-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EtLiC9k6DTOxawJk51IrKFKt5f8Xc0jVLKMovEeiOTDGX++FpBsvJQzCZ3AIA9vQ dkFF6MtzeMoUXsNwtAsLxQ== 0000919574-03-000841.txt : 20030328 0000919574-03-000841.hdr.sgml : 20030328 20030328163427 ACCESSION NUMBER: 0000919574-03-000841 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 20030328 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL LAMPOON INC CENTRAL INDEX KEY: 0000798078 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MOTION PICTURE & VIDEO TAPE PRODUCTION [7812] IRS NUMBER: 954053296 STATE OF INCORPORATION: CA FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-38901 FILM NUMBER: 03625708 BUSINESS ADDRESS: STREET 1: 10850 WILSHIRE BLVD STE 1000 CITY: LOS ANGELES STATE: CA ZIP: 90024 BUSINESS PHONE: 3104745252 MAIL ADDRESS: STREET 1: 10850 WILSHIRE BLVD STREET 2: SUITE 1000 CITY: LOS ANGELES STATE: CA ZIP: 90024 FORMER COMPANY: FORMER CONFORMED NAME: J2 COMMUNICATIONS DATE OF NAME CHANGE: 19880308 FORMER COMPANY: FORMER CONFORMED NAME: J2 TELECOMMUNICATIONS DATE OF NAME CHANGE: 19890731 FORMER COMPANY: FORMER CONFORMED NAME: J2 COMMUNICATIONS /CA/ DATE OF NAME CHANGE: 19920703 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: HOLZER RONALD H CENTRAL INDEX KEY: 0001175620 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 600 CENTRAL AVE STREET 2: SUITE 240 CITY: HIGHLAND PARK STATE: IL ZIP: 60035 BUSINESS PHONE: 8474332270 MAIL ADDRESS: STREET 1: 600 CENTRAL AVE STREET 2: SUITE 240 CITY: HIGHLAND PARK STATE: IL ZIP: 60035 SC 13D/A 1 d394433_13d-a.txt SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 ---------------- SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No. 1)(1) National Lampoon, Inc. (formerly named J2 Communications (JTWO)) - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock - -------------------------------------------------------------------------------- (Title of Class of Securities) 466254208 - -------------------------------------------------------------------------------- (CUSIP Number) Ronald Holzer, 600 Central Avenue, Suite 240, Highland Park, Illinois 60035 (847) 433-2270 - -------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) March 27, 2002 - -------------------------------------------------------------------------------- (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 Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box [_]. Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7 for other parties to whom copies are to be sent. - ---------- (1) 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 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.: 466254208 ________________________________________________________________________________ 1 NAME OF REPORTING PERSONS I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY) Ronald Holzer ________________________________________________________________________________ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [_] (b) [_] ________________________________________________________________________________ 3 SEC USE ONLY ________________________________________________________________________________ 4 SOURCE OF FUNDS* PF ________________________________________________________________________________ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [_] ________________________________________________________________________________ 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States of America ________________________________________________________________________________ 7 SOLE VOTING POWER NUMBER OF 321,790 SHARES _________________________________________________________________ 8 SHARED VOTING POWER BENEFICIALLY 0 OWNED BY _________________________________________________________________ EACH 9 SOLE DISPOSITIVE POWER REPORTING 321,790 PERSON _________________________________________________________________ 10 SHARED DISPOSITIVE POWER WITH 0 ________________________________________________________________________________ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 321,790 ________________________________________________________________________________ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* [_] ________________________________________________________________________________ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 18.0% ________________________________________________________________________________ 14 TYPE OF REPORTING PERSON* IN ________________________________________________________________________________ *SEE INSTRUCTIONS BEFORE FILLING OUT! This Schedule 13D is being filed for the purpose of disclosing the current number of shares of Common Stock of National Lampoon, Inc. (formerly named J2 Communications (JTWO)) that may be deemed to be beneficially owned by Ronald Holzer and includes both Common Stock owned directly by Mr. Holzer as well as the derivative amount of Common Stock of the Issuer deemed to be beneficially owned by Mr. Holzer based upon his ownership of 5,000 warrants to acquire Common Stock ("Warrants") and 5,000 shares of Series B Convertible Preferred Stock. This Schedule 13D does not include securities that are held by other reporting persons. CUSIP No.: 466254208 ________________________________________________________________________________ Item 1. Security and Issuer. The name of the issuer is National Lampoon, Inc. (formerly named J2 Communications), a Delaware corporation (the "Issuer"). The address of the Issuer's offices is 10850 Wilshire Boulevard, Suite 1000, Los Angeles, California 90024. This Schedule 13D Amendment No. 1 relates to the Issuer's Common Stock (the "Shares"). ________________________________________________________________________________ Item 2. Identity and Background. (a-c, f) This Schedule 13D Amendment No. 1 is being filed by Ronald Holzer, a United States citizen, whose business address is 660 Central Avenue, Suite 240, Highland Park, Illinois 60035. Mr. Holzer is the sole officer, director and shareholder of Alps International Management Inc., an Illinois corporation which serves as general partner to two private investment partnerships (each organized under Illinois law) and advises one private investment fund organized under the laws of the British Virgin Islands. (d) Mr. Holzer has not, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) Mr. Holzer has not, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which he was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, Federal or state securities laws or finding any violation with respect to such laws. ________________________________________________________________________________ Item 3. Source and Amount of Funds or Other Consideration. As of the date hereof, Mr. Holzer may be deemed to beneficially own in his individual capacity 321,790 Shares. Mr. Holzer paid from his personal funds a total of $836,175.65 for the Shares deemed to be beneficially owned by him, inclusive of $336,175.65 for Common Shares and $500,000 for Series B Preferred Stock and Warrants convertible to Common Stock. ________________________________________________________________________________ Item 4. Purpose of Transaction. Generally, the purpose of the transaction was to acquire, with other shareholders, a controlling interest in the Issuer to effect a change in management of the Issuer. Pursuant to a Preferred Stock and Warrant Purchase Agreement dated April 25, 2002 (the "Purchase Agreement") among National Lampoon Acquisition Group, LLC (the "NLAG Group"), Daniel S. Laikin, Paul Skjodt, Timothy S. Durham (collectively the "Purchasers") and the Issuer, the following steps were taken: a) the Issuer's Restated Articles of Incorporation were amended and restated to effect, among other things, the establishment of a new series of the Issuer's capital stock called Series B Convertible Preferred Stock ("Series B Preferred"); b) the Issuer sold to the Purchasers 35,244 units, with each such unit consisting of one share of Series B Preferred and a warrant to purchase 28.169 shares of Common Stock at a purchase price of $3.55 per share prior to the second anniversary of the date of the issuance of the warrant and $5.00 per share from and after such anniversary (the "Units"), for $3,524,400. The Issuer also granted to NLAG, or its designees, an option, exercisable on or before the earlier of January 25, 2003 or ninety days after the Common Stock is relisted for trading on the Nasdaq SmallCap Market or listed on any other national exchange or quotation system, to purchase up to an additional 29,256 Units at a price of $100.00 per Unit. On January 21, 2003, the Issuer's Board of Directors authorized and approved an extension of the period for exercising the NLAG option from January 25, 2003 until March 31, 2003; c) a registration rights agreement was entered into between the Issuer and the Purchasers pursuant to which the Purchasers have been granted registration rights with respect to, among other things, the shares of Common Stock issuable upon conversion of the Series B Preferred and upon exercise of the warrants; d) the amendment and restatement of the Issuer's Bylaws to effect, among other things, an increase in the size of the Issuer's Board of Directors to seven members; and e) the Issuer's entering into a new employment, registration rights, indemnification and security agreements with James P. Jimirro, the President and Chief Executive Officer of the Issuer (collectively, the "New Jimirro Agreements"). The Purchase Agreement was amended by the First Amendment to Preferred Stock and Warrant Purchase Agreement, dated as of May 17, 2002 (the "Amended Purchase Agreement"), pursuant to the terms of which Mr. Holzer purchased 2,500 Units (for an aggregate price of $250,000) that Mr. Skojdt had agreed to purchase in the Agreement and Mr. Holzer and DC Investments, LLC became parties to the Agreement. Also as of May 17, 2002, Mr. Holzer, Mr. Jimirro, the Purchasers and several other shareholders entered into a voting agreement (the "Voting Agreement") regarding the composition of the Board of Directors and certain other matters. Pursuant to the Voting Agreement, Mr. Jimirro and the NLAG Group agreed to cause the Board of Directors to initially consist of three nominees of Mr. Jimirro (the "Jimirro Directors"), three nominees of the NLAG Group (the "NLAG Group Directors"), and one director nominated jointly by a majority