Document:

Exhibit 10.18

 

UNIT VESTING, EQUITY RETENTION AND
  RESTRICTIVE COVENANT AGREEMENT

 

                          , 2015

 

Douglas A. Cifu          
 Chief Executive Officer
 Virtu Financial, Inc. 
 645 Madison Avenue
 New York, New York 10022-1010

 

Re:  Unit Vesting, Equity Retention and Restrictive Covenant Agreement

 

Dear Mr. Cifu:

 

The undersigned understands that Virtu Financial LLC, a Delaware limited liability company (“Virtu LLC”), proposes to consummate a reorganization in connection with an initial public offering (the “IPO”) of Class A common stock, $0.00001 par value per share (“Class A Common Stock”), of Virtu Financial, Inc., a Delaware corporation (the “Company”).  In connection with the IPO, the Company requires that management employees who hold Pre-IPO Company Securities be subject to certain restrictions regarding the sale and transfer of such Pre-IPO Company Securities and acknowledge and agree to continue to be bound by certain post-termination restrictive covenants, as further described herein.

 

1.                                      Equity Reclassification

 

(a)                                 The undersigned owns (i) limited liability company interests of Virtu Employee Holdco (“Existing Virtu Employee Holdco Interests”), which represent an indirect interest in a number of attributable outstanding limited liability company interests of Virtu LLC (“Existing Virtu LLC Interests”) and (ii) Class B limited liability company interests of East MIP (“East MIP Interests”), which represent an indirect interest in a number of Existing Virtu LLC Interests.  In accordance with the Reorganization Agreement, immediately prior to the date and time the IPO becomes effective, among other things, (x) East MIP will be liquidated, and in connection therewith, holders of East MIP Interests will be distributed additional Existing Virtu Employee Holdco Interests and (y) all outstanding Existing Virtu LLC Interests will be reclassified into non-voting common limited liability company interests of Virtu LLC (“Common Units”) based on a hypothetical liquidation value of Virtu LLC (the “Hypothetical Liquidation Value”) and the IPO price per share of the Class A Common Stock.  In connection with such reclassification, all Existing Virtu Employee Holdco Interests, including those distributed to the holders of East MIP Interests in connection with the liquidation of East MIP, will be reclassified into non-voting common limited liability company interests of Virtu Employee Holdco (“Virtu Employee Holdco Common Units”) representing an indirect interest in a number of attributable Common Units.

 

 

(b)                                 In addition, Virtu Employee Holdco, on behalf of the undersigned, will subscribe for a number of shares of Class C Common Stock equal to the number of Common Units indirectly held by the undersigned in Virtu Employee Holdco.  From and after the IPO, subject to the Lock-Up Restrictions and Transfer Restrictions described below, such Common Units, together with such shares of Class C Common Stock, are distributable to the undersigned and subsequently exchangeable for shares of Class A Common Stock pursuant to the Exchange Agreement.

 

(c)                                  The undersigned acknowledges and agrees that the equity interests set forth on Exhibit A attached hereto (i) represent all of the undersigned’s vested and unvested Existing Virtu Employee Holdco Interests and East MIP Interests and (ii) after giving effect to the transactions described in paragraph 1(a), the undersigned’s Virtu Employee Holdco Common Units will continue to be subject to (x) the time-based vesting terms applicable to such equity interests as in effect immediately prior to the IPO as set forth on Exhibit A attached hereto, (y) the Employee Holdco LLC Agreement, and (z) the Virtu LLC MIP.

 

(d)                                 As soon as reasonably practicable following the IPO, the undersigned will be provided by Virtu LLC with written notice setting forth the portion of the Hypothetical Liquidation Value represented by the undersigned’s indirect interests in attributable Existing Virtu LLC Interests and the resulting number of Virtu Employee Holdco Common Units that he or she then owns after giving effect to the transactions contemplated by the Reorganization Agreement and the IPO.

