Exhibit 3
J2 COMMUNICATIONS
SERIES B CONVERTIBLE PREFERRED STOCK
AND
WARRANTS TO PURCHASE COMMON STOCK
FIRST AMENDMENT TO
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
MAY 17, 2002
FIRST AMENDMENT TO
PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT (this
"AMENDMENT"), dated as of May 17, 2002, is entered into by and among J2
COMMUNICATIONS, a California corporation (the "COMPANY"), National Lampoon
Acquisition Group, LLC, a California limited liability company ("NLAG"), and
those parties set forth on the Schedule of Purchasers attached hereto
(collectively, the "PURCHASERS"). The Company, NLAG and the Purchasers
(individually, a "PARTY" and, collectively, the "PARTIES") agree as follows:
Section 1. EXISTING PURCHASE AGREEMENT. All of the Parties except Xxxxxx Xxxxxx
("XXXXXX") and DC Investments, LLC, an Indiana limited liability company ("DCI")
have previously entered into a Preferred Stock and Warrant Purchase Agreement
dated April 25, 2002 (the "Purchase Agreement"). This Amendment is made by the
Parties for the purposes of (a) joining each of Xxxxxx and DCI as a party to the
Purchase Agreement as a "Purchaser" thereunder (as the term "Purchaser" is
defined in the Purchase Agreement), (b) making certain amendments to the
Purchase Agreement and the exhibits and schedules thereto necessitated by such
joinder, (c) amending the exhibits to the Purchase Agreement to include this
Amendment in all references in such exhibits to the Purchase Agreement, and (d)
amending the Purchase Agreement to accommodate certain unanticipated
circumstances relating to the payment of fees and issuance of warrants to
certain professional advisors engaged by Xxxxxx X. Xxxxxx. Terms used in this
Amendment as capita lized defined terns that are not defined in this Amendment
shall have the meanings ascribed to them in the Purchase Agreement.
Section 2. DESIGNATION OF XXXXXX AS ADDITIONAL PURCHASER. Xxxx Xxxxxx, one of
the Purchasers under the Purchase Agreement ("SKJODT"), hereby designates Xxxxxx
to be the Purchaser of 2,500 Units that Skjodt had agreed to purchase pursuant
to the Purchase Agreement.
Section 3. XXXXXX AGREEMENT TO PURCHASE UNITS. Xxxxxx hereby agrees to purchase
2,500 of the Units that Skjodt had agreed to purchase pursuant to the Purchase
Agreement, which purchase obligation of Xxxxxx is subject to and upon the terms
and conditions of the Purchase Agreement.
Section 4. AGREEMENT FOR LAIKIN TO PURCHASE UNITS. Skjodt hereby designates
Xxxxxx X. Xxxxxx ("XXXXXX") to be the Purchaser of 2,000 Units that Skjodt had
agreed to purchase pursuant to the Purchase Agreement. Laikin hereby agrees to
purchase 2,000 of the Units that Skjodt had agreed to purchase pursuant to the
Purchase Agreement, which purchase obligation of Laikin is subject to and upon
the terms and conditions of the Purchase Agreement.
Section 5. REDUCTION OF SKJODT UNITS. As a result of Xxxxxx'x and Xxxxxx'x
agreement to purchase 4,500 Units in accordance with this Amendment, the number
of Units that Skjodt is obligated to purchase pursuant to the Purchase Agreement
is reduced from 7,500 to 3,000 Units.
Section 6. XXXXXX JOINDER IN PURCHASE AGREEMENT. Xxxxxx hereby joins in and
agrees to be bound by, and the parties thereto all consent to such joinder of
Xxxxxx in, the Purchase Agreement. Xxxxxx is a Purchaser under the Purchase
Agreement, and hereby makes the representations and warranties made by the
Purchasers in Article 4 of the Purchase Agreement.
Section 7. DESIGNATION OF DCI AS ADDITIONAL PURCHASER. Xxxxxxx X. Xxxxxx, one of
the Purchasers under the Purchase Agreement ("DURHAM"), hereby designates DCI to
be the Purchaser of 5,000 Units that Durham had agreed to purchase pursuant to
the Purchase Agreement.
Section 8. DCI AGREEMENT TO PURCHASE UNITS. DCI hereby agrees to purchase 5,000
of the Units that Durham had agreed to purchase pursuant to the Purchase
Agreement, which purchase obligation of DCI is subject to and upon the terms and
conditions of the Purchase Agreement.
Section 9. REDUCTION OF DURHAM UNITS. As a result of DCI's agreement to purchase
5,000 Units in accordance with this Amendment, the number of Units that Durham
is obligated to purchase pursuant to the Purchase Agreement is reduced from
9,880 to 4,880 Units.
Section 10. DCI JOINDER IN PURCHASE AGREEMENT. DCI hereby joins in and agrees to
be bound by, and the parties thereto all consent to such joinder of DCI in, the
Purchase Agreement. DCI is a Purchaser under the Purchase Agreement, and hereby
makes the representations and warranties made by the Purchasers in Article 4 of
the Purchase Agreement.
Section 11. AMENDMENT OF SECTION 5.1.11. Section 5.1.11 of the Purchase
Agreement is hereby revised and amended by adding Xxxxxx and DCI as
parties-to-be to the Voting Agreement.
Section 12. AMENDMENT OF SECTION 10.12. Section 10.12 of the Purchase Agreement
is hereby amended by deleting such Section in its entirety and substituting the
following:
Section 10.12. Expenses. The Company shall pay all legal, accounting,
advisory and other fees, and other out-of-pocket expenses incurred by the
Company, Jimirro, NLAG and the Purchasers in connection with the
transactions contemplated by this Agreement (including, without limitation,
the documents attached as exhibits hereto), including, without limitation,
the proxy solicitation commenced by Xxxxxx X. Xxxxxx on or about August 11,
2000, the March Letter Agreement, and all other matters regarding the
Company prior to the Closing and related litigation excluding any amounts
payable to Xxxxxxxxx Xxxxxxx, LLP. Xxxxxx and
NLAG agree and acknowledge that any fees required to be paid to Xxxxxxxxx
Traurig, LLP or any of its affiliates will be the sole responsibility and
obligation of Laikin and/or NLAG, as appropriate, and not of the Company.
Laikin and NLAG agree and acknowledge that any fees required to be paid to
GTH Capital, Inc. or any of its affiliates in excess of the amount set
forth on Schedule 10.12 will be the sole responsibility and obligation of
Laikin and/or NLAG, as appropriate, and not of the Company. Jimirro shall
be a third-party beneficiary of this Section 10.12. Without limiting the
foregoing, the parties agree and acknowledge that, other than advisors who
have been paid as part of the Purchaser Expenses, the advisors listed on
Schedule 10.12 are all of the advisors whose fees the Company is obligated
to pay pursuant to this Section 10.12 and that each of the advisors listed
on Schedule 10.12, except GTH Capital, Inc. ("GTH") and Xxxxxxxxxx
Partners, Inc. shall have had their respective fees paid by the Company on
or prior to the Closing, including, if not paid previously, by wire
transfer of immediately available funds in an amount equal to such
advisor's respective "Closing Cash" amount set forth on Schedule 10.12 and
the issuance of the Company's unsecured one-year promissory notes in the
form of Exhibit P attached hereto in an amount equal to such advisor's
respective "Closing Note" amount set forth on Schedule 10.12, all in
connection with and as part of the Closing.
The Purchasers and the Company have approved the amounts listed on Schedule
10.12 and the amounts of Purchaser Expenses listed on the Schedule of
Purchasers attached hereto and no further approval of such amounts shall be
necessary. The amounts listed on Schedule 10.12 may be increased prior to
Closing subject to approval by the Company and the Purchasers, each acting
in good faith with respect thereto. The amounts shown on Schedule 10.12 as
payable to GTH is not a definitive amount owed to GTH (the amount of such
obligation being not yet liquidated) but is reflected on Schedule 10.12
only to indicate the maximum obligation of the Company under Section 10.12
relating to the payment of GTH fees. Accordingly, no admission is intended
or made thereby as to the amounts owed by Laikin to GTH.
Section 13. SUBSTITUTION AND ADDITION OF EXHIBITS.