of the Jimirro Directors and a majority of the NLAG Group Directors. To give effect to this Agreement, two of the Issuer's directors, Joe De Simio and Gary Cowan, resigned from the Board of Directors on May 17, 2002, and Messrs. Durham and Skjodt were elected to fill the vacancies created by those resignations and Joshua A. Finkenberg was elected as a director to fill the vacancy created by the amendment to the Bylaws. The Voting Agreement will expire on the latest to occur of the satisfaction of certain payment obligations to Mr. Jimirro under the New Jimirro Agreements and the decrease in Mr. Jimirro's beneficial ownership to fewer than 100,000 shares of Common Stock. The Voting Agreement also requires as a condition to certain transfers of shares by the members of the NLAG Group that the applicable transferees agree to be bound by the terms of the Voting Agreement. By amendment to the Voting Agreement, effective June 7, 2002, Mr. Holzer was removed as a party to the Voting Agreement which continued in effect as to all other parties thereto. Pursuant to the Purchase Agreement, Mr. Laikin was appointed Chief Operating Officer on May 17, 2002. The Issuer and Mr. Laikin also entered into an Employment Agreement and Mr. Laikin was granted an option under the Issuer's Amended and Restated 1999 Stock Option, Deferred Stock and Restricted Stock Plan to acquire 100,000 shares of Common Stock. On March 17, 2003, Mr. Holzer was delegated by NLAG Group the right to exercise an option to acquire 2,500 Units for $250,000. Mr. Holzer exercised this option on March 27, 2003. In addition to the acquisition of securities of the Issuer pursuant to the warrants and conversion rights described above and in Item 5 below, and depending on the market price of the Common Stock and upon other conditions, Mr. Holzer may acquire additional shares of Common Stock from time to time in the open market or otherwise or may seek to acquire Common Stock from the Issuer at prices that he determines to be appropriate. In addition, depending upon market prices and other conditions, Mr. Holzer may dispose of shares of Common Stock at any time and from time to time in the open market or otherwise at prices that Mr. Holzer determines to be appropriate. ________________________________________________________________________________ Item 5. Interest in Securities of the Issuer. a) As of the date hereof, Mr. Holzer may be deemed to be the beneficial owner of 321,790 Shares, constituting 18.0% of the Shares of the Issuer, based upon the total of the 1,501,190 Shares of Common Stock reported to be outstanding as of March 21, 2003 in the Issuer's Form 10-Q filed for the period ending January 31, 2003 and the 281,690 shares of Common Stock that would be deemed to be outstanding assuming the conversion of the currently issued and outstanding shares of Series B Preferred into Common Stock and Warrants Mr. Holzer holds as discussed in Item 4 above. b) Mr. Holzer has the sole power to dispose of, to direct the disposition of, to vote or to direct the vote of 321,790 Common Shares with no shared power to vote, to direct the vote, to dispose of or to direct the disposition of any Common Shares. c,d&e) Not applicable. ________________________________________________________________________________ Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. As noted in response to Item 4 above, Mr. Holzer was a party to the First Amendment to Preferred Stock and Warrant Purchase Agreement, dated as of May 17, 2002 (the "Amended Purchase Agreement") by virtue of which Mr. Holzer joined and agreed to be bound by the Preferred Stock and Warrant Purchase Agreement (the "Purchase Agreement") discussed in Item 4 above. Mr. Holzer was also a party to the Voting Agreement dated as of May 17, 2002 and the First Amendment to the Voting Agreement effective June 7, 2002 (the "Amended Voting Agreement"). The other parties to the Purchase Agreement are the Issuer and the Purchasers discussed in Item 4 above. The other parties to the Amended Purchase Agreement are the Purchasers, the Issuer and DC Investments, LLC. The other parties to the Voting Agreement are the Purchasers, DC Investments, LLC, Samerian LLP, Diamond Investments, LLC, Christopher R. Williams, Helen C. Williams, DW Leasing Company, LLC, Judy B. Laikin and James Jimirro. The other parties to the Amended Voting Agreement are Messrs. Jimirro and Laikin. Mr. Holzer is also a party to the Notice of Option Exercise dated March 27, 2003 and the Issuer is a party to the Receipt dated March 28, 2003, documents that were entered into as a result of a delegation from the NLAG Group to Mr. Holzer on March 17, 2003 of the right to exercise an option to acquire an additional 2,500 Units for $250,000. As noted above, Mr. Holzer exercised this option on March 27, 2003. ________________________________________________________________________________ Item 7. Material to be Filed as Exhibits. Attached are copies of the Designation of Rights Agreement (Exhibit 1), the Purchase Agreement (Exhibit 2), the Amended Purchase Agreement (Exhibit 3), the Voting Agreement (Exhibit 4), the Amended Voting Agreement (Exhibit 5) and Notice of Option Exercise and Receipt (Exhibit 6). ________________________________________________________________________________ SIGNATURE 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. 