FIRST AMENDMENT TO ACQUISITION AGREEMENT
FIRST AMENDMENT TO ACQUISITION AGREEMENT, dated as of March 29, 2002
(this "First Amendment"), by and among Xxx Enterprises, Incorporated, a Delaware
corporation ("Purchaser"), Xxxxxx Publications, Inc., a Delaware corporation
("HPI"), Xxxxxx Energy Co., Inc., a Delaware corporation ("HEC"), and those
persons named on last two signature pages attached hereto (the "HPI
Stockholders" and, each individually, an "HPI Stockholder").
W I T N E S S E T H:
WHEREAS, Purchaser, HPI, HEC and the HPI Stockholders have entered
into that certain Acquisition Agreement, dated as of February 11, 2002 (the
"Agreement"), providing for, among other things, the acquisition by Purchaser of
HPI; and
WHEREAS, the parties to the Agreement desire to amend the Agreement in
certain respects in accordance with Section 10.3 thereof.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements set forth herein, the parties hereto agree as follows:
1. Section 1.1(18) of the Agreement is hereby amended by deleting the
words "the Closing Date" and replacing them with the words "March 31, 2002".
2. Section 1.1(101) of the Agreement is hereby amended by inserting
the words "day preceding the" before the words "Closing Date".
3. Section 3.1 of the Agreement is hereby deleted in its entirety and
replaced with the following:
"The consummation of the transactions contemplated hereby shall take
place at a closing (the "Closing") to be held at 12:01 a.m., Pacific
Standard Time ("PST"), on April 1, 2002 (the "Closing Date"), at the
offices of Xxxxx, Xxxxxxxxx & Mines, P.S., Xxx Xxxxxxxxxx Xxxxx, Xxxxx
0000, 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx. For purposes of this
Agreement, the Closing shall be deemed to take place and be fully
completed at 12:01 a.m., PST on the Closing Date."
4. Section 6.9(e) of the Agreement is hereby amended by deleting the
words "on or" in the second sentence.
5. Section 6.9(f) of the Agreement is hereby amended by inserting the
words "on or" before the words "after the Closing Date".
6. Section 6.9(i) of the Agreement is hereby amended by deleting the
words "on or" in the first sentence.
7. Section 6.9(i) of the Agreement is hereby amended by inserting the
words "on or" before the words "after the Closing Date" in each place such words
appear in such section.
8. Section 6.12 of the Agreement is hereby amended by inserting the
words "day preceding the" before the words "Closing Date" in the second
sentence.
9. Section 6.13(a)(i)(A) of the Agreement is hereby deleted in its
entirety and replaced with the following:
"Taxes imposed on any Acquired Company (other than Sioux City) for any
taxable year or period that ends on or before the day preceding the
Closing Date and, with respect to any Straddle Period, the portion of
such Straddle Period ending on the day preceding the Closing Date,"
10. Section 6.13(a)(ii)(A) of the Agreement is hereby deleted in its
entirety and replaced with the following:
"Taxes (other than Taxes imposed as a result of the HPI Redemption)
imposed on any Acquired Company (other than Sioux City) for any
taxable year or period that begins on or after the Closing Date and,
with respect to any Straddle Period, the portion of such Straddle
Period beginning on the Closing Date and"
11. Section 6.13(a)(ii)(B) of the Agreement and the two sentences
immediately following such section are hereby deleted in their entirety and
replaced with the following:
"Excluded Taxes. Except as otherwise provided herein, the Purchaser
shall be entitled to any refund of (or credit for) Taxes for which the
Purchaser is liable under this Agreement. With the express written
consent of the HPI Stockholders Representative, which consent shall be
given or withheld in the HPI Stockholders Representative's sole
discretion, the Purchaser may cause an Acquired Company to elect to
carry back losses from a taxable year or period that begins on or
after the Closing Date to a taxable year or period that ends on or
before the day preceding the Closing Date and the Purchaser shall be
entitled to any actual refund of (or credit for) Taxes that would not
have arisen but for such carryback."