 

2.                                      Equity Retention

 

(a)                                 Except as otherwise provided herein, the undersigned hereby agrees that, without the prior written consent of the Company, the undersigned will not directly or indirectly Transfer all or any part of his or her Pre-IPO Company Securities or any right or economic interest pertaining thereto, including the right to vote or consent on any matter or to receive or have any economic interest in distributions or advances from the Company or Virtu LLC pursuant thereto (the foregoing restrictions are hereinafter referred to as the “Lock-Up Restrictions”).

 

(b)                                 Notwithstanding anything herein to the contrary, the Lock-Up Restrictions shall cease to apply to the Pre-IPO Company Securities as follows:

 

(i)                                     upon the consummation of the IPO, the undersigned may Transfer up to 15% of his or her Pre-IPO Company Securities pursuant to the Equity Purchase Agreements, to the extent such Pre-IPO Company Securities have vested;

 

(ii)                                  on and after the first (1st) anniversary of the consummation of the IPO, the undersigned may Transfer up to a cumulative 30% of his or her Pre-IPO Company Securities, to the extent such Pre-IPO Company Securities have vested;

 

(iii)                               on and after the second (2nd) anniversary of the consummation of the IPO, the undersigned may Transfer up to a cumulative 45% of his or her Pre-IPO Company Securities, to the extent such Pre-IPO Company Securities have vested;

 

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(iv)                              on and after the third (3rd) anniversary of the consummation of the IPO, the undersigned may Transfer up to a cumulative 60% of his or her Pre-IPO Company Securities, to the extent such Pre-IPO Company Securities have vested;

 

(v)                                 on and after the fourth (4th) anniversary of the consummation of the IPO, the undersigned may Transfer up to a cumulative 75% of his or her Pre-IPO Company Securities, to the extent such Pre-IPO Company Securities have vested;

 

(vi)                              on and after the fifth (5th) anniversary of the consummation of the IPO, the undersigned may Transfer up to a cumulative 90% of his or her Pre-IPO Company Securities, to the extent such Pre-IPO Company Securities have vested; and

 

(vii)                           on and after the sixth (6th) anniversary of the consummation of the IPO, the Lock-Up Restrictions shall no longer apply, and the undersigned may Transfer any or all of his or her remaining Pre-IPO Company Securities, to the extent such Pre-IPO Company Securities have vested.

 

For the purposes of this paragraph 2(b), the percentage of Pre-IPO Company Securities permitted to be Transferred shall be determined based on the total number of shares of Class A Common Stock owned by the undersigned as of the Reorganization Date (including any Pre-IPO Company Securities to be sold thereby pursuant to the Equity Purchase Agreements, but excluding any shares of Class A Common stock underlying awards under the Company MIP made thereto in connection with the IPO (“IPO Grants”)), in each case, determined on an “as-converted” basis based on the number of shares of Class A Common Stock, in the aggregate and without duplication, into which the Pre-IPO Company Securities owned of record thereby (whether vested or unvested) are directly or indirectly convertible or exchangeable; provided that, for the purposes of clause (b)(i) only, such total number of Pre-IPO Company Securities owned by the undersigned shall be determined based on the number of such Pre-IPO Company Securities that would have been owned thereby as of the Reorganization Date assuming the Midpoint Liquidation Value was the Hypothetical Liquidation Value and the IPO price per share of the Class A Common Stock was the IPO Price Range Midpoint.

 

(c)                                  Notwithstanding anything herein to the contrary, the Lock-Up Restrictions shall not apply to (i) shares of Company Common Stock and any securities then convertible into or exchangeable for shares of Company Common Stock acquired (x) in open market transactions after the completion of the IPO or (y) pursuant to awards under the Company MIP (including any IPO Grants), (ii) the establishment of a trading plan pursuant to Rule 10b5-1 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), for the Transfer of shares of Company Common Stock; provided that such plan does not provide for the Transfer of shares of Company Common Stock not otherwise permitted pursuant to clause (b) above, (iii) the granting of a revocable proxy to officers or directors of the Company at the request of the board of directors of the Company (the “Board”) in connection with actions to be taken at annual or special meetings of stockholders or in connection with any action by written consent of the stockholders solicited by the Board (at such times as action by written consent of stockholders is permitted under the certificate of incorporation of the Company), (iv) entering into a voting trust, agreement or arrangement (with or without granting a proxy) solely with the Company and/or its stockholders that (A) is disclosed in writing to the Secretary of the Company, (B) either has a

 

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term not exceeding one (1) year or is terminable by the undersigned at any time and (C) does not involve any payment of cash, securities, property or other consideration to the undersigned other than the mutual promise to vote Pre-IPO Company Securities in a designated manner, (v) entering into a customary voting or support agreement (with or without granting a proxy) in connection with  any merger, consolidation or other business combination of the Company, whether effectuated through one transaction or series of related transactions (including a tender offer followed by a merger in which holders of Class A Common Stock  receive the same consideration per share paid in the tender offer) (a “Business Combination”), (vi) the fact that the spouse of the undersigned possesses or obtains an interest in such holder’s Pre-IPO Company Securities arising solely by reason of the application of the community property laws of any jurisdiction, so long as no other event or circumstance shall exist or have occurred that constitutes a Transfer of such shares of Pre-IPO Company Securities, (vii) any Transfer in connection with, and as contemplated by, the Reorganization Agreement, (viii) any Transfer pursuant to any Business Combination and, to the extent such Business Combination is a Disposition Event (as such term is defined in the certificate of incorporation of the Company), following such Disposition Event (it being understood and agreed that, to the extent such Business Combination is not a Disposition Event, the Lock-Up Restrictions shall continue to apply to any securities into which such Pre-IPO Company Securities are exchanged or converted in such Business Combination).

 

(d)                                 The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s shares of Company Common Stock except in compliance with the foregoing restrictions.

 

(e)                                  For the avoidance of doubt, in addition to the Lock-Up Restrictions, (i) any Transfer of Virtu Employee Holdco Common Units shall be subject to the restrictions on Transfer applicable thereto pursuant to the Virtu Employee Holdco LLC Agreement and (ii) the attributable Common Units in which the undersigned has an indirect ownership interest shall be subject to the restrictions on exchange set forth in the Exchange Agreement (collectively, the “Transfer Restrictions”); provided that, the Lock-Up Restrictions shall not preclude the undersigned from delivering a Transfer Election (as such term is defined in the Virtu Employee Holdco LLC Agreement) in connection with an Exchange (as such term is defined in the Exchange Agreement), so long as such Exchange is not consummated prior to the date the undersigned would be entitled to Transfer the shares of Class A Common Stock issuable in such Exchange in accordance with the Lock-Up Restrictions.

 

3.                                      Restrictive Covenants.  The undersigned hereby acknowledges and agrees that he or she shall continue to be bound by the Virtu Employee Holdco LLC Agreement as a Member thereof, including, for the avoidance of doubt, the restrictive covenants set forth in Section 9.04 thereof, in accordance with the terms and conditions thereof.

 

4.                                      Definitions.

 

(a)                                 “Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person; provided that no holder of Pre-IPO Company Securities nor any Affiliate of such holder shall be deemed to be

 

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an Affiliate of any other holder of Pre-IPO Company Securities or any of its Affiliates solely by virtue of such holder’s Pre-IPO Company Securities.

 

(b)                                 “Applicable Law” means, with respect to any Person, any federal, state or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, order, injunction, judgment, decree, ruling or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority or Regulatory Agency that is binding upon or applicable to such Person or its assets, as amended unless expressly specified otherwise.

 

(c)                                  “Class C Common Stock” means Class C common stock, $0.00001 par value per share, of the Company.

 

(d)                                 “Class D Common Stock” means Class D common stock, $0.00001 par value per share, of the Company.

 

(e)                                  “Company Common Stock” means all classes and series of common stock of the Company, including the Class A Common Stock and Class C Common Stock.

 

(f)                                   “Company MIP” means the Virtu Financial, Inc. 2015 Management Incentive Plan.

 

(g)                                  “Control” (including the terms “controlling” and “controlled”), with respect to the relationship between or among two or more Persons, means the possession, directly or indirectly, of the power to direct or cause the direction of the affairs or management of such subject Person, whether through the ownership of voting securities, as trustee or executor, by contract or otherwise.