3/28/03 ------------------------------- (Date) /s/ Ronald Holzer ------------------------------- Ronald Holzer Attention. Intentional misstatements or omissions of fact constitute federal criminal violations (see 18 U.S.C. 1001). 04103.0001 #394433 EX-99 3 d331131_ex99-1.txt EXHIBIT 99-1 Exhibit 1 J2 COMMUNICATIONS NLAG REGISTRATION RIGHTS AGREEMENT May 17, 2002 NLAG REGISTRATION RIGHTS AGREEMENT THIS NLAG REGISTRATION RIGHTS AGREEMENT, dated as of May 17, 2002 (this "AGREEMENT"), is entered into by and made among J2 COMMUNICATIONS, a California corporation (the "COMPANY"), National Lampoon Acquisition Group, LLC, a California limited liability company ("NLAG"), GTH Capital, Inc., a Florida corporation ("GTH"), and those parties set forth on the Schedule of Shareholders attached hereto (each, a "SHAREHOLDER" and collectively, the "SHAREHOLDERS"). In consideration of the promises made herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: Article 1. DEFINITIONS. Section 1.1 DEFINITIONS. As used in this Article 1 and elsewhere in this Agreement, the following terms shall have the following respective meanings: "COMMISSION" means the Securities and Exchange Commission or any other federal agency administering the Securities Act. "COMMON SHARES" means the Company's Common Stock, no par value per share. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended, or any similar federal law then in force. "PERSON" means an individual, a partnership, a joint venture, a corporation, a limited liability company, a trust, an unincorporated organization, a government or any department or agency thereof or any other entity. "REGISTRABLE SECURITIES" means (i) any Common Shares issued or issuable upon conversion of the Series B Shares, (ii) any Common Shares issued in respect of securities issued pursuant to the conversion of the Series B Shares upon any stock split, stock dividend, recapitalization or similar event, and (iii) any Common Shares issued or issuable upon exercise of the warrants to purchase Common Shares issued to the Shareholders in connection with their purchase of Series B Shares. "REGISTRATION EXPENSES" shall have the meaning set forth in Section 5.1. "REGISTRATION STATEMENT" means the prospectus and other documents filed with the Commission to effect a registration under the Securities Act. "SECURITIES ACT" means the Securities Act of 1933, as amended, or any similar federal law then in force. "SELLING EXPENSES" means all underwriting discounts, selling commissions and transfer taxes incurred pursuant to the sale of Registrable Securities. "SERIES B SHARES" means the shares of Series B Convertible Preferred Stock of the Company, no par value per share. "SERIES B MAJORITY" means Shareholders holding in the aggregate not less than 50% of the outstanding Registrable Securities. Article 2. DEMAND REGISTRATIONS. Section 2.1 REQUESTS FOR REGISTRATION. Subject to Section 2.7, a Series B Majority shall have the right to make up to two separate requests in writing that the Company effect the registration of all or a part of the Registrable Securities held by those Shareholders, each such request to specify the registration form to be used and the intended method or methods of disposition of the Registrable Securities. The Company shall pay all Registration Expenses in connection with any registration pursuant to this Section 2.1, and all Selling Expenses shall be borne by the holders of the securities so registered pro rata on the basis of the number of their shares so registered. Each request for a registration pursuant to this Section 2.1 shall specify the approximate number of Registrable Securities requested to be registered. Promptly after receipt of any such request, the Company will give written notice of the requested registration to all other holders of Registrable Securities and, subject to Section 2.4 below, will include in such registration all Registrable Securities with respect to which the Company has received written requests for inclusion therein within fifteen (15) days after the receipt of the Company's notice. A request for registration will not count as a request for registration under this Section 2.1 until the Registration Statement relating to the registration has become effective, provided that, in any event, the Company will pay all Registration Expenses in connection with any registration pursuant to this Section 2.1, regardless of whether the Registration Statement relating thereto has become effective unless such Registration Statement is withdrawn at the request of a Series B Majority, other than pursuant to Section 2.4, in which case the Series B Majority shall pay all such Registration Expenses. Section 2.2 SHORT-FORM REGISTRATIONS. The Company shall use its best efforts to qualify for registration on Form S-2 or S-3 or any comparable or successor form or forms or any similar short form registration ("SHORT-FORM REGISTRATIONS"). Subject to Section 2.7 (for registration on Form S-2 or any comparable or successor form or