Exhibit 2.2
[EXECUTION VERSION]
AMENDMENT NO. 1 TO THE
ASSET PURCHASE AGREEMENT
AMENDMENT NO. 1 TO THE ASSET PURCHASE AGREEMENT, dated as of December
9, 2004 (this "Amendment No. 1"), by and between Citigroup Financial Products
Inc., a Delaware corporation ("Parent"), on the one hand, and Knight Financial
Products LLC, an Illinois limited liability company ("KFP"), Knight Execution
Partners LLC, a Delaware limited liability company ("KEP" and together with
KFP, "Sellers") and KFP Holdings I LLC, a Delaware limited liability company
("Holdings"), on the other hand. Capitalized terms not defined herein shall
have the meanings set forth in Article I of the Original Agreement (as defined
below).
WITNESSETH:
WHEREAS, Parent, Sellers and Holdings entered into an Asset Purchase
Agreement, dated as of August 8, 2004 (the "Original Agreement"), pursuant to
which Sellers will sell, transfer and convey, and Parent or Purchasers will
purchase and assume, the Acquired Assets and Assumed Liabilities on the terms
and subject to the conditions set forth in the Original Agreement;
WHEREAS, the Parties wish to amend the Original Agreement to provide
that the New York Lease (as defined below) is an Excluded Asset;
WHEREAS, the Parties wish to amend the Original Agreement to provide
that (i) $123,825 in certain leasehold improvements made by Holdings and its
Affiliates to the real property located in Minnetonka, MN are Acquired Assets
and (ii) $54,708 in certain leasehold improvements made to the disaster
recovery facility in Purchase, New York are Excluded Assets and to provide for
an adjustment to the Purchase Price to reflect these amounts;
WHEREAS, the Parties wish to amend the Original Agreement to provide
that the PBX unit situated in KFP's facility in Minnetonka, MN is an Excluded
Asset and that accordingly there will be a reduction in the Purchase Price in
the amount of $75,000 in respect thereof;
WHEREAS, because the Chicago Board of Trade and the Chicago
Mercantile Exchange require memberships on and shares of those exchanges,
which memberships and shares are to be Acquired Assets, to be transferred via
their respective matched sale processes in accordance with their respective
rules and regulations, the Parties wish to amend the Original Agreement to
take into account such matched sale processes; and
WHEREAS, the Parties wish to amend the Original Agreement to reflect
a recent change in the proper citation to an IRS Revenue Procedure.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. New York Lease.
(a) Section 2.1(c) of the Original Agreement is hereby amended by
inserting the phrase "2.2(g)," immediately after the phrase "Sections 2.2(d),".
(b) Section 2.2(f) of the Original Agreement is hereby amended by
deleting the word "and".
(c) Section 2.2(g) of the Original Agreement is hereby deleted in
its entirety and replaced with the following:
(g) the Real Property Lease for the property located at 000
Xxxxxxxx xx Xxx Xxxx, Xxx Xxxx listed as item (2) on Schedule
3.13(b) (the "New York Lease") and all leasehold interests in
the real property covered by the New York Lease; and
(d) Section 2.4(d) of the Original Agreement is hereby amended by
inserting the phrase "or Section 2.2(g)" immediately after the phrase "Section
2.2(d)".
(e) Section 5.18 of the Original Agreement is hereby amended by
inserting the phrase "except the New York Lease, which is an Excluded Asset
under this Agreement," immediately following the phrase "on Schedule 3.13(b),".
2. Leasehold Improvements and PBX Unit.
(a) Section 1.1 of the Original Agreement is hereby amended by
inserting the following definitions in the alphabetically correct order:
"Closing Date Adjustment Amount" shall mean $5,883.
"Minnetonka Leasehold Improvements" shall mean those certain
leasehold improvements made by Holdings and its Affiliates to
the real property located in Minnetonka, MN.
"PBX Unit" shall mean the PBX unit situated in KFP's facility
in Minnetonka, MN.
"Purchase Leasehold Improvements" shall mean those certain
leasehold improvements made to the disaster recovery facility
in Purchase, New York.
(b) Section 2.1(e) of the Original Agreement is hereby amended by
inserting the phrase "and the Minnetonka Leasehold Improvements" immediately
prior to the semicolon.
(c) Section 2.2(h) of the Original Agreement is hereby amended by
inserting the phrase ", the Purchase Leasehold Improvements and the PBX Unit"
immediately after the phrase "Schedule 2.2(h)".
(d) The last sentence of Section 2.5 of the Original Agreement is
hereby amended by inserting the following phase "minus (iii) the Closing Date
Adjustment Amount" immediately following the phrase "Benchmark Book Value".