12. Section 6.13(a)(iii) of the Agreement is hereby deleted in its
entirety and replaced with the following:
"For purposes of paragraphs (a)(i) and (a)(ii), whenever it is
necessary to determine the liability for Taxes of any Acquired Company
for a Straddle Period, the determination of the Taxes of the Acquired
Company for the portion of the Straddle Period ending on the day
preceding the Closing Date, and the portion of the Straddle Period
beginning on the Closing Date shall be determined by assuming that the
Straddle Period consisted of two taxable years or periods, one which
ended at the close of the day preceding the Closing Date and the other
which began at the beginning of the Closing Date, and items of income,
gain, deduction, loss or credit of the Acquired Company shall be
allocated between such two taxable years or periods on a "closing of
the books basis" by assuming that the books of the Acquired Company
were closed at the close of the day preceding the Closing Date,
provided, however, that (I) transactions occurring on the Closing Date
shall be allocated (based on, among other relevant factors, factors
set forth in Treas. Reg. ss. 1.1502-76(b)(1)(ii)(B)) to the taxable
year or period that is deemed to begin at the beginning of the day
following the Closing Date (it being understood and agreed that in no
event shall the HPI Redemption be regarded as a transaction described
in this clause (I)), and (II) exemptions, allowances or deductions
that are calculated on an annual basis, such as the deduction for
depreciation, shall be apportioned between such two taxable years or
periods on a daily basis. Notwithstanding the foregoing provisions of
this paragraph (a)(iii), if the transactions contemplated by this
Agreement result in the reassessment of the value of any property
owned by the Acquired Company for property Tax purposes, or the
imposition of any property Taxes at a rate which is different than the
rate that would have been imposed if such transactions had not
occurred, then (y) the portion of such property Taxes for the portion
of the Straddle Period ending on the day preceding the Closing Date
shall be determined on a daily basis, using the assessed value and Tax
rate that would have applied had such transactions not occurred, and
(z) the portion of such property Taxes for the portion of such
Straddle Period beginning on the Closing Date shall be the total
property Taxes for the Straddle Period minus the amount described in
clause (y) of this sentence."
13. Section 6.13(a)(iv)(A) of the Agreement is hereby amended by
deleting the first sentence in its entirety and replacing it with the following:
" If, as a result of any action, suit, investigation, audit, claim,
assessment or amended Tax Return of an Acquired Company for a taxable
year or period on or prior to the day preceding the Closing Date,
there is any change on or after the Closing Date in an item of income,
gain, loss, deduction, credit or amount of Tax that results in an
increase in a Tax liability for which any HPI Indemnitor would
otherwise be liable pursuant to paragraph (a)(i) of this Section 6.13,
and such change results in or will result in a decrease in the Tax
liability of the Purchaser, HPI or any other Acquired Company (or any
Affiliate or successor of any thereof) for any taxable year or period
beginning on or after the Closing Date or for the portion of any
Straddle Period beginning on the Closing Date, no HPI Indemnitor shall
be liable pursuant to such paragraph (a)(i) with respect to such
increase to the extent of such decrease (and, to the extent such
increase in Tax liability is paid to a taxing authority by any HPI
Indemnitor or any Affiliate thereof, the Purchaser shall pay the
relevant HPI Indemnitor an amount equal to the present value of such
decrease)."
14. Section 6.13(a)(iv)(B) of the Agreement is hereby amended by
deleting the first sentence in its entirety and replacing it with the following:
" If, as a result of any action, suit, investigation, audit, claim,
assessment or amended Tax Return of an Acquired Company for a taxable
year or period on or after the Closing Date, there is any change on or
after the Closing Date in an item of income, gain, loss, deduction,
credit or amount of Tax that results in an increase in a Tax liability
for which the Purchaser would otherwise be liable pursuant to
paragraph (a)(ii) of this Section 6.13, and such change results in or
will result in a decrease in the Taxes of HEC or any HPI Stockholder
payable to any Governmental Authority for any taxable year or period
ending on or before the day preceding the Closing Date or for the
portion of any Straddle Period ending on the day preceding the Closing
Date, the Purchaser shall not be liable pursuant to such paragraph
(a)(ii) with respect to such increase to the extent of such actual
decrease (and, to the extent such increase in Tax liability is paid to
a taxing authority by the Purchaser, the HPI Indemnitors shall pay the
Purchaser an amount equal to the present value of such actual
decrease)."