(a) The exhibit attached to the Purchase Agreement as Exhibit G, Voting
Agreement, is deleted hereby and substituted in its place is the form of such
Exhibit G attached to this Amendment. Exhibit G was revised to include Xxxxxx
and DCI as parties to the Voting Agreement and for the purposes stated in
Section 15(c).
(b) The Exhibit attached to the Purchase Agreement as Exhibit F, Release
Agreement, is deleted hereby and substituted in its place is the form of such
Exhibit F attached to this Amendment.
(c) All of the exhibits to the Purchase Agreement not referred to in Sections
13(a) and 13(b) of this Amendment are also deleted hereby and the like-lettered
and named documents attached as exhibits to this Amendment are hereby
substituted for those deleted exhibits. The only revisions made to those
remaining exhibits were made to include this Amendment as part of the Purchase
Agreement in the references to the Purchase Agreement contained in the exhibits.
Section 14. REVISED SCHEDULE OF PURCHASERS. The Schedule of Purchasers attached
to the Purchase Agreement is hereby revised and amended in its entirety by
replacing it with the Schedule of Purchasers attached to this Amendment.
Section 15. REVISED SCHEDULE 4.9. SCHEDULE 4.9 to the Purchase Agreement is
hereby revised and amended in its entirety by replacing it with the Schedule 4.9
attached to this Amendment.
Section 16. REVISED SCHEDULE 10.12. Schedule 10.12 to the Purchase Agreement is
hereby revised and amended in its entirety by replacing it with the Schedule
10.12 attached to this Amendment.
Section 17. WARRANTS. In the event Xxxxxxxxx Traurig, LLP or GTH Capital, Inc.
fails to execute the Xxxxxxxxx Warrant Agreement or the GTH Warrant Agreement,
as applicable, on or before the Closing, the Parties hereby (i) waive their
respective conditions precedent to Closing in Sections 5.1.14, 5.1.15, 5.2.11
and 5.2.12 of the Purchase Agreement, (ii) mutually agree to remove Xxxxxxxxx
Traurig, LLP or GTH Capital, Inc., as the case may be, as parties to the NLAG
Registration Rights Agreement, and (iii) mutually agree to consummate the
transactions contemplated by the Purchase Agreement, as amended hereby,
notwithstanding the failure of those conditions precedent. Upon the written
request of Laikin or NLAG, the Company shall (i) execute and deliver the
Xxxxxxxxx Warrant Agreement and the GTH Warrant Agreement (and issue a portion
of the GTH Warrant Agreement to Castilla Investments, LLC (if it is an
"accredited investor" as that term is defined in Rule 501 of Regulation D
promulgated under the Securities Act of 1933, as amended) if GTH Capital, Inc.
shall direct), (ii) issue the related Warrant Certificates, and (iii) revise the
NLAG Registration Rights Agreement to add Xxxxxxxxx Xxxxxxx, LLP and GTH
Capital, Inc. (and Castilla Investments, LLC, if applicable) as parties to the
NLAG Registration Rights Agreement (and the Purchasers hereby agree to such
revision) or to grant substantially similar registration rights to Xxxxxxxxx
Xxxxxxx, LLP and GTH Capital, Inc. (and Castilla Investments, LLC, if
applicable). Neither Xxxxxxxxx nor GTH is intended to be a third party
beneficiary under, nor shall they have any right to enforce the provisions of,
this Purchase Agreement with respect to the Company's agreements in connection
with the contemplated issuance by the Company of warrants under the Xxxxxxxxx
Warrant Agreement or the GTH Warrant Agreement.
Section 18. WAIVER OF ACKNOWLEDGEMENTS. In connection with the Closing, the
Company hereby waives the condition of the delivery of the acknowledgments by
Xxxxx Raysman Xxxxxxxxx Xxxxxx Xxxxxxx, and GTH Capital, Inc. provided for in
Section 5.2.19 of the Purchase Agreement, it being understood and agreed that
any fees of each such party in excess of the amount provided for such party on
Schedule 10.12 of the Purchase Agreement (without increase pursuant to Section
10.12 of the Purchase Agreement) shall be for the account of Laikin or NLAG as
appropriate.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of the
date first above written.