forms) and to Section 2.4 below, in addition to the demand registrations provided pursuant to Section 2.1 above, a Series B Majority will be entitled to request at any time and from time to time an unlimited number of Short-Form Registrations in which the Company will pay all Registration Expenses, provided that the Company shall not be obligated to effect any registration pursuant to this Section 2.2 more than twice in any one year. Registration on Form S-3 or any comparable or successor form or forms shall not be subject to the minimum demand threshold set forth in Section 2.7. Section 2.3 PRIORITY ON DEMAND REGISTRATIONS. If any registration pursuant to Section 2.1 or Section 2.2 (a "DEMAND REGISTRATION") is an underwritten offering and the managing underwriters advise the Company in writing that in their opinion the number of Registrable Securities and other securities requested to be included in the offering exceeds the number of Registrable Securities and other securities, if any, which can be sold therein without adversely affecting the marketability of the offering, the Company will include in the offering prior to the inclusion of any securities which are not Registrable Securities the number of Registrable Securities requested to be included that, in the opinion of such underwriters, can be sold without adversely affecting the marketability of the offering, pro rata among the respective holders thereof on the basis of the aggregate number of Registrable Securities owned by each holder. Section 2.4 RESTRICTIONS ON DEMAND REGISTRATIONS. The Company may postpone for a reasonable period of time, not to exceed 120 days, the filing of a prospectus or the effectiveness of a Registration Statement for a Demand Registration if the Company concludes, following consultation with, and after obtaining the good faith approval of, the board of directors of the Company, that the Demand Registration would reasonably be expected to have a material adverse effect on any proposal or plan by the Company to engage in any acquisition of assets (other than in the ordinary course of business) or any merger, amalgamation, consolidation, tender offer or similar transaction or otherwise would have a material adverse effect on the business, assets, operations, prospects or financial or other condition of the Company; provided, however, that in that event, the holders of a majority of Registrable Securities requesting the Demand Registration will be entitled to withdraw their request and, if the request is withdrawn, such Demand Registration will not count as one of the permitted Demand Registrations hereunder and the Company will pay, to the fullest extent permitted by applicable law, all Registration Expenses in connection with the registration or prospectus; provided, further, that the Company may not use this deferral right more than twice in the aggregate or more than once in any twelve month period. Section 2.5 SELECTION OF UNDERWRITERS. On any Demand Registration, a Series B Majority will have the right to select the investment banker(s) and manager(s) to administer the offering, subject to the Company's approval which will not be unreasonably withheld or delayed. Section 2.6 OTHER REGISTRATION RIGHTS. Except as provided in this Agreement and except for registration rights granted to James P. Jimirro ("JIMMIRO"), the Company will not grant to any holder or prospective holder of any securities of the Company registration rights with respect to the securities which are senior or pari passu to the rights granted hereunder without the prior written consent of a Series B Majority. Section 2.7 DEMAND THRESHOLD. The minimum demand threshold for any Demand Registration under Section 2.1 or on Form S-2 or any comparable or successor form or forms (but not Form S-3 or any comparable or successor form or forms) under Section 2.2 of this Agreement shall be the lesser of (1) Five Hundred Thousand Dollars ($500,000) and (2) the greater of (a) Fifty Percent (50%) of the Series B Shares owned by the Shareholders and (b) One Hundred Thousand Dollars ($100,000). Article 3. PIGGYBACK REGISTRATIONS. Section 3.1 RIGHT TO PIGGYBACK. Whenever the Company proposes to register or qualify for distribution by prospectus any of its securities (other than pursuant to a Demand Registration or a registration under the Securities Act on Form S-4 or S-8 or any successor or similar forms) and the registration form or prospectus to be filed may be used for the registration or qualification for distribution of Registrable Securities (a "PIGGYBACK REGISTRATION"), whether or not for sale for its own account, the Company will give prompt written notice to all holders of Registrable Securities of its intention to effect the registration or file the prospectus and will include in the registration or qualification all Registrable Securities with respect to which the Company has received written requests for inclusion therein within fifteen (15) days after the receipt of the Company's notice. Any holder of Registration Securities that has given a written request may withdraw its Registrable Securities from the related Piggyback Registration by giving written notice to the