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Form SC 13D/A KCG Holdings, Inc. Filed by: Serenity Investments, LLC

November 6, 2015 5:17 PM EST

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

SCHEDULE 13D/A

Under the Securities Exchange Act of 1934

(Amendment No. 12)*

 

 

KCG Holdings, Inc.

(Name of Issuer)

Class A Common Stock, par value $0.01 per share

(Title of Class of Securities)

48244B 100

(CUSIP Number)

Stephen G. Schuler

Serenity Investments, LLC

830 North Boulevard

Oak Park, Illinois

(708) 386-0441

with a copy to:

Lindsey A. Smith

Sidley Austin LLP

One South Dearborn Street

Chicago, Illinois 60603

(312) 853-7000

(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)

November 4, 2015

(Date of Event which Requires Filing of this Statement)

 

 

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box.  ¨

 

* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

 

 

 


CUSIP No. 48244B 100  

 

  1.   

Name of Reporting Person:

 

Serenity Investments, LLC

  2.  

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)  ¨        (b)  ¨

 

  3.  

SEC Use Only

 

  4.  

Source of Funds (See Instructions)

 

OO (See Item 3)

  5.  

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)                                                             ¨

 

  6.  

Citizenship or Place of Organization

 

Alaska

Number of

Shares

Beneficially

Owned by

Each

Reporting

Person

With

 

     7.    

Sole Voting Power

 

0

     8.   

Shared Voting Power

 

2,969,031 (1)(2)

     9.   

Sole Dispositive Power

 

0

   10.   

Shared Dispositive Power

 

2,969,031 (1)(2)

11.  

Aggregate Amount Beneficially Owned by Each Reporting Person

 

2,969,031 (1)(2)

12.  

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)                                                       ¨

 

13.  

Percent of Class Represented by Amount in Row (11)

 

3.2%(3)

14.  

Type of Reporting Person (See Instructions)

 

OO

 

(1) Represents 2,969,031 shares of Class A common stock, par value $0.01 per share (“Class A Common Shares”), of KCG Holdings, Inc., a Delaware corporation (“KCG Holdings”), that are issuable upon the exercise of warrants (“Warrant Shares”).
(2) All of the Warrant Shares reported in the table above are held directly by Serenity Investments, LLC, a limited liability company organized under the laws of the state of Alaska (“Serenity”). Stephen G. Schuler and Mary Jo Schuler separately hold equity interests in Serenity that together represent a controlling equity interest in Serenity. Each of Serenity, Stephen G. Schuler and Mary Jo Schuler may be deemed to share voting and dispositive power with respect to these securities. Each of Stephen G. Schuler and Mary Jo Schuler disclaims beneficial ownership of these securities except to the extent of his or her pecuniary interest therein.
(3)

Calculated based on a total of 93,335,822 Class A Common Shares outstanding, which consists of (i) an estimated 90,366,791 Class A Common Shares outstanding as of November 4, 2015, according to information filed

 

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by KCG Holdings on November 6, 2015, plus (ii) 2,969,031 Warrant Shares.

 

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CUSIP No. 48244B 100  

 

  1.   

Name of Reporting Person:

 

Stephen G. Schuler

  2.  

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)  ¨        (b)  ¨

 

  3.  

SEC Use Only

 

  4.  

Source of Funds (See Instructions)

 

OO (See Item 3)

  5.  

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)                                                             ¨

 

  6.  

Citizenship or Place of Organization

 

United States

Number of

Shares

Beneficially

Owned by

Each

Reporting

Person

With

 

     7.    

Sole Voting Power

 

0

     8.   

Shared Voting Power

 

5,250,166 (1)(2)

     9.   

Sole Dispositive Power

 

0

   10.   

Shared Dispositive Power

 

5,250,166 (1)(2)

11.  

Aggregate Amount Beneficially Owned by Each Reporting Person

 

5,250,166 (1)(2)

12.  

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)                                                       ¨

 

13.  

Percent of Class Represented by Amount in Row (11)

 

5.5% (3)

14.  