 

(h)                                 “East MIP” means Virtu East MIP LLC, a Delaware limited liability company.

 

(i)                                     “Equity Purchase Agreements” means (i) the Purchase Agreement by and among the Company, Virtu LLC and certain other members of Virtu LLC and (ii) the Redemption Agreement by and among Virtu Employee Holdco and certain members thereof, in each case dated on or about the Reorganization Date.

 

(j)                                    “Exchange Agreement” means the Exchange Agreement, dated as of the Reorganization Date, by and among the Company, Virtu LLC and the holders of Common Units and shares of Class C Common Stock and Class D Common Stock from time to time party thereto.

 

(k)                                 “Governmental Authority” means any transnational, domestic or foreign, federal, state or local governmental, regulatory or administrative authority, department, court, agency or official, including any subdivision thereof.

 

(l)                                     “IPO Price Range Midpoint” means the midpoint of the estimated public offering price range for the Class A Common Stock set forth on the cover page of the preliminary prospectus forming a part of the registration statement on Form S-1 filed by the Company with the Securities and Exchange Commission on [    ], 2015.

 

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(m)                             “Midpoint Liquidation Value” means the aggregate equity value of Virtu LLC as of the Reorganization Date implied by the IPO Price Range Midpoint.

 

(n)                                 “Person” means, any individual, firm, corporation, partnership, limited liability company, trust, estate, joint venture, Governmental Authority or other entity.

 

(o)                                 “Pre-IPO Company Securities” means (i) any Virtu Employee Holdco Common Units and (ii) any Common Units or shares of Company Common Stock (x) into which the foregoing are converted or exchanged (including pursuant to an exchange of Common Units, together with shares of Class C Common Stock, for shares of Class A Common Stock pursuant to the Exchange Agreement) or (y) that are distributed in respect of the foregoing.

 

(p)                                 “Registration Rights Agreement” means the Registration Rights Agreement by and among the Company and the stockholders party thereto, dated as of the Reorganization Date.

 

(q)                                 “Regulatory Agency” means the Securities and Exchange Commission, the Financial Industry Regulatory Authority, the Financial Services Authority, any non-U.S. regulatory agency and any other regulatory authority or body (including any state or provincial securities authority and any self-regulatory organization) with jurisdiction over the Company, Virtu LLC or any of Virtu LLC’s subsidiaries.

 

(r)                                    “Reorganization Agreement” means the Reorganization Agreement, dated as of the Reorganization Date, by and among the Company, Virtu LLC, Virtu Employee Holdco, East MIP and the other Persons listed on the signature pages thereto.

 

(s)                                   “Reorganization Date” means the date on which transactions contemplated by the Reorganization Agreement are consummated.

 

(t)                                    “Reorganization Documents” means the Reorganization Agreement, the Virtu LLC Agreement, the Virtu Employee Holdco LLC Agreement, the Tax Receivable Agreement, the Exchange Agreement, the Registration Rights Agreement, the Virtu LLC MIP, and this letter.

 

(u)                                 “Tax Receivable Agreement” means the Tax Receivable Agreement by and among the Company, Virtu Employee Holdco and the other persons listed on the signature pages thereto.

 

(v)                                 “Transfer” means any offer, sale, contract to sell, grant of an option to purchase, short sale, assignment, transfer, exchange, gift, bequest, pledge or other disposition or encumbrance, direct or indirect, in whole or in part, by operation of law or otherwise.  The foregoing restriction is expressly agreed to preclude the relevant person from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the referent securities even if such securities would be disposed of by someone other than such person. Such prohibited hedging or other transactions would include any short sale or any purchase, sale or grant of any right (including any put or call option) with respect to any of the referent securities or with respect to any security that includes, relates to, or derives any significant part of its value from such securities.  The terms “Transferred”, “Transferring”, “Transferor”, “Transferee” and “Transferable” have meanings correlative to the foregoing.