(e) Section 2.5 of the Original Agreement is hereby amended by
inserting the following as the last sentence immediately following the clause
contemplated by Section 3(b) hereof:
Notwithstanding anything to the contrary herein, for purposes of
determining the Benchmark Book Value, the Parties acknowledge
and agree that (i) the PBX Unit, although it is an Excluded
Asset, shall be deemed to be an Acquired Asset with a value of
zero dollars ($0) as if it appears on the Benchmark Balance
Sheet, (ii) the Purchase Leasehold Improvements, although they
are Excluded Assets, shall be deemed to be Acquired Assets with
a value of $54,708 as if they appear on the Benchmark Balance
Sheet, and (iii) the Minnetonka Leasehold Improvements, although
they are Acquired Assets, shall not be deemed to be Acquired
Assets for purposes of the Benchmark Balance Sheet.
(f) A new Section 2.8(d) is added to the Original Agreement as
follows:
Notwithstanding anything to the contrary herein, for purposes of
determining Book Value and Final Book Value, the Parties
acknowledge and agree that (i) the PBX Unit, although it is an
Excluded Asset, shall be deemed to be an Acquired Asset with a
value of zero dollars ($0) as if it appears on the Preliminary
Closing Date Balance Sheet and the Final Closing Date Balance
Sheet, (ii) the Purchase Leasehold Improvements, although they
are Excluded Assets, shall be deemed to be Acquired Assets with
a value of $54,708 as if they appear on the Preliminary Closing
Date Balance Sheet and the Final Closing Date Balance Sheet and
(iii) the Minnetonka Leasehold Improvements, although they are
Acquired Assets, shall not be deemed to be Acquired Assets for
purposes of the Preliminary Closing Date Balance Sheet or the
Final Closing Date Balance Sheet.
3. CBOT and CME Matched Sale Processes.
(a) Section 1.1 of the Original Agreement is hereby amended by
inserting the following definitions in the alphabetically correct order:
"Final CME Matched Sale Amounts" shall mean the Matched Sale
Amounts applicable to the Matched Sale Assets on the Chicago
Mercantile Exchange ("CME"); provided, however, that if the
applicable Matched Sale Amounts as determined on the Closing
Date are not within the bid price and the offer price at 4:30
p.m. New York time on the Closing Date, the Final CME Matched
Sale Amounts for the applicable Matched Sale Assets shall be
equal to the average of the bid price and the offer price as
posted on the CME's website at 4:30 p.m. New York time on the
Closing Date, rounded to the nearest $500, or as otherwise
required and accepted by the CME.
"Matched Pass-Through Amounts" shall mean the actual cash
amounts that each Matched Sale Exchange pays to the Sellers in
respect of the Matched Sale Assets within thirty-five (35) days
of Closing in the case of the Chicago Board of Trade ("CBOT")
and sixty-six (66) days of Closing in the case of the CME.
"Matched Sale Amounts" shall mean the amounts that each
Matched Sale Exchange requires to be paid to such exchange via
a matched sale process for the transfer of the Matched Sale
Assets with respect to such Matched Sale Exchange; provided,
that the Matched Sale Amount for each Matched Sale Asset shall
be equal to the average of the bid price and the ask (on the
CBOT) or offer (on the CME) price as posted on the website of
the applicable Matched Sale Exchange at 9:00 a.m. New York
time on the Closing Date, rounded to the nearest $500.
"Matched Sale Assets" shall mean those memberships on and
shares of a Matched Sale Exchange that are Acquired Assets.
"Matched Sale Exchanges" shall mean the CBOT and the CME, which
exchanges require the transfer of memberships and shares on
those exchanges to occur via their respective matched sale
processes, as specified in the rules and regulations of each
such exchange.
(b) The last sentence of Section 2.5 of the Original Agreement is
hereby amended by inserting the following phrase immediately prior to the
period:
; provided, that with respect to that portion of the Purchase
Price equal to the Matched Sale Amounts, (i) the Purchaser
shall not pay such Matched Sale Amounts directly to the
Sellers but instead shall (A) at the Closing pay the
applicable Matched Sale Amounts to the CBOT in accordance with
the applicable rules and regulations of the CBOT for the
transfer of the applicable Matched Sale Assets and (B) on the
first Business Day after the Closing Date pay the Final CME
Matched Sale Amounts to the CME in accordance with the
applicable rules and regulations of the CME for the transfer
of the applicable Matched Sale Assets and (ii) the delivery of
such Matched Sale Amounts or Final CME Matched Sale Amounts to
the applicable Matched Sale Exchanges shall, subject to
Sections 2.7(e) and 2.11, constitute, for all purposes hereof,
payment in full by Parent or Purchasers to the Sellers of the
Matched Sale Amounts.