Type of Reporting Person (See Instructions)

 

IN

 

(1) Represents (i) 2,969,031 Warrant Shares held by Serenity, (ii) 525,138 Class A Common Shares held by the Schuler Family GST Trust dated June 6, 2003 (the “GST Trust”), (iii) 1,743,918 Warrant Shares held by the GST Trust and (iv) 12,079 Class A Common Shares held by Stephen G. Schuler.
(2)

2,969,031 Warrant Shares reported in the table above are held directly by Serenity. Stephen G. Schuler and Mary Jo Schuler separately hold equity interests in Serenity that together represent a controlling equity interest in Serenity. Each of Serenity, Stephen G. Schuler and Mary Jo Schuler may be deemed to share voting and dispositive power with respect to these securities. Each of Stephen G. Schuler and Mary Jo Schuler disclaims beneficial ownership of these securities except to the extent of his or her pecuniary interest therein. Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission by the Reporting Person that he is the beneficial owner of any of such securities for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or for any other purpose.

 

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  525,138 Class A Common Shares and 1,743,918 Warrant Shares reported in the table above are held directly by the GST Trust. Stephen G. Schuler may be deemed, for purposes of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, to share voting and dispositive power with respect to these securities. Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission by the Reporting Person that he is the beneficial owner of any of such securities for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or for any other purpose.
(3) Calculated based on a total of 95,079,740 Class A Common Shares outstanding, which consists of (i) an estimated 90,366,791 Class A Common Shares outstanding as of November 4, 2015, according to information filed by KCG Holdings on November 6, 2015, plus (ii) 4,712,949 Warrant Shares.

 

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CUSIP No. 48244B 100  

 

  1.   

Name of Reporting Person:

 

Mary Jo Schuler

  2.  

Check the Appropriate Box if a Member of a Group (See Instructions)

(a)  ¨        (b)  ¨

 

  3.  

SEC Use Only

 

  4.  

Source of Funds (See Instructions)

 

OO (See Item 3)

  5.  

Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e)                                                             ¨

 

  6.  

Citizenship or Place of Organization

 

United States

Number of

Shares

Beneficially

Owned by

Each

Reporting

Person

With

 

     7.    

Sole Voting Power

 

0

     8.   

Shared Voting Power

 

5,250,166 (1)(2)

     9.   

Sole Dispositive Power

 

0

   10.   

Shared Dispositive Power

 

5,250,166 (1)(2)

11.  

Aggregate Amount Beneficially Owned by Each Reporting Person

 

5,250,166 (1)(2)

12.  

Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions)                                                       ¨

 

13.  

Percent of Class Represented by Amount in Row (11)

 

5.5% (3)

14.  

Type of Reporting Person (See Instructions)

 

IN

 

(1) Represents (i) 2,969,031 Warrant Shares held by Serenity, (ii) 525,138 Class A Common Shares held by the GST Trust, (iii) 1,743,918 Warrant Shares held by the GST Trust and (iv) 12,079 Class A Common Shares held by Stephen G. Schuler, the spouse of Mary Jo Schuler.
(2)

2,969,031 Warrant Shares reported in the table above are held directly by Serenity. Stephen G. Schuler and Mary Jo Schuler separately hold equity interests in Serenity that together represent a controlling equity interest in Serenity. Each of Serenity, Stephen G. Schuler and Mary Jo Schuler may be deemed to share voting and dispositive power with respect to these securities. Each of Stephen G. Schuler and Mary Jo Schuler disclaims beneficial ownership of these securities except to the extent of his or her pecuniary interest therein. Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission by the Reporting Person that she is the beneficial owner of any of such securities for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or for any other purpose.

 

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  525,138 Class A Common Shares and 1,743,918 Warrant Shares reported in the table above are held directly by the GST Trust. Mary Jo Schuler may be deemed, for purposes of Rule 13d-3 under the Securities Exchange Act of 1934, as amended, to share voting and dispositive power with respect to these securities. Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission by the Reporting Person that she is the beneficial owner of any of such securities for purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended, or for any other purpose.
(3) Calculated based on a total of 95,079,740 Class A Common Shares outstanding, which consists of (i) an estimated 90,366,791 Class A Common Shares outstanding as of November 4, 2015, according to information filed by KCG Holdings on November 6, 2015, plus (ii) 4,712,949 Warrant Shares.

 

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Introduction

This Amendment No. 12 (this “Amendment No. 12”) amends Amendment No. 11 dated October 30, 2015 (“Amendment No. 11”), Amendment No. 10 dated June 8, 2015 (“Amendment No. 10”), Amendment No. 9 dated May 29, 2015 (“Amendment No. 9”), Amendment No. 8 dated May 6, 2015 (“Amendment No. 8”), Amendment No. 7 dated February 2, 2015 (“Amendment No. 7”), Amendment No. 6 dated July 15, 2014 (“Amendment No. 6”), Amendment No. 5 dated March 3, 2014 (“Amendment No. 5”), Amendment No. 4 dated February 3, 2014 (“Amendment No. 4”), Amendment No. 3 dated December 31, 2013 (“Amendment No. 3”), Amendment No. 2 dated December 9, 2013 (“Amendment No. 2”) and Amendment No. 1 dated November 1, 2013 (“Amendment No. 1”) to the statement on Schedule 13D dated July 1, 2013 (the “Original Statement” and, together with Amendment No. 1, Amendment No. 2, Amendment No. 3, Amendment No. 4, Amendment No. 5, Amendment No. 6, Amendment No. 7, Amendment No. 8, Amendment No. 9, Amendment No. 10, Amendment No. 11 and this Amendment No. 12, this “Schedule 13D”) relating to the Class A common stock, par value $0.01 per share (the “Class A Common Shares”), of KCG Holdings, Inc., a Delaware corporation (“KCG Holdings”). Except as specifically provided herein, this Amendment No. 12 does not modify any of the information previously reported in the Original Statement. Any capitalized terms used in this Amendment No. 12 and not otherwise defined herein shall have the respective meanings ascribed to such terms in the Original Statement.

This Amendment No. 12 reflects transactions and developments through the date hereof relating to the Reporting Persons’ holdings of Class A Common Shares. In particular, this Amendment No. 12 is being filed to reflect (i) sales made pursuant to the previously-disclosed Rule 10b5-1 Plan dated June 9, 2015 between Serenity and William Blair & Company, L.L.C. (the “Serenity Rule 10b5-1 Plan”) and the previously-disclosed Rule 10b5-1 Plan dated June 9, 2015 between the GST Trust and William Blair & Company, L.L.C. (the “GST Rule 10b5-1 Plan” and, together with the Serenity Rule 10b5-1 Plan, the “Plans”), (ii) the termination of the Serenity Rule 10b5-1 Plan and (iii) the sale of 1,897,593 Class A Common Shares by Serenity in a private transaction with KCG Holdings.

 

Item 1. Security and Issuer.

There has been no change to the information disclosed in Item 1 of the Original Statement.

 

Item 2. Identity and Background.

There has been no change to the information disclosed in Item 2 of the Original Statement.

 

Item 3. Source and Amount of Funds or Other Consideration.

There has been no change to the information disclosed in Item 3 of the Original Statement.

 

Item 4. Purpose of Transaction.

As described in Item 4 of Amendment No. 10, Serenity entered into the Serenity Rule 10b5-1 Plan on June 9, 2015 with respect to 3,260,008 Class A Common Shares and the GST Trust entered into the GST Rule 10b5-1 Plan on June 9, 2015 with respect to 902,176 Class A Common Shares.

Pursuant to a Purchase Agreement, dated as of November 4, 2015 (the “Purchase Agreement”), between KCG Holdings and Serenity, KCG Holdings agreed to purchase in a private transaction, at a price of $12.89 per share, 1,897,593 Class A Common Shares owned by Serenity. In connection therewith, on November 5, 2015, Serenity terminated the Serenity Rule 10b5-1 Plan.

Except as disclosed in Item 4 of this Amendment No. 12, none of the Reporting Persons has any present plans or proposals which relate to or would result in any of the matters set forth in subparagraphs (a)-(j) of Item 4 of Schedule 13D.

 

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Item 5. Interest in Securities of the Issuer.