15. Section 6.13(f) of the Agreement is hereby amended by deleting the
second sentence in its entirety and replacing it with the following:
"The HPI Stockholders Representative shall have the sole right to
represent HEC's and each Acquired Company's interests in any Tax audit
or administrative or court proceeding relating to taxable periods
ending on or before the Closing Date or otherwise relating to Taxes
for which any HPI Indemnitor may be liable pursuant to Section 6.13,
and to employ counsel of its choice at its expense. In the case of a
Straddle Period of any Acquired Company (to the extent not described
in the preceding sentence), the HPI Stockholders Representative shall
be entitled to participate at its expense in any Tax audit or
administrative or court proceeding relating (in whole or in part) to
Taxes attributable to the portion of such Straddle Period ending on
the day preceding the Closing Date and, with the written consent of
the Purchaser, and at the HPI Stockholders Representative's sole
expense, may assume the entire control of such audit or proceeding."
16. Section 6.14 of this agreement is hereby amended by inserting the
words "day preceding the" before the words "Closing Date".
17. Section 8.5(d)(2) of this agreement is hereby deleted in its
entirety and replaced with the following:
"to the extent not previously taken into account in computing the
amount of such Loss, all increases in federal, state, local and other
Taxes (including estimated Taxes) payable by the Claimant for all
affected taxable years or periods ending on or before the day
preceding the Closing Date and, with respect to any Straddle Period,
the portion of the Straddle Period ending on the day preceding the
Closing Date as a result of the Indemnified Event, and"
18. Except as expressly set forth herein, this First Amendment shall
not by implication or otherwise alter, modify, amend or in any way affect any of
the terms, conditions, obligations, covenants or agreements contained in the
Agreement, all of which are ratified and affirmed in all respects and shall
continue in full force and effect.
19. This First Amendment may be executed in counterparts, each of
which when so executed and delivered shall be deemed an original and such
counterparts together shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by a duly authorized officer as of the date first above written.
XXX ENTERPRISES, INCORPORATED XXXXXX PUBLICATIONS, INC.
By: /s/ Xxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------- ------------------------------
Xxxx X. Xxxxx Xxxxxxx X. Xxxxxx
Chairman, President and CEO President
XXXXXX ENERGY CO., INC.
By: /s/ Xxxxxx X. Xxxxxx
-------------------------------
Xxxxxx X. Xxxxxx
President
HPI STOCKHOLDERS
/s/ Xxxxx X. Xxxxxx /s/ Xxxxxxxxx Xxx Xxxxxx
----------------------------------- --------------------------------
Xxxxx X. Xxxxxx Xxxxxxxxx Xxx Xxxxxx
/s/ Xxxxxxx X. Xxxxxx /s/ Xxxx Xxxxxxxxx Xxxxxx
----------------------------------- --------------------------------
Xxxxxxx X. Xxxxxx Xxxx Xxxxxxxxx Xxxxxx
/s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx Xxxxxx X. Xxxxxx Trust
/s/ Xxxxxxx X. Xxxxxx
----------------------------------- By: /s/ Xxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx ----------------------------
Trustee
/s/ Xxxx Xxxxxx /s/ Xxxx Xxxxxx, Xx.
----------------------------------- --------------------------------
Xxxx Xxxxxx Xxxx Xxxxxx, Xx.
/s/ C. Xxxxxxx Xxxxxx Xxxx Xxxxxx, Xx.