Company and the managing underwriter, if any, on or before the thirtieth (30th) day prior to the planned effective date of the related Piggyback Registration. Section 3.2 PIGGYBACK EXPENSES. The Registration Expenses of the holders of Registrable Securities will be paid by the Company in all Piggyback Registrations whether or not any registration or prospectus has become effective or final. Section 3.3 PRIORITY ON PRIMARY REGISTRATIONS. If a Piggyback Registration is an underwritten primary registration or distribution by prospectus on behalf of the Company, and the managing underwriters advise the Company in writing (with a copy to each party hereto requesting registration or qualification for distribution by prospectus of Registrable Securities) that in their opinion the number of securities requested to be included in the registration or prospectus exceeds the number which can be sold in an offering without adversely affecting the marketability of the offering, the Company will include in the registration or prospectus (i) first, the securities the Company proposes to sell, (ii) second, the Registrable Securities requested to be included in the registration and any securities requested by Jimirro to be included in the registration, pro rata among the holders of the securities on the basis of the number of securities so requested to be included therein owned by each holder, and (iii) third, other securities requested to be included in the registration. The Company shall have the right to terminate or withdraw any registration initiated by it under this Section prior to the effectiveness of such registration, whether or not any Shareholder has elected to include securities in the registration, and except pursuant to Section 3.2 the Company shall have no liability to any of the Shareholders in connection with such termination or withdrawal. Section 3.4 PRIORITY ON SECONDARY REGISTRATIONS. If a Piggyback Registration is an underwritten secondary registration or distribution by prospectus on behalf of holders of the Company's securities, and the managing underwriters advise the Company in writing that in their opinion the number of securities requested to be included in the registration or qualification for distribution by prospectus exceeds the number which can be sold in an offering without adversely affecting the marketability of the offering, the Company will include in the registration or prospectus (i) first, the securities requested to be included therein by the holders requesting the registration, (ii) second, the Registrable Securities requested to be included in the registration, pro rata among the holders of such Registrable Securities on the basis of the number of Registrable Securities so requested to be included therein owned by each holder, and (iii) third, other securities requested to be included in the registration. Section 3.5 OTHER REGISTRATIONS. If the Company has previously filed a Registration Statement with respect to Registrable Securities pursuant to Article 2 or pursuant to Article 3, and if such previous registration or offering by prospectus has not been withdrawn or abandoned, the Company will not file and shall not be required to file or cause to be effected any other registration of any of its equity securities or securities convertible or exchangeable into or exercisable for its equity securities under the Securities Act (except under the Securities Act on Form S-4 or S-8 or any successor or similar forms), whether on its own behalf or at the request of any holder or holders of such securities, until a period of at least ninety (90) days have elapsed from the effective date of such previous registration. Article 4. REGISTRATION PROCEDURES. Section 4.1 REGISTRATION PROCEDURES. Subject to Sections 2.4 and 3.5, whenever the holders of Registrable Securities have requested that any Registrable Securities be registered pursuant to this Agreement, the Company will use its best efforts to effect the registration and sale of those Registrable Securities in accordance with the intended method of disposition thereof, and pursuant thereto the Company will as expeditiously as possible: (a) prepare and, within sixty (60) days after the end of the period within which requests for registration may be given to the Company, unless the failure to file within such sixty (60) day period occurs due to matters outside the Company's control, in which case as soon as practicable, file with the Commission a Registration Statement with respect to the Registrable Securities and thereafter use its best efforts to cause the Registration Statement to become effective (provided that before filing a Registration Statement or any amendments or supplements thereto, the Company will furnish to the counsel selected by the holders of a majority of the Registrable Securities covered by the Registration Statement copies of all documents proposed to be filed, which documents will be subject to review of counsel); (b) prepare and file with the Commission any amendments and supplements to the Registration Statement as may be necessary to keep the Registration Statement effective for a period of either (i) not less than ninety (90) days (subject to extension pursuant to Section 7.2) or, if the Registration Statement relates to an underwritten offering, such longer period as in the opinion of counsel for the underwriters a prospectus is required by law to be delivered in connection with sales of Registrable Securities by an underwriter or dealer or (ii) a shorter period as will terminate when all of the securities covered by the Registration Statement have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in the Registration Statement (but in any event not before the expiration of any longer period required under the Securities Act), and to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by the Registration Statement until such time as all of the securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in the Registration Statement; (c) furnish to each seller of Registrable Securities the number of copies of the Registration Statement, each amendment and supplement thereto, including each preliminary prospectus, final prospectus and other documents as the seller may reasonably request in order to facilitate the disposition of the Registrable Securities owned by the seller; (d) use its best efforts to register or qualify the Registrable Securities under any other securities or blue sky laws of any jurisdictions as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable the seller to consummate the disposition in those jurisdictions of the Registrable Securities owned by the seller (provided that the Company will not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph, (ii) subject itself to taxation in any jurisdiction or (iii) consent to general service of process in any jurisdiction); (e) promptly notify each seller of the Registrable Securities, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, upon discovery that, or upon the discovery of the happening of any event as a result of which, the prospectus contains an untrue statement of a material fact or omits to state any fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made, and, at the request of any such seller, the Company will prepare and furnish to seller a reasonable number of copies of a supplement or amendment to the prospectus so that, as thereafter delivered to the purchasers of Registrable Securities, the prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading in the light of the circumstances under which they were made; (f) use its best efforts to cause all the Registrable Securities to be listed on each securities exchange on which similar securities issued by the Company are then listed; (g) provide a transfer agent and registrar for all the Registrable Securities not later than the effective date of, or date of final receipt for, the Registration Statement; (h) enter into any customary agreements (including underwriting agreements with customary provisions) and take all other actions as the holders of a majority of the Registrable Securities being sold or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of the Registrable Securities (including, without limitation, effecting a share split or a combination of shares); (i) make available for inspection, subject to reasonable confidentiality restrictions on use, by any seller of Registrable Securities, any underwriter participating in any disposition pursuant to the Registration Statement and any attorney, accountant or other agent retained by any seller or underwriter, all financial and other records, pertinent corporate documents and documents relating to the business of the Company, and cause the Company's officers, directors, employees and independent accountants to supply all information reasonably requested by any seller, underwriter, attorney, accountant or agent in connection with the Registration Statement; (j) otherwise use its best efforts to comply with all applicable rules and regulations of the Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company's first full calendar quarter after the effective date of the Registration Statement, which earnings statement shall satisfy, in the case of a registration in the United States, the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; (k) in the event of the issuance of any stop order suspending the effectiveness of a Registration Statement, or of any order suspending or preventing the use of any related prospectus or ordering the cessation of trading or suspending the qualification of any securities included in the Registration Statement for sale in any jurisdiction, the Company will use its best efforts promptly to obtain the withdrawal of the order; (l) obtain one or more comfort letters, addressed to the holders of the Registrable Securities being sold, dated the effective date of such Registration Statement (and, if the registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement) signed by the Company's independent public accountants in customary form and covering matters of the type customarily covered by comfort letters as the holders of a majority of the Registrable Securities being sold reasonably request; and (m) provide legal opinions of the Company's outside counsel, addressed to the holders of the Registrable Securities being sold, