Virtu KCG Holdings LLC - FORM 8-K - EX-10.1

Attached files

file	filename
8-K - FORM 8-K - Virtu KCG Holdings LLC	d411298d8k.htm

Exhibit 10.1

FIRST AMENDMENT TO CREDIT AGREEMENT

This First Amendment to Credit Agreement (the “Amendment”) is entered into as of June 5, 2017 by and among KCG Americas LLC, a Delaware limited liability company (the “Borrower”), KCG Holdings, Inc., a Delaware corporation (the “Parent”), as Guarantor, the several financial institutions party to this Amendment, as Lenders, and BMO Harris Bank N.A., as Administrative Agent (the “Administrative Agent”).

PRELIMINARY STATEMENTS

A. The Borrower, the Parent, the Lenders party thereto and the Administrative Agent entered into a certain Credit Agreement, dated as of June 5, 2015 (the “Credit Agreement”). All capitalized terms used herein without definition shall have the same meanings herein as such terms have in the Credit Agreement.

B. The Borrower has requested that the Lenders make certain amendments to the Credit Agreement, and the Lenders are willing to do so under the terms and conditions set forth in this Amendment.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

SECTION 1. AMENDMENTS.

Subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Credit Agreement shall be and hereby is amended as follows:

1.1. Section 1.1(b)(i) of the Credit Agreement shall be and hereby is amended by deleting the amount “$500,000,000” appearing therein and inserting in its place the amount “$360,000,000”.

1.2. The last sentence appearing in Section 1.13(a)(iv) of the Credit Agreement shall be amended and restated to read in its entirety as follows:

Subject to Section 13.24 hereof, no reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

1.3. Each of the following defined terms in Section 5.1 of the Credit Agreement shall be amended and restated to read in its entirety as follows:

“Applicable Margin” means, a rate per annum equal to:

(i) 1.25% with respect to Revolving A Loans, whether such Revolving A Loans are Base Rate Loans or Eurodollar Loans;

(ii) 2.25% with respect to Revolving B Loans;

(iii) 1.25% with respect to Revolving A Swing Loans;

(iv) 2.25% with respect to Revolving B Swing Loans; and

(v) 0.30% with respect to the commitment fee set forth in Section 2.1 hereof.

“Commitment” means, as to any Lender, the obligation of such Lender to make Revolving Loans and to participate in Swing Loans in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender’s name on Schedule 1 attached hereto and made a part hereof, as the same may be reduced or modified at any time or from time to time pursuant to the terms hereof. The Borrower and the Lenders acknowledge and agree that the Commitments of the Lenders aggregate $260,000,000 as of June 5, 2017.

“Defaulting Lender” means, subject to Section 1.13(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Swing Loans) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent or the Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect

-2-

parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity, or (iii) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 1.13(b)) upon delivery of written notice of such determination to the Borrower, the Swing Line Lender and each Lender.

“Revolving B Sublimit” means $100,000,000.

“Termination Date” means June 4, 2018, or such earlier date on which the Commitments are terminated in whole pursuant to Section 1.11, 9.2 or 9.3 hereof.

1.4. Section 5.1 of the Credit Agreement shall be and hereby is amended by inserting new defined terms in their appropriate alphabetical order, each such new defined term to read as follows:

“Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any liability of an EEA Financial Institution.

“Bail-In Legislation” means, with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule.

“EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.

-3-

“EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.

“EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.

“EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor Person), as in effect from time to time.

“Write-Down and Conversion Powers” means, with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described in the EU Bail-In Legislation Schedule.

1.5. Section 6.6 of the Credit Agreement shall be and hereby is amended by deleting the date “December 31, 2014” appearing therein and inserting in its place the date “December 31, 2016”.

1.6. Section 8.21(c) of the Credit Agreement shall be amended and restated to read in its entirety as follows:

(c) Minimum Excess Net Capital. The Borrower shall, at all times, maintain Excess Net Capital of not less than $100,000,000.

