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EXHIBIT 2.4
AMENDMENT TO THE
STOCK PURCHASE AGREEMENT
This AMENDMENT (this "Amendment") is made effective as of March 28,
1996, to the STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of January 17,
1996, by and among Talegen Holdings, Inc., a Delaware corporation ("Seller"),
Affiliated Managers Group, Inc., a Delaware corporation ("AMG"), First Quadrant
Holdings, Inc., a Delaware corporation ("Buyer"), certain managers (the
"Managers") of First Quadrant Corp., a New Jersey corporation (the "Company")
and the management corporations (the "Management Corporations") named therein.
Capitalized terms used herein and not otherwise defined shall have the meanings
set forth in the Agreement.
WHEREAS, Section 12.1 of the Agreement provides that the Agreement may
be amended by a written instrument executed by the parties to the Agreement who
are affected by any such amendment; and
NOW, THEREFORE, the parties hereto agree as follows:
1. Section 7.12(e) shall be amended and restated in its entirety so
that it reads as follows:
(e) Benefit Plans. Prior to the Closing, Seller shall take all
action necessary to assume all liabilities of the Company arising
under, in connection with, or relating to, any Benefit Plan that
provides nonqualified pension or deferred compensation benefits,
including, but not limited to, the SERP and the SIRP, but excluding
liabilities under the Company's Incentive Compensation Plan. Effective
as of the Closing, the Incentive Compensation Plan shall be amended in
accordance with the provisions of Section 8 thereof so that it is in
form and substance acceptable to Buyer. The parties agree and
acknowledge that prior to March 15, 1996, the Company was entitled to
pay all amounts under the Company's Incentive Compensation Plan, as
amended (the "ICP") to which employees became vested on or before
January 2, 1996, and which were payable under the ICP prior to March
15, 1996. With respect to such payments, Buyer agrees that it will not
take any deduction for federal or state income tax purposes. With
respect to all other amounts payable under the ICP ("Post-1995 ICP
Payments"), neither Buyer, including any of its Affiliates (including
the Partnership), nor Seller, including any of its Affiliates, shall
treat for any purpose such amounts as additional consideration paid to
Seller or as other than compensation paid by Buyer or any of its
Affiliates (including the Partnership). Buyer shall also indemnify, on
an after-tax basis, Seller and its Affiliates for any Taxes, along with
any reasonable accountants and attorneys fees, incurred by Seller and
its Affiliates that are attributable to any Post-1995 ICP Payment being
treated as additional consideration paid to Seller ("Additional
Income") if Seller or another member(s) of the affiliated group of
which it is a member is not entitled to receive an offsetting
deduction, either in the same taxable year of Seller (or such other
member) or a subsequent taxable year ("Offsetting
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Deduction"). In addition, if a Post-1995 ICP Payment is treated as
Additional Income paid to Seller in one taxable year but Seller (or
another member or members of its affiliated group) is entitled to
receive an Offsetting Deduction in a subsequent taxable year, Buyer
shall pay to Seller, the Annual Deferral Amount. For each taxable year,
the Annual Deferral Amount shall be calculated as follows: the sum of:
(i) the product of (x) the amount by which the cumulative amount of the
Additional Income exceeds the cumulative amount of the Offsetting
Deduction that has accrued to Seller (or other member(s) of its
affiliated group) for federal income tax purposes in such taxable year
or in a prior taxable year, (y) the highest marginal rate of taxes
payable by a corporation for federal income tax purposes in effect for
such taxable year, and (z) the applicable rate of interest (which may
be a fluctuating rate) under section 6621(a)(2) of the Code, and (ii)
the amount of Taxes that are incurred by Seller as a consequence of
receipt of the Annual Deferral Amount. Any indemnity claims hereunder
shall be subject to the procedures set forth in Section 9.5 but any
dispute regarding the interpretation of the language of this Section
7.12(e) shall be resolved as set forth in Section 11.8.