Item 5 of the Schedule 13D is hereby amended and restated in its entirety as follows:

(a) - (b) With respect to Serenity, Stephen G. Schuler and Mary Jo Schuler, this Schedule 13D relates to the beneficial ownership of 2,969,031 Warrant Shares. Such 2,969,031 shares represent 3.2% of the outstanding Class A Common Shares (based on a total of 93,335,822 Class A Common Shares outstanding, which consists of (i) an estimated 90,366,791 Class A Common Shares outstanding as of November 4, 2015, according to information filed by KCG Holdings on November 6, 2015, plus (ii) 2,969,031 Warrant Shares). All of these Warrant Shares are held by Serenity. Stephen G. Schuler and Mary Jo Schuler separately hold equity interests in Serenity that together represent a controlling equity interest in Serenity. Each of Serenity, Stephen G. Schuler and Mary Jo Schuler may be deemed to share voting and dispositive power with respect to these securities. Each of Stephen G. Schuler and Mary Jo Schuler disclaims beneficial ownership of these securities except to the extent of his or her pecuniary interest therein. Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission by Stephen G. Schuler or Mary Jo Schuler that he or she is the beneficial owner of any of such securities referred to herein for purposes of Section 13(d) of the Exchange Act or for any other purpose.

Solely with respect to Stephen G. Schuler and Mary Jo Schuler, this Schedule 13D also relates to the beneficial ownership of an additional 2,881,135 Class A Common Shares, which include (i) 537,217 Class A Common Shares and (ii) 1,743,918 Warrant Shares. Together with the 2,969,031 shares described in the preceding paragraph, these shares represent 5.5% of the outstanding Class A Common Shares (based on a total of 95,079,740 Class A Common Shares outstanding, which consists of (i) an estimated 90,366,791 Class A Common Shares outstanding as of November 4, 2015, according to information filed by KCG Holdings on November 6, 2015, plus (ii) 4,712,949 Warrant Shares). Of those, 2,269,056 Class A Common Shares and Warrant Shares are held by the GST Trust. Stephen G. Schuler and Mary Jo Schuler may be deemed, for purposes of Rule 13d-3 under the Exchange Act, to share voting and dispositive power with respect to these securities. Stephen G. Schuler and Mary Jo Schuler disclaim beneficial ownership of these securities. Neither the filing of this Schedule 13D nor any of its contents shall be deemed to constitute an admission by Stephen G. Schuler or Mary Jo Schuler that he or she is the beneficial owner of any of such securities for purposes of Section 13(d) of the Exchange Act or for any other purpose.

(c) As described in Item 4 of Amendment No. 10, Serenity entered into the Serenity Rule 10b5-1 Plan on June 9, 2015 with respect to 3,260,008 Class A Common Shares and the GST Trust entered into the GST Rule 10b5-1 Plan on June 9, 2015 with respect to 902,176 Class A Common Shares. From November 2, 2015, the first trading day following the date of Amendment No. 11, through November 4, 2015, an aggregate of (i) 334,027 Class A Common Shares were sold pursuant to the Serenity Rule 10b5-1 Plan as set forth on Annex A and (ii) 92,463 Class A Common Shares were sold pursuant to the GST Rule 10b5-1 Plan as set forth on Annex B. Following these sales, 1,897,593 Class A Common Shares remained available for sale under the Serenity 10b5-1 Plan and 525,138 Class A Common Shares remained available for sale under the GST Trust 10b5-1 Plan.

As disclosed in Item 4 of this Amendment No. 12, on November 4, 2015, KCG Holdings agreed to purchase in a private transaction, at a price of $12.89 per share, 1,897,593 Class A Common Shares owned by Serenity. In connection therewith, on November 5, 2015, Serenity terminated the Serenity Rule 10b5-1 Plan.

No Reporting Person has effected any other transaction in the Class A Common Shares or Warrant Shares since the date of Amendment No. 11.

(d) To the knowledge of the Reporting Persons, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the Class A Common Shares or Warrant Shares covered by this Schedule 13D.

(e) Not applicable.

 

Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer.