----------------------------------- --------------------------------
C. Xxxxxxx Xxxxxx Xxxx Xxxxxx, Xx., Trustee fbo
Xxxxxxxx Xxxxxx Xxxxxx
/s/ Xxxx Xxxxx Xxxxxx /s/ Xxxxxxx Xxxxxx Xxxxxx
----------------------------------- --------------------------------
Xxxx Xxxxx Xxxxxx Xxxxxxx Xxxxxx Xxxxxx
/s/ Xxxxxxxxx X. Xxxxxx /s/ Xxxxx Xxxxxx
----------------------------------- --------------------------------
Xxxxxxxxx X. Xxxxxx Xxxxx Xxxxxx
/s/ Xxxxxxxxx Xxxxxx Xxxxxxxxx /s/ Xxxxx Xxxxxx
----------------------------------- --------------------------------
Xxxxxxxxx Xxxxxx Xxxxxxxxx Xxxxx Xxxxxx, Trustee fbo
Alyssa Xxxxxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx Xxxxxx /s/ Xxxxx Xxxxxx
----------------------------------- --------------------------------
Xxxxxx Xxxxxx Xxxxxx Xxxxx Xxxxxx, Trustee fbo
Xxxxx Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx /s/ Xxxxx Xxxxxx
----------------------------------- --------------------------------
Xxxxxx Xxxxxx Xxxxx Xxxxxx, Trustee fbo
Xxxxx Xxxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
-----------------------------------
Xxxxxx Xxxxxx, Trustee fbo
Xxxx Xxxxxxxxx Xxxxxx
/s/ X.X. Xxxxxx /s/ X.X. Xxxxxx
------------------------------------ --------------------------------
X.X. Xxxxxx, Trustee fbo X.X. Xxxxxx, Trustee fbo
Xxxxx Xxxxxx Xxxxxx Alyssa Xxxxxxxxx Xxxxxx
/s/ G.A. Xxxxxxxxx /s/ G.A. Xxxxxxxxx
------------------------------------ --------------------------------
G.A. Xxxxxxxxx, Trustee fbo G.A. Xxxxxxxxx, Trustee fbo
Xxxxx Xxxxxx Xxxxxx Alyssa Xxxxxxxxx Xxxxxx
/s/ X.X. Xxxxxx
------------------------------------ Xxxxxxx X. Xxxxxxxx Irrevocable
X.X. Xxxxxx, Trustee fbo Trust 11/2/95
Xxxxx Xxxxxx Xxxxxx
/s/ G.A. Xxxxxxxxx
------------------------------------ By: /s/ Xxxxxx X. Xxxx
G.A. Xxxxxxxxx, Trustee fbo ----------------------------
Xxxxx Xxxxxx Xxxxxx Xxxxxx X. Xxxx, Trustee
/s/ Xxxxxx X. Xxxxxx
------------------------------------ Xxxxxxx X. Xxxxxxxx Irrevocable
Xxxxxx X. Xxxxxx Trust 11/2/95
/s/ Xxxxxxx X. Xxxxxxxx
------------------------------------ By: /s/ Xxxxxx X. Xxxx
Xxxxxxx X. Xxxxxxxx ----------------------------
Xxxxxx X. Xxxx, Trustee
Xxxxxxxxx X. Xxxxxxxx Revocable Trust Xxxxxx X. Xxxxxxxx Irrevocable
u/a/d 9/20/94 Trust 11/2/95
By /s/ Xxxxxxxxx X. Xxxxxxxx By /s/ Xxxxxx X. Xxxx
---------------------------------- -----------------------------
Trustee Xxxxxx X. Xxxx, Trustee
Xxxxx X. Xxxxxxxx Revocable Trust Xxxxxx Charitable Foundation
u/a/d 9/20/94
By /s/ Xxxxxx X. Xxxxxx
By /s/ Xxxxx X. Xxxxxxxx -----------------------------
----------------------------------- Xxxxxx X. Xxxxxx, President
Trustee
Xxxxxx X. Xxxxxx Trust
Xxxxxx X. Xxxxxx Trust
By /s/ Xxxxxx X. Xxxxxx
By /s/ Xxxxxx X. Xxxxxx -----------------------------
----------------------------------- Trustee
Trustee