J2 COMMUNICATIONS
By:
--------------------------------------
Xxxxx X. Xxxxxxx, President
NATIONAL LAMPOON ACQUISITION GROUP, LLC
By:
--------------------------------------
Xxxxxx X. Xxxxxx, Managing Member
"PURCHASERS"
-----------------------------------------
Xxxxxx X. Xxxxxx
-----------------------------------------
Xxxx Xxxxxx
-----------------------------------------
Xxxxxxx X. Xxxxxx
-----------------------------------------
Xxxxxx Xxxxxx
DC INVESTMENTS, LLC
By:
--------------------------------------
Xxxxxxx X. Xxxxxx, Managing Member
SCHEDULE OF PURCHASERS
NAME ADDRESS # OF UNITS AGGREGATE PRICE
---- ------- ---------- ---------------
Xxxxxx X. Xxxxxx 0000 Xxxxx Xxxx 19,864 $1,986,400(1)
Xxxxxx XX 000000
Xxxx Xxxxxx 0000 Xxxxx Xxxx 3,000 $300,000
Xxxxxx XX 00000
Xxxxxxx X. Xxxxxx 000 Xxxxxxxx Xxxxxx, 4,880 $488,000(2)
Xxxxx 0000
Xxxxxxxxxxxx XX 00000
Xxxxxx Xxxxxx 000 Xxxxxxx Xxxxxx, 2,500 $250,000
Xxxxx 000
Xxxxxxxx Xxxx XX 00000
DC Investments, LLC, 000 Xxxxxxxx Xxxxxx, 5,000 $500,000
an Indiana limited Suite 3680
liability company Xxxxxxxxxxxx XX 00000
TOTAL 35,244 3,524,400
PURCHASER EXPENSES:
Xxxxxx X. Xxxxxx $386,400
Xxxxxxx X. Xxxxxx 188 000
--------
TOTAL $574,400
--------------------
(1) $400,000 of such price has previously been paid to the Company as fees paid
for extensions of the Letter Agreement, dated March 5, 2001, among the Company
and certain of the Purchasers. $386,400 of such price has been paid as Purchaser
Expenses paid by Xx. Xxxxxx.
(2) $50,000 of such price has previously been paid to the Company as fees paid
for extensions of the Letter Agreement, dated March 5, 2001, among the Company
and certain of the Purchasers. $188,000 of such price has been paid as Purchaser
Expenses paid by Xx. Xxxxxx.
SCHEDULE 4.9
REPORTING PERSON NO. OF SHARES BENEFICIALLY OWNED
Xxxxxx X. Xxxxxx 167,250
Xxxx Xxxxxx 141,050
Samerian, LLP 20,000
Xxxxxxx X. Xxxxxx 73,200
Diamond Investments, LLC 92,399
DW Leasing Company, LLC 17,350
Xxxxxxxxxxx X. Xxxxxxxx 129,900
Xxxxx X. Xxxxxxxx 60,200
Xxxx X. Xxxxxx 26,000
Xxxxxx Xxxxxx 40,100
SCHEDULE 10.12
Advisor Closing Cash Closing Note
------- ------------ ------------
Xxxxxx Xxxxxxx $400,000 $225,000
Xxxxxx, Xxxx Xxxxxxxx LLP $300,000 -0-
Xxxxx Xxxxxx Xxxx LLP $50,000 $25,000
Leagre Xxxxxxxx Xxxxxxx LLP $150,000 $165,000
Xxxxx Raysman Xxxxxxxxx Xxxxxx Xxxxxxx LLP $30,000(1) -0-
GTH Capital, Inc. $25,000(1) -0-
Xxxxxxxxxx Partners, Inc.(2) -0- -0-
Xxxxx Xxxxxxx $5,000(1) -0-
--------------------
(1) If such fees are required to be paid in cash at the Closing, NLAG and/or its
designees will purchase Option Units having a value equivalent to the footnoted
fees being paid.
(2) Xxxxxxxxxx Partners, Inc. shall receive a fee not to exceed three percent
(3%) of the purchase price for the securities sold hereunder.
04103.0001 #395075