 

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(w)                               “Virtu Employee Holdco” means Virtu Employee Holdco LLC, a Delaware limited liability company and special purpose vehicle through which the members thereof indirectly own Common Units.

 

(x)                                 “Virtu Employee Holdco LLC Agreement” means the Amended and Restated Limited Liability Company Agreement of Virtu Employee Holdco, dated as of the Reorganization Date, in the form attached hereto as Exhibit B.

 

(y)                                 “Virtu LLC Agreement” means the Third Amended and Restated Limited Liability Company Agreement of Virtu LLC, dated as of the Reorganization Date.

 

(z)                                  “Virtu LLC MIP” means the Virtu LLC Management Incentive Plan, as amended.

 

5.                                      Miscellaneous.

 

(a)                                 IPO.  The undersigned understands that the Company is relying upon this letter agreement in proceeding toward consummation of the IPO.  The undersigned further understands that this letter agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns.  This letter agreement shall lapse and become null and void if the IPO shall not have occurred on or before [   ], 2015 or earlier if the Company has provided written notice to the undersigned that it has determined not to pursue the IPO. Whether or not the IPO actually occurs depends on a number of factors, including market conditions.

 

(b)                                 Amendment and Waiver.

 

(i)                                     Any provision of this letter agreement may be amended or waived if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this letter agreement or, in the case of a waiver, by each party against whom the waiver is to be effective.

 

(ii)                                  No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by Applicable Law.

 

(c)                                  Binding Effect; Benefit; Assignment. The provisions of this letter agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.  No provision of this letter agreement is intended to confer any rights, benefits, remedies, obligations or liabilities hereunder upon any Person other than the parties hereto and their respective successors and assigns.  No party may assign, delegate or otherwise transfer any of its rights or obligations under this letter agreement without the consent of each other party hereto, except that the Company may transfer or assign its rights and obligations under this letter agreement, in whole or from time to time in part, to any Person; provided that such transfer or assignment shall not relieve the Company of its obligations hereunder or enlarge, alter or change any obligation of any other party hereto or due to the Company.

 

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(d)                                 Governing Law.  This letter agreement, and all claims or causes of action (whether in contract or tort) that may be based upon, arise out of or relate to this letter agreement, shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules of such state.

 

(e)                                  Jurisdiction.  The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this letter agreement or the transactions contemplated hereby (whether brought by any party or any of its Affiliates or against any party or any of its Affiliates) shall be brought in the Delaware Chancery Court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.  Without limiting the foregoing, the undersigned agrees that service of process on such party as at the address provided on the signature page hereto shall be deemed effective service of process on the undersigned.

 

(f)                                   WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW.

 

(g)                                  Counterparts; Effectiveness. This letter agreement may be signed in any number of counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This letter agreement shall be deemed entered into when each party hereto shall have received a counterpart hereof signed by all of the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other party hereto, this letter agreement shall have no effect and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).

 

(h)                                 Entire Agreement. This letter agreement, the Reorganization Documents and the Company MIP (and any award to the undersigned under any of the foregoing), constitute the entire agreement between the parties with respect to the subject matter of this letter agreement and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter of this letter agreement.

 

(i)                                     Severability. If any term or provision of this letter agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms or provisions of this letter agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party.

 

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(j)                                    Interpretation.  Each and every provision of this letter agreement shall be construed as though both parties participated equally in the drafting of the same, and any rule of construction that a document shall be construed against the drafting party shall not be applicable to this letter agreement.  The words “hereof”, “herein” and “hereunder” and words of like import used in this letter agreement shall refer to this letter agreement as a whole and not to any particular provision of this letter agreement.  The captions herein are included for convenience of reference only and shall be ignored in the construction or interpretation hereof.  Any singular term in this letter agreement shall be deemed to include the plural, and any plural term the singular.  Whenever the words “include”, “includes” or “including” are used in this letter agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import.  “Writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form.  References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder.  References to any agreement or contract are to that agreement or contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.  References to any Person include the successors and permitted assigns of that Person.  References from or through any date mean, unless otherwise specified, from and including or through and including, respectively.  References to “law”, “laws” or to a particular statute or law shall be deemed also to include any Applicable Law.