2. The adjustments related to the Purchase Price pursuant to Sections
2.2(c) and (d) are hereby agreed to result in an increase to the Purchase Price
in the amount of $635,890. Such amount is computed as follows: (a) cash on
December 31, 1995 in excess of the Designated Cash Amount, in accordance with
Section 2.2(c) resulting in an increase to the Purchase Price in the amount of
$891,249; less (b) the product of (i) receivables on December 31, 1995 less than
the Designated Receivables Amount, multiplied by (ii) 40.5%, in accordance with
Section 2.2(d) resulting in a decrease to the Purchase Price in the amount of
$255,359. Furthermore, in consideration of the agreement by the parties in the
amount of this adjustment to the Purchase Price, the parties acknowledge that
there is no disagreement with the computation of this adjustment to the Purchase
Price pursuant to Sections 2.2(c) and (d) and accordingly each waive any and all
rights under Section 2.2(e). The parties further agree that the aggregate effect
of this adjustment to the Purchase Price pursuant to Sections 2.2(c) and (d) in
the amount of $635,890 shall be distributed to Seller from the Company
immediately prior to Closing.
3. The parties agree and acknowledge that the SEC audit of the Company
that was commenced on or about January 16, 1996 (the "SEC Audit") has resulted
in a deficiency letter dated March 26, 1996 (the "SEC Letter"), and that the SEC
Letter imposes a number of obligations on the Company (collectively, the "SEC
Requirements"). The SEC Letter has been reviewed by Seller, Buyer, AMG and the
Managers. The parties hereto agree as follows with regard to the SEC Letter, the
SEC Audit and the SEC Requirements, and hereby amend the Agreement as follows:
(a) Indemnity. Subject to clause (b) below, Seller's obligations and
liabilities under the Agreement (including, without limitation, Article IX
thereof) arising from breaches of representations and warranties with respect to
the matters described in the SEC Letter or that were the subject of the SEC
Requirements shall not be limited in any way by reason of Buyer or AMG having
learned of the SEC Audit, the SEC Letter, the matters described in the
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SEC Letter, the SEC Requirements, or the matters that were the subject of the
SEC Requirements, prior to the Closing. By way of example and not of limitation,
Seller's obligations with respect to Losses arising from Claims asserted by (i)
clients or former clients of the Company and the Partnership (and their
respective successors and assigns), or (ii) any Governmental Authority, with
respect to the SEC Audit, the SEC Letter, the matters described in the SEC
Letter, the SEC Requirements, or the matters that were the subject of the SEC
Requirements, shall not be limited in any way by reason of Buyer or AMG having
learned of the SEC Audit, the SEC Letter, the matters described in the SEC
Letter, the SEC Requirements, or the matters that were the subject of the SEC
Requirements, prior to the Closing. Furthermore, the limitations imposed with
respect to the Buyer Threshold described in Section 9.6 shall not be applicable
to Losses for which indemnity is to be provided by Seller with respect to
breaches of such representations or warranties.
(b) Excluded Losses. Notwithstanding the foregoing or anything else in
the Stock Purchase Agreement, neither Buyer nor AMG shall have any right to (nor
shall they permit any other person or entity controlled by them to) assert or
maintain any claim against Seller on account of Losses incurred on account of
the SEC Audit to date, in responding to the SEC Letter or in complying with the
SEC Requirements as set forth in the SEC Letter. In addition, neither Buyer nor
AMG shall have any right to assert or maintain (nor shall they permit any other
person or entity controlled by them to assert or maintain) any claim against
Seller on account of any Losses (i) attributable or alleged to be attributable
to any Company Clients terminating their investment advisory relationship with
the Company or the Partnership, or (ii) attributable or alleged to be
attributable to any Company withdrawing assets under management, or (iii)
attributable to any Person not becoming a Company Client, in each case on
account of the SEC Audit, the SEC Letter or the SEC Requirements.
(c) Failure to Comply with SEC Requirements. In no event shall Seller
be liable for any Losses occasioned by the failure of the Company, the
Subsidiary or the Partnership to comply with the SEC Requirements as set forth
in the SEC Letter. However, Seller shall remain liable for all other Losses that
would otherwise be indemnifiable under the Agreement and for Losses resulting
from breaches of representations and warranties in the Agreement.
4. This Amendment may be executed in any number of counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. This Amendment shall be construed under and
governed by the internal laws of the State of Delaware, without giving effect to
the choice or conflicts of law provisions thereof. This Amendment shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Amendment as of the date first above written.
TALEGEN HOLDINGS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
FIRST QUADRANT HOLDINGS, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President
AFFILIATED MANAGERS GROUP, INC.,
a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and Chief Executive Officer
Amendment to the Stock Purchase Agreement
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