See Item 4 of Amendment No. 10 for a description of the GST Trust Rule 10b5-1 Plan and Item 4 of this Amendment No. 12 for a description of the Purchase Agreement, each of which is incorporated herein by reference. No Reporting Person has any other contracts, arrangements, understandings or relationships with respect to any securities of KCG Holdings.

 

9


Item 7. Material to Be Filed as Exhibits.

 

Exhibit
Number

  

Description of Exhibits

99.1    Form of Rule 10b5-1 Plan dated June 9, 2015 between Serenity Investments, LLC and William Blair & Company, L.L.C., incorporated by reference to Exhibit 99.3 to Amendment No. 10
99.2    Form of Rule 10b5-1 Plan dated June 9, 2015 between the Schuler Family GST Trust dated June 6, 2003 and William Blair & Company, L.L.C., incorporated by reference to Exhibit 99.4 to Amendment No. 10
99.3    Purchase Agreement dated November 4, 2015 between KCG Holdings, Inc. and Serenity Investments, LLC

 

10


SIGNATURES

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Date: November 6, 2015   SERENITY INVESTMENTS, LLC
  By:  

/s/ Stephen G. Schuler

  Name: Stephen G. Schuler
  Title: President of its Manager
Date: November 6, 2015  

/s/ Stephen G. Schuler

  STEPHEN G. SCHULER
Date: November 6, 2015  

/s/ Mary Jo Schuler

  MARY JO SCHULER

 

11


INDEX OF EXHIBITS

 

Exhibit

Number

  

Description of Exhibits

99.1    Form of Rule 10b5-1 Plan dated June 9, 2015 between Serenity Investments, LLC and William Blair & Company, L.L.C., incorporated by reference to Exhibit 99.3 to Amendment No. 10
99.2    Form of Rule 10b5-1 Plan dated June 9, 2015 between the Schuler Family GST Trust dated June 6, 2003 and William Blair & Company, L.L.C., incorporated by reference to Exhibit 99.4 to Amendment No. 10
99.3    Purchase Agreement dated November 4, 2015 between KCG Holdings, Inc. and Serenity Investments, LLC

 

12


ANNEX A

Recent Transactions by Serenity in the Class A Common Shares Pursuant to the Serenity Rule 10b5-1 Plan

Set forth below is a summary of open market sales of Class A Common Shares effected pursuant to the Serenity Rule 10b5-1 Plan by Serenity between November 2, 2015, the first trading day following the date of Amendment No. 11, and the date hereof.

 

Date of Transaction

   Number of Class A Common
Shares Sold
   Weighted Average Price Per
Share

     11/2/2015

   274,120    $12.53

     11/3/2015

   10,182    $12.95

     11/4/2015

   49,725    $12.94
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     

 

13


ANNEX B

Recent Transactions by the GST Trust in the Class A Common Shares Pursuant to the GST Rule 10b5-1 Plan

Set forth below is a summary of open market sales of Class A Common Shares effected pursuant to the GST Rule 10b5-1 Plan by the GST Trust between November 2, 2015, the first trading day following the date of Amendment No. 11, and the date hereof.

 

Date of Transaction

   Number of Class A Common
Shares Sold
   Weighted Average Price Per
Share

     11/2/2015

   75,880    $12.53

     11/3/2015

   2,818    $12.95

     11/4/2015

   13,765    $12.94
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     
     

 

14

Exhibit 99.3

PURCHASE AGREEMENT

PURCHASE AGREEMENT, dated as of November 4, 2015 (this “Agreement”), between KCG Holdings, Inc., a Delaware corporation, as purchaser (“Purchaser”), and Serenity Investments, LLC, a limited liability company organized under the laws of the State of Alaska, as seller (“Seller”).

RECITALS:

WHEREAS, Seller is the sole owner and holder of 1,897,593 shares of Class A Common Stock, par value $0.01 per share (“Common Stock”) of Purchaser; and

WHEREAS, Seller desires to sell, and Purchaser desires to purchase, the Securities (as defined below), in each case upon the terms and conditions of this Agreement;

NOW THEREFORE, the parties hereby agree as follows:

AGREEMENT:

Section 1. Purchase and Sale of Securities.

