
Citigroup Global Markets Inc. |
||||
By: |
||||
| Name: | ||||
| Title: | ||||
Acting on behalf of themselves and as the Representatives of the several Underwriters. |
||||
19
SCHEDULE A
| Number of | ||||
| Firm Securities | ||||
| Underwriter | to be Purchased | |||
Credit Suisse Securities (USA) LLC |
||||
▇.▇. ▇▇▇▇▇▇ Securities LLC |
||||
Citigroup Global Markets Inc. |
||||
Deutsche Bank Securities Inc. |
||||
Barclays Capital Inc. |
||||
UBS Securities LLC |
||||
Sandler ▇’▇▇▇▇▇ & Partners, L.P. |
||||
Total |
||||
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SCHEDULE B
| 1. | General Use Free Writing Prospectuses (included in the General Disclosure Package) |
“General Use Issuer Free Writing Prospectus” includes each of the following documents:
| 2. | Other Information Included in the General Disclosure Package |
The following information is also included in the General Disclosure Package:
21
EXHIBIT A
[•], 2010
Credit Suisse Securities (USA) LLC
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Citigroup Global Markets Inc.,
As Representatives of the Several Underwriters,
c/o Credit Suisse Securities (USA) LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
▇.▇. ▇▇▇▇▇▇ Securities Inc.
Citigroup Global Markets Inc.,
As Representatives of the Several Underwriters,
c/o Credit Suisse Securities (USA) LLC,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
As an inducement to the Underwriters to execute the Underwriting Agreement, pursuant to which
an offering will be made that is intended to result in the establishment of a public market for the
Class A common stock, par value $0.01 per share (the “Securities”) of FXCM Inc. and any successor
(by merger or otherwise) thereto, (the “Company”), the undersigned hereby agrees that during the
period specified in the following paragraph (the “Lock-Up Period”), the undersigned will not offer,
sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any shares of
Securities or securities convertible into or exchangeable or exercisable for any shares of
Securities (including, for greater clarity, limited liability company interests in FXCM Holdings,
LLC, a Delaware limited liability company, that will be exchangeable on a one-to-one basis for
Securities, subject to customary conversion rate adjustments for stock dividends and
reclassifications), enter into a transaction which would have the same effect, or enter into any
swap, hedge or other arrangement that transfers, in whole or in part, any of the economic
consequences of ownership of the Securities, whether any such aforementioned transaction is to be
settled by delivery of the Securities or such other securities, in cash or otherwise, or publicly
disclose the intention to make any such offer, sale, pledge or disposition, or to enter into any
such transaction, swap, hedge or other arrangement, without, in each case, the prior written
consent of Credit Suisse Securities (USA) LLC, ▇.▇. ▇▇▇▇▇▇ Securities LLC and Citigroup Global
Markets Inc. (collectively, the “Representatives”). In addition, the undersigned agrees that,
without the prior written consent of the Representatives, it will not, during the Lock-Up Period,
make any demand for or exercise any right with respect to, the registration of any Securities or
any security convertible into or exercisable or exchangeable for the Securities.
The initial Lock-Up Period will commence on the date of this Lock-Up Agreement and continue
and include the date 180 days after the public offering date set forth on the final prospectus used
to sell the Securities (the “Public Offering Date”) pursuant to the Underwriting Agreement, to
which you are or expect to become parties, or such earlier date that the Representatives consent to
in writing; provided, however, that if (1) during the last 17 days of the initial Lock-Up Period,
the Company releases earnings results or material news or a material event relating to the Company
occurs or (2) prior to the expiration of the initial Lock-Up Period, the Company announces that it
will release earnings results during the 16-day period beginning on the last day of the initial
Lock-Up Period, then in each case the Lock-Up Period will be extended until the expiration of the
18-day period beginning on the date of release of the earnings results or the occurrence of the
material news or material event, as applicable, unless the Representatives waive, in writing, such
extension.
22
The undersigned hereby acknowledges and agrees that written notice of any extension of the
Lock-Up Period pursuant to the previous paragraph will be delivered by each of the Representatives
to the Company (in accordance with Section 5(j) of the Underwriting Agreement) and that any such
notice properly delivered will be deemed to have been given to, and received by, the undersigned.
The undersigned further agrees that, prior to engaging in any transaction or taking any other
action that is subject to the terms of this Lock-Up Agreement during the period from the date of
this Lock-Up Agreement to and including the 34th day following the expiration of the
initial Lock-Up Period, it will give notice thereof to the Company and will not consummate such
transaction or take any such action unless it has received written confirmation from the Company
that the Lock-Up Period (as may have been extended pursuant to the previous paragraph) has expired.
Notwithstanding the foregoing, the restrictions set forth herein shall not apply to (i)
transactions contemplated by the Underwriting Agreement, (ii) any Securities acquired by the
undersigned in the open market, (iii) the exercise of stock options or other similar awards granted
pursuant to the Company’s equity incentive plans; provided that such restriction shall apply to any
of the undersigned’s Securities issued upon such exercise, (iv) the establishment of any contract,
instruction or plan (a “Plan”) that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B)
under the Securities Exchange Act of 1934 (the “Exchange Act”) provided that no sales of the
undersigned’s Securities shall be made pursuant to such a Plan prior to the expiration of the
Lock-Up Period (as such may have been extended pursuant to the provisions hereof), (v) transfers as
a bona fide gift or gifts or by will or intestacy, (vi) distributions to members, limited partners
or stockholders of the undersigned, (vii) transfers to a member or members of the undersigned’s
immediate family or to a trust, the beneficiaries or which are the undersigned and/or a member or
members of his or her immediate family or (viii) transfers to any corporation, partnership, limited
liability company or other entity that is wholly-owned by the undersigned and/or by a member or
members of his or her immediate family; provided that in the case of any transfer or distribution
pursuant to clause (v), (vi), (vii) or (viii), each transferee or distributee shall execute and
deliver to the Representatives a lock-up letter in the form of this letter. For the purposes of
this Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, no
more remote than first cousin.
In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby
authorized to decline to make any transfer of shares of Securities if such transfer would
constitute a violation or breach of this Agreement.
This Agreement shall be binding on the undersigned and the successors, heirs, personal
representatives and assigns of the undersigned. This Agreement shall lapse and become null and
void if the Public Offering Date shall not have occurred on or before [•], 2011. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of New York.
| Very truly yours, |
||||
| [Name of stockholder] | ||||
23