 

[signature pages follow]

 

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Very truly yours,
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Name)
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
(Address)
    

 

[Signature Page to Unit Vesting, Equity Retention and Restrictive Covenant Agreement]

 

 

	
Acknowledged and Agreed:
    
	
 
    
	
VIRTU FINANCIAL, INC.
    
	
 
    
	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    
	
Title:
    
	
 
    
	
 
    
	
VIRTU FINANCIAL LLC
    
	
 
    
	
 
    
	
By:
    	
 
    	
 
    
	
Name:
    
	
Title:
    

 

[Signature Page to Unit Vesting, Equity Retention and Restrictive Covenant Agreement]

 

 

Exhibit A

 

Existing Equity Interests

 

See attached.

 

 

Exhibit B

 

Virtu Employee Holdco LLC Agreement

 

See attached.Exhibit 10.19

 

PURCHASE AGREEMENT

 

PURCHASE AGREEMENT, dated [·], 2015 (this “Agreement”), by and between SLP III EW Feeder I, L.P., as seller (the “Seller”), and Virtu Financial, Inc., a Delaware corporation, as purchaser (the “Purchaser”).

 

WHEREAS, the Board of Directors of the Purchaser (the “Board”) has determined to effect an underwritten initial public offering (the “IPO”) of the Purchaser’s Class A common stock, par value $0.00001 per share (the “Class A Common Stock”); and

 

WHEREAS, in connection with the consummation of the IPO, the Seller wishes to sell to the Purchaser, and the Purchaser wishes to purchase from the Seller, shares of Class A Common Stock.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and for good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE 1

 

DEFINITIONS

 

1.1                               Definitions.  As used in this Agreement, and unless the context requires a different meaning, the following terms shall have the meanings set forth below:

 

“Closing” means the closing of the purchase of the Purchased Shares.

 

“Commission” means the Securities and Exchange Commission or any similar agency then having jurisdiction to enforce the Securities Act.

 

“Discounted Price” means (i) the IPO Price less (ii) the Per Share Underwriting Discount.

 

“Governmental Authority” means the government of any nation, state, city, locality or other political subdivision of any thereof, any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

“IPO Closing” means the initial closing of the sale of Class A Common Stock in the IPO.

 

“IPO Price” means the per share public offering price for the Class A Common Stock.

 

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment, encumbrance, lien (statutory or other) or other security interest of any kind or nature whatsoever.

 

“Per Share Underwriting Discount” means the underwriting discount per share paid to the underwriters in the IPO.

 

“Person” means any individual, firm, corporation, partnership, limited liability company, trust, incorporated or unincorporated association, joint venture, joint stock company, Governmental Authority or other entity of any kind.

 

“Purchased Shares” means the number of shares of Class A Common Stock under the column entitled “Purchased Shares” on Schedule I hereto.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Commission promulgated thereunder.

 

ARTICLE 2

 

PURCHASE AND SALE OF SHARES

 

2.1                               Purchase and Sale.  Subject to the terms herein set forth, at the Closing (as defined herein), (i) the Seller agrees to sell, convey, assign and transfer to the Purchaser the Purchased Shares, and the Purchaser agrees to purchase the Purchased Shares from the Seller for a purchase price equal to the IPO Price per Purchased Share and (ii) the Seller shall be responsible for the Per Share Underwriting Discount with respect to each Purchased Share.  For administrative convenience, the net amount per Purchased Share paid to the Seller by the Purchaser shall be the Discounted Price.

 

2.2                               Closing.

 

(a)                                 The Closing shall occur at the offices of Paul, Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York, 10019 immediately following the IPO Closing.

 

(b)                                 At the Closing, (i) the Purchaser shall deliver to the Seller the Discounted Price for each Purchased Share being purchased by the Purchaser from the Seller as set forth in Section 2.1, by wire transfer of immediately available funds to a bank account designated in writing by the Seller and (ii) the Seller shall deliver the number of shares of Class A Common Stock included in the Purchased Shares being sold at the Closing in book entry or certificated form, as applicable.