(a) Seller hereby agrees to sell, convey, transfer and deliver to Purchaser, and Purchaser hereby agrees to purchase from Seller, 1,897,593 shares of Common Stock (the “Securities”) for an aggregate purchase price of $24,459,973.77 (the “Purchase Price”).

(b) The closing of the transaction in Section 1(a) (the “Closing”) shall be completed as follows:

(i) As soon as reasonably practicable after the date hereof, Seller shall deliver to Purchaser the certificates evidencing the Securities, duly endorsed for transfer to Purchaser’s order or accompanied by stock powers or other appropriate instruments of transfer duly executed to Purchaser’s order; and

(ii) Simultaneously with the delivery by Seller of the certificates or other instruments representing the Securities, Purchaser shall deliver to Seller the Purchase Price by wire transfer of immediately available funds to an account designated by Seller.

Section 2. Representations and Warranties of Seller. Seller hereby represents and warrants to Purchaser as follows:

(a) Title to Securities. Seller is the legal and record owner of the Securities being sold by it hereunder, and has good title thereto, free and clear of any claim, lien, pledge, option, charge, security interest or encumbrance of any nature whatsoever, including without limitation any agreements restricting the transferability of the Securities but excluding any securities law legend appearing on the Securities (collectively, “Encumbrances”), and will transfer such good title to Purchaser, free and clear of any Encumbrance.

 

-1-


(b) Capacity; Execution and Delivery, Etc. Seller, having full legal capacity to do so, has duly executed and delivered this Agreement and this Agreement constitutes the legal, valid and binding obligation of Seller, enforceable against Seller in accordance with its terms. Neither the execution or delivery of this Agreement by Seller, nor the fulfillment of or compliance with the terms and provisions of this Agreement by Seller, will violate or conflict with the organizational documents of Seller, the terms of any material agreement, instrument, judgment, decree or statute to which Seller is subject or any applicable law.

Section 3. Representations of Purchaser. Purchaser hereby represents and warrants to Seller as follows:

(a) Due Organization. Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware. Purchaser has all requisite power and authority to carry on its business as and where it is now being conducted and to own, lease and operate its properties and assets and is duly qualified and in good standing (to the extent applicable) in each jurisdiction where the ownership or operation of its assets or the conduct of its business requires such qualification.

(b) Capacity; Execution and Delivery, Etc. Purchaser, having full legal capacity to do so, has duly executed and delivered this Agreement and this Agreement constitutes the legal, valid and binding obligation of Purchaser enforceable against Purchaser in accordance with its terms. Neither the execution or delivery of this Agreement by Purchaser, nor the fulfillment of or compliance with the terms and provisions of this Agreement by Purchaser, will violate or conflict with the organizational documents of Purchaser, the terms of any material agreement, instrument, judgment, decree or statute to which Purchaser is subject or any applicable law.

(c) Clean Hands. Purchaser is not prompted to purchase the Securities by any material non-public information concerning Purchaser or any of its subsidiaries not otherwise disclosed to Seller.

Section 4. Termination of 10b5-1 Plan. Notwithstanding anything to the contrary herein, Purchaser and Seller hereby acknowledge that Seller is a party to the Rule 10b5-1 Plan (the “10b5-1 Plan”), entered into as of June 9, 2015, by and between Seller and William Blair & Company, L.L.C. (“William Blair”). Seller hereby agrees to terminate the 10b5-1 Plan and acquire possession of any Securities held by William Blair thereunder within one business day of the date hereof, which shall be prior to the Closing.

Section 5. Miscellaneous.

(a) Expenses. Each party will be liable for its own costs and expenses incurred in connection with the negotiation, preparation, execution or performance of this Agreement.

 

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(b) Assignability. Neither this Agreement nor any right or obligation hereunder shall be assigned, delegated or otherwise transferred (whether voluntarily, by operation of law, by merger, or otherwise) by any party hereto, without the prior written consent of the other party hereto. Any attempted assignment, delegation or transfer in violation of this Section 5(b) shall be void and of no force or effect.