(c) Section 2.7(a)(i) of the Original Agreement is hereby amended
in its entirety to read as follows:
(i) an amount equal to the difference of the Purchase Price
minus the Matched Sale Amounts, by wire transfer of
immediately available funds to the accounts designated by
Sellers at least three Business Days prior to the Closing
Date;
(d) Section 2.7 of the Original Agreement is hereby amended by
adding new subsections (c), (d) and (e) after subsection (b) as follows:
(c) At the Closing, Parent shall, or shall cause Purchasers
to, deliver to the CBOT the applicable Matched Sale Amounts in
accordance with the rules and regulations of the CBOT
applicable to transferring the Matched Sale Assets on the
CBOT.
(d) On the first Business Day after the Closing Date, Parent
shall, or shall cause Purchasers to, deliver to the CME the
Final CME Matched Sale Amounts in accordance with the rules
and regulations of the CME applicable to transferring the
Matched Sale Assets on the CME.
(e) If the Final CME Matched Sale Amounts are greater than the
Matched Sale Amounts applicable to the Matched Sale Assets on
the CME, Sellers shall pay to Parent (or if designated by
Parent, Purchasers) the amount of such difference by wire
transfer of immediately available funds within two Business
Days following the Closing Date. If the Final CME Matched Sale
Amounts are less than the Matched Sale Amounts applicable to
the Matched Sale Assets on the CME, Parent shall, or shall
cause Purchaser to, pay to Sellers the amount of such
difference by wire transfer of immediately available funds
within two Business Days following the Closing Date.
(f) A new Section 2.11 is added to the Original Agreement as
follows:
2.11 Matched Sale Amounts.
(a) (i) If the CME does not pay in cash to the Sellers the
entire Final CME Matched Sale Amounts paid to the CME on the
first Business Day after the Closing Date within sixty-six
(66) days of Closing, then Parent shall, or shall cause
Purchasers to, pay an amount equal to the difference of the
Final CME Matched Sale Amounts paid to the CME on the first
Business Day after the Closing Date minus the relevant Matched
Pass-Through Amounts, by wire transfer of immediately
available funds to the accounts designated by Sellers within
two (2) Business Days of such 66th day.
(ii) If the CME subsequently pays in cash any amounts to the
Sellers in respect of the Matched Sale Assets, which amounts
were previously paid by Parent or the Purchasers to the
Sellers pursuant to Section 2.11(a)(i), the Sellers shall
reimburse such amounts to Parent (up to a maximum of the
amount paid under Section 2.11(a)(i)) within two (2) Business
Days after receipt of such payment.
(b) (i) If the CBOT does not pay in cash to the Sellers the
entire Matched Sale Amounts paid to the CBOT at the Closing
within thirty-five (35) days of Closing, then Parent shall, or
shall cause Purchasers to, pay an amount equal to the
difference of the Matched Sale Amounts paid to the CBOT at the
Closing minus the relevant Matched Pass-Through Amounts, by
wire transfer of immediately available funds to the accounts
designated by Sellers within two (2) Business Days of such
35th day.
(ii) If the CBOT subsequently pays in cash any amounts to the
Sellers in respect of the Matched Sale Assets, which amounts
were previously paid by Parent or the Purchasers to the
Sellers pursuant to Section 2.11(b)(i), the Sellers shall
reimburse such amounts to Parent (up to a maximum of the
amount paid under Section 2.11(b)(ii)) within two (2) Business
Days after receipt of such payment.
(c) The Parties will cooperate reasonably and in good faith
with one another (at the sole expense of Parent) in efforts to
resolve any claim or claims made by third parties (including
the Matched Sale Exchanges themselves) against the Matched
Sale Amounts; provided, that the foregoing shall not require
any Party to make a payment to any such third party in respect
thereof.
(f) A new Section 8.9 is added to the Original Agreement as follows:
Payments relating to any Matched Sale Amounts, Final CME
Matched Sale Amounts or Matched Pass-Through Amounts pursuant
to Article II shall be without prejudice to the rights and
obligations of the Parties contained in this Article VIII.
4. Certain Employee Benefits Matters.
Section 5.8(l) is hereby amended by replacing the phrase "in
Section 4 of IRS Revenue Procedure 96-60, 1996-2 Cum. Bull. 399" with the
phrase "in Section 4 of IRS Revenue Procedure 2004-53, 2004-34 I.R.B. 320."
5. General Provisions.
(a) This Amendment No. 1 shall be governed by, and construed in
accordance with, the laws of the State of New York, without reference to
principles of conflicts of laws.
(b) This Amendment No. 1 may be executed in two or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
[Signature page follows]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.
1 to the Asset Purchase Agreement to be executed as of the date first written
above.
CITIGROUP FINANCIAL PRODUCTS INC.
By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Managing Director
KNIGHT FINANCIAL PRODUCTS LLC
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Director, Corporate Counsel
and Assistant Secretary
KNIGHT EXECUTION PARTNERS LLC
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Director, Corporate Counsel
and Assistant Secretary
KFP HOLDINGS I LLC
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Director, Corporate Counsel
and Assistant Secretary