1.7. Section 11.10 of the Credit Agreement shall be amended and restated to read in its entirety as follows:

Section 11.10. Authorization to Release Liens. The Administrative Agent is hereby irrevocably authorized by each of the Lenders and the Administrative Agent (a) to release any Lien covering any Collateral that is sold, transferred, or otherwise disposed of in accordance with the terms and conditions of this Agreement (including a sale, transfer, or disposition permitted by the terms of Section 4.5 or Section 8.10 hereof or which has otherwise been consented to in accordance with Section 13.12 hereof), provided that, if the proceeds from such sale, transfer or disposal (i) take the form of cash or Eligible Securities and (ii) have been identified by the Borrower to be received by it on the same day, the Administrative Agent may release such Lien prior to receipt of such cash proceeds or Eligible Securities, and (b) release Liens on the Collateral following termination or expiration of the Commitments and payment in full in cash of the Obligations

-4-

1.8. Section 13 of the Credit Agreement shall be and hereby is amended by inserting a new Section 13.24 immediately after Section 13.23 to read in its entirety as follows:

Section 13.24. Acknowledgement and Consent to Bail-In of EEA Financial Institutions. Notwithstanding anything to the contrary in any Loan Document or in any other agreement, arrangement or understanding among any such parties, each party hereto (including any party becoming a party hereto by virtue of an Assignment and Assumption) acknowledges that any liability of any EEA Financial Institution arising under any Loan Document, to the extent such liability is unsecured, may be subject to the write-down and conversion powers of an EEA Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:

(a) the application of any Write-Down and Conversion Powers by an EEA Resolution Authority to any such liabilities arising hereunder which may be payable to it by any party hereto that is an EEA Financial Institution; and

(b) the effects of any Bail-in Action on any such liability, including, if applicable:

(i) a reduction in full or in part or cancellation of any such liability;

(ii) a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such EEA Financial Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or

(iii) the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of any EEA Resolution Authority.

1.9. Each of Exhibit D, Exhibit E, Schedule 1, Schedule 5.1, Schedule 6.2, Schedule 6.11 and Schedule 13.11 of the Credit Agreement shall be amended and restated in the form of Exhibit D, Exhibit E, Schedule 5.1, Schedule 6.2, Schedule 6.11 and Schedule 13.11, respectively, attached hereto.

1.10. Notwithstanding anything contained in the Credit Agreement or any Loan Document to the contrary, (a) Bank of America, N.A. shall no longer be acting in its capacity as Syndication Agent, and all references to Bank of America, N.A. in such

-5-

capacity appearing in the Credit Agreement and the other Loan Documents shall be deleted, (b) Merrill Lynch, Pierce, Fenner & Smith Incorporated shall no longer be a Joint Lead Arranger and Joint Book Runner, and all references to Merrill Lynch, Pierce, Fenner & Smith Incorporated appearing in the Credit Agreement and the other Loan Documents shall be deleted, and (c) BMO Capital Markets shall be deemed to be the Sole Lead Arranger and Sole Book Runner.

SECTION 2. CONDITIONS PRECEDENT.

This Amendment shall become effective upon receipt by the Administrative Agent each of the following:

2.1. this Amendment duly executed by the Borrower, the Parent and the Lenders;

2.2. copies of each Loan Party’s articles of formation and operating agreement (or comparable organizational documents) and any amendments thereto, certified in each instance by such Loan Party’s Secretary or Assistant Secretary;

2.3. copies of resolutions of each Loan Party’s Board of Directors, Members or Managers (or similar governing body) authorizing the execution, delivery and performance of this Agreement and the other Loan Documents and the consummation of the transactions contemplated hereby and thereby, together with specimen signatures of the persons authorized to execute such documents on such Loan Party’s behalf, all certified in each instance by its Secretary or Assistant Secretary;

2.4. copies of the certificates of good standing for the Loan Parties (dated no earlier than 30 days prior to the date hereof) from the office of the secretary of the state of its organization and of each state in which such Loan Party is qualified to do business as a foreign corporation or organization;