(c) No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

(d) Governing Law; Submission to Jurisdiction. This Agreement and all matters arising in connection with this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of New York without reference to its choice of law provisions. ANY LEGAL SUIT, ACTION OR PROCEEDING ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY MAY BE INSTITUTED IN THE FEDERAL COURTS OF THE UNITED STATES OF AMERICA OR THE COURTS OF THE STATE OF NEW YORK IN EACH CASE LOCATED IN THE STATE OF NEW YORK AND EACH PARTY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN ANY SUCH SUIT, ACTION OR PROCEEDING. SERVICE OF PROCESS, SUMMONS, NOTICE OR OTHER DOCUMENT BY MAIL TO SUCH PARTY’S ADDRESS SET FORTH HEREIN SHALL BE EFFECTIVE SERVICE OF PROCESS FOR ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT. THE PARTIES IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY OBJECTION TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING IN SUCH COURTS AND IRREVOCABLY WAIVE AND AGREE NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

(e) Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LEGAL ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY TO THIS AGREEMENT CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT SEEK TO ENFORCE THE FOREGOING WAIVER IN THE EVENT OF A LEGAL ACTION, (B) SUCH PARTY HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) SUCH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 5(e).

 

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(f) Entire Agreement; Amendments. This Agreement contains the entire understanding of the parties hereto with respect to the subject matter hereof and may be amended only by a written instrument duly signed by each party hereto.

(g) Severability. The invalidity of any term or terms of this Agreement will not affect any other term of this Agreement, which will remain in full force and effect.

(h) Headings. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience only and do not constitute a part of this Agreement.

(i) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all such counterparts will together constitute the same agreement. Executed signature pages to this Agreement may be delivered by facsimile, email or other electronic means and will be deemed as sufficient as if original signature pages had been delivered.

(j) Further Assurances. Each of the parties hereto agrees, at its own cost and expense, to execute and deliver, or to cause to be executed and delivered, all such instruments (including all necessary endorsements) and to take all such action as the other party may reasonably request in order to (i) effectuate the intent and purposes of, and to carry out the terms of, this Agreement, and (ii) further effect the transfer of legal and record ownership of the Securities to Purchaser.

(k) Specific Performance. The parties hereto acknowledge and agree that: (a) monetary damages could not adequately compensate any party hereto in the event of a breach of this Agreement by any other party, which results in the failure of the transactions contemplated by this Agreement to be consummated, (b) the non-breaching party would suffer irreparable harm in the event of such a breach with such an effect and (c) the non-breaching party shall have, in addition to any other rights or remedies it may have at law or in equity, specific performance and injunctive relief as a remedy for the enforcement of this Agreement. The parties agree not to seek, and agree to waive, any requirement for the securing or posting of a bond in connection with a party seeking or obtaining any relief pursuant to this Section 5(k).

(l) No Other Representations. EXCEPT AS EXPRESSLY SET FORTH IN SECTION 2 OR 3 OF THIS AGREEMENT, NO PARTY IS MAKING ANY OTHER REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, TO ANY OTHER PARTY WITH RESPECT TO THE SECURITIES OR PURCHASER.

(m) Notices. All statements, requests and notices delivered hereunder shall be in writing, and if to Purchaser shall be delivered or sent by mail or e-mail transmission to KCG Holdings, Inc., 545 Washington Boulevard, Jersey City, NJ 07310, Attention: John McCarthy, e-mail: [email protected]; and if to Seller shall be delivered or sent by mail or e-mail transmission to Serenity Investments, LLC, 830 North Boulevard, Oak Park, IL 60301, Attention: Stephen Schuler, e-mail: [redacted]; with a copy (which shall not constitute notice) to Sidley Austin LLP, One South Dearborn Street, Chicago, Illinois 60603, Attention: Lindsey Smith, e-mail: [email protected].

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

 

SELLER:
SERENITY INVESTMENTS, LLC

By:

 

/s/ Stephen Schuler

 

Name: Stephen Schuler

 

Title: President of Final Finish, Inc.

  Manager of Serenity Investments, LLC

PURCHASER:
KCG HOLDINGS, INC.
By:  

/s/ John A. McCarthy

  Name: John A. McCarthy
  Title: General Counsel


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