 

2.3                               Conditions to Closing.

 

(a)                                 The obligations of the Purchaser and the Seller to be performed at the Closing shall be conditioned upon the simultaneous or prior completion of the IPO Closing.

 

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(b)                                 The obligations of the Purchaser to be performed at the Closing shall be subject to the condition that the representations and warranties set forth in Article 4 shall be true and correct as of the Closing as if then made.

 

(c)                                  The obligations of the Seller to be performed at the Closing shall be subject to the condition that the representations and warranties of the Purchaser set forth in Article 3 shall be true and correct as of the Closing as if then made.

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES OF THE SELLER

 

The Seller represents, warrants, and agrees as of the date hereof as follows:

 

3.1                               Authority; Execution and Delivery; Enforceability.  The Seller has the full power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery by the Seller of this Agreement and the consummation by the Seller of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Seller and no other proceedings on the part of the Seller are necessary to approve this Agreement and to consummate the transactions contemplated hereby.  The Seller has duly executed and delivered this Agreement and, assuming due execution and delivery by the Purchaser, this Agreement constitutes, or will constitute the legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.

 

3.2                               Title.  The Seller owns beneficially and of record and has full power and authority to convey, free and clear of any Liens, the Class A Common Stock included in the Purchased Shares set forth on Schedule I hereto (subject to any transfer restrictions of general applicability as may be provided under the Securities Act and the “blue sky” laws of the various states of the United States).  Assuming the Purchaser has the requisite power and authority to be the lawful owner of the Class A Common Stock, upon the Seller’s receipt of the applicable purchase price and the transfer of the Purchased Shares at the Closing, good, valid and marketable title to the Class A Common Stock included in the Purchased Shares will pass to the Purchaser, free and clear of any Liens.

 

3.3                               No Conflicts.  Neither the execution nor the delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) result in any breach of or constitute a default under any term of any material agreement, mortgage, indenture, license, permit, lease, or other instrument or (ii) conflict with or result in a violation of any judgment, decree, order, law, or regulation by which the Seller is bound.

 

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ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

 

The Purchaser makes the following representations and warranties for the benefit of the Seller as of the date hereof:

 

4.1                               Organization, Standing and Power.  The Purchaser is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized.

 

4.2                               Authority; Execution and Delivery; Enforceability.  The Purchaser has the full power and authority to execute, deliver and perform this Agreement and to consummate the transactions contemplated hereby.  The execution and delivery by the Purchaser of this Agreement and the consummation by the Purchaser of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Purchaser and no other proceedings on the part of the Purchaser are necessary to approve this Agreement and to consummate the transactions contemplated hereby.  The Purchaser has duly executed and delivered this Agreement, and, assuming due execution and delivery by the Seller, this Agreement constitutes the legal, valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability.

 

4.3                               No Conflicts.  Neither the execution nor the delivery of this Agreement nor the consummation of the transactions contemplated hereby will (i) result in any breach of or constitute a default under any term of any material agreement, mortgage, indenture, license, permit, lease, or other instrument or (ii) conflict with or result in a violation of any judgment, decree, order, law, or regulation by which the Purchaser is bound.

 

ARTICLE 5

 

MISCELLANEOUS

 

5.1                               Notices.  All notices or other communication required or permitted hereunder shall be in writing and shall be delivered personally, telecopied or sent by certified, registered or express mail, postage prepaid.  Any such notice shall be deemed given when so delivered personally, telecopied or sent by certified, registered or express mail, as follows:

 

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(a)                                 If to the Seller, to:

 

SLP III EW Feeder I, L.P.

2775 Sand Hill Road, Suite 100
 Menlo Park, California 94025
 Telephone: (650) 233-8120

Facsimile: (650) 233-8125
 Attention:  Karen King

 

9 West 57th Street, 32nd Floor
 New York, NY 10019
 Telephone: (212) 981-5600
 Facsimile: (212) 981-3535
 Attention: Andrew J. Schader

 

With a copy to (which shall not constitute actual or constructive notice):

 

Simpson Thacher & Barlett LLP
 2475 Hanover Street

Palo Alto, California 94304
 Telephone: (650) 251-5000

Facsimile: (650) 251-5002
 Attention:  Rich Capelouto

Atif I. Azher

 

(b)                                 If to the Purchaser, to:

 

Virtu Financial, Inc.