2.5. financing statement, tax, and judgment lien search results against the Property of the Loan Parties evidencing the absence of Liens on their Property except as permitted by Section 8.8 hereof;

2.6. the written opinion of counsel to the Loan Parties, in form and substance reasonably satisfactory to the Administrative Agent;

2.7. since December 31, 2016, there has been no change in the operation, business, Property or financial condition of the Borrower except those occurring in the ordinary course of business, none of which individually or in the aggregate could reasonably be expected to have a Material Adverse Effect; and

2.8. the Administrative Agent shall have received the fees required to be paid pursuant to that certain fee letter dated May 8, 2017 by and among the Borrower, the Administrative Agent and BMO Capital Markets Corp., in its capacity as a Joint Lead Arranger.

-6-

SECTION 3. REPRESENTATIONS.

In order to induce the Lenders to execute and deliver this Amendment, the Loan Parties hereby represent to the Administrative Agent and the Lenders that as of the date hereof (a) the representations and warranties set forth in Section 6 of the Credit Agreement are and shall be true and correct in all material respects as of the date hereof (except that the representations contained in Section 6.5 shall be deemed to refer to the most recent financial statements of the Loan Parties delivered to the Lenders); provided, that with respect to any representation or warranty that is qualified by materiality or Material Adverse Effect, such representation or warranty shall be true and correct as of the date hereof (except that the representations contained in Section 6.5 shall be deemed to refer to the most recent financial statements of the Loan Parties delivered to the Administrative Agent) and (b) no Default or Event of Default has occurred and is continuing under the Credit Agreement or shall result after giving effect to this Amendment.

SECTION 4. MISCELLANEOUS.

4.1. The Loan Parties hereby acknowledge and agree that, except as otherwise specifically set forth herein, (a) the Liens created and provided for by the Credit Agreement continue to secure the Obligations arising under the Credit Agreement as amended hereby; and (b) the Credit Agreement and the rights and remedies of the Administrative Agent and the Lenders thereunder, the obligations of the Loan Parties thereunder, and the Liens created and provided for thereunder remain in full force and effect and shall not be affected, impaired or discharged hereby. Nothing herein contained shall in any manner affect or impair the priority of the liens and security interests created and provided for by the Credit Agreement as to the indebtedness which would be secured thereby prior to giving effect to this Amendment.

4.2. Except as specifically amended herein, the Credit Agreement, including the Guarantees set forth in Section 12 thereof and the Commitments of the Lenders thereunder, and the other Loan Documents shall continue in full force and effect in accordance with its original terms and are hereby ratified and affirmed. Reference to this specific Amendment need not be made in the Credit Agreement, any Note, any other Loan Document or in any certificate, letter or communication issued or made pursuant to or with respect to the Credit Agreement, any reference in any of such items to the Credit Agreement being sufficient to refer to the Credit Agreement as amended hereby.

4.3. The Loan Parties agree to pay on demand all costs and expenses of or incurred by the Administrative Agent in connection with the negotiation, preparation, execution and delivery of this Amendment as required by Section 13.14 of the Credit Agreement, including the reasonable fees and expenses of counsel for the Administrative Agent.

4.4. This Amendment may be executed in any number of counterparts, and by the different parties on different counterpart signature pages, all of which taken together shall constitute one and the same agreement. Any of the parties hereto may execute this Amendment by signing any such counterpart and each of such counterparts shall for all purposes be deemed to be an original. Delivery of executed counterparts of this Amendment by telecopy shall be

-7-

effective as an original. This Amendment shall be governed by the internal laws of the State of Illinois. This Amendment shall be deemed a Loan Document.

[SIGNATURE PAGE TO FOLLOW]

-8-

This First Amendment to Credit Agreement is entered into as of the date and year first above written.


“BORROWER” KCG AMERICAS LLC

By:	/s/ Jeffrey Krasner
	Name:	Jeffrey Krasner
	Title:	Treasurer


“GUARANTOR” KCG HOLDINGS, INC.

By:	/s/ Steffen Parratt
	Name:	Steffen Parratt
	Title:	Chief Financial Officer