645 Madison Avenue
 New York, NY 10022-1010
 Telephone:  (212) 418-0100

Facsimile: (212) 418 0100
 Attention:  General Counsel

 

With a copy to (which shall not constitute actual or constructive notice):

 

Paul, Weiss, Rifkind, Wharton & Garrison LLP
 1285 Avenue of the Americas
 New York, NY  10019-6064
 Telephone:  (212) 373-3000
 Facsimile:  (212) 757-3990
 Attention:  John C. Kennedy, Esq.

 

Any party may by notice given in accordance with this Section 5.1 designate another address or person for receipt of notices hereunder.

 

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5.2                               Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of the parties hereto.  No Person other than the parties hereto and their successors and permitted assigns is intended to be a beneficiary of this Agreement.  No party hereto may assign its rights under this Agreement without the prior written consent of the other party hereto.

 

5.3                               Amendment and Waiver.

 

(a)                                 No failure or delay on the part of the Seller or the Purchaser in exercising any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy.  The remedies provided for herein are cumulative and are not exclusive of any remedies that may be available to the Seller or the Purchaser at law, in equity or otherwise.

 

(b)                                 Any amendment, supplement or modification of or to any provision of this Agreement and any waiver of any provision of this Agreement shall be effective only if it is made or given in writing and signed by the Seller and the Purchaser.

 

5.4                               Counterparts.  This Agreement may be executed in any number of counterparts and in separate counterparts, all of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. Facsimile signatures or signatures received as a .pdf attachment to electronic mail shall be treated as original signatures for all purposes of this Agreement.  This Agreement shall become effective when, and only when, each party hereto shall have received a counterpart signed by all of the other parties hereto.

 

5.5                               Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

5.6                               Governing Law.  This agreement shall be governed by and construed in accordance with the laws of the State of Delaware.  The parties hereto agree that any suit, action or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this agreement or the transactions contemplated hereby shall be brought in the Delaware chancery court or, if such court shall not have jurisdiction, any federal court located in the State of Delaware or other Delaware state court, and each of the parties hereby irrevocably consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such suit, action or proceeding and irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.  Process in any such suit, action or proceeding may be served on any party anywhere in the world, whether within or without the jurisdiction of any such court.

 

5.7                               Severability.  If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or

 

6

 

unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or unenforceable shall substantially impair the benefits of the remaining provisions hereof.

 

5.8                               Entire Agreement.  This Agreement, together with the schedules and exhibits hereto, are intended by the parties as a final expression of their agreement and are intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein and therein.  There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein or therein.  This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter.

 

5.9                               Further Assurances.  Each of the parties shall execute such documents and perform such further acts (including, without limitation, obtaining any consents, exemptions, authorizations, or other actions by, or giving any notices to, or making any filings with, any Governmental Authority or any other Person) as may be reasonably required or desirable to carry out or to perform the provisions of this Agreement.

 

[Remainder of page intentionally left blank]

 

7

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered by their respective officers hereunto duly authorized as of the date first above written.

 

 

	
 
    	
SLP   III EW FEEDER I, L.P.
    
	
 
    	
 
    
	
 
    	
By:   Silver Lake Technology Associates III, L.P., its general partner
    
	
 
    	
 
    
	
 
    	
By:   SLTA III (GP), L.L.C., its general partner
    
	
 
    	
 
    
	
 
    	
By:   Silver Lake Group, L.L.C., its sole member
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    
	
 
    	
Title:   Managing Member
    

 

[Signature Page to Purchase Agreement]

 

 

	
 
    	
VIRTU   FINANCIAL, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

[Signature Page to Purchase Agreement]

 

 

Schedule I

 

Purchased Shares

 

	
Purchased
   Shares
    
	
 
    
	
[    ]
    

 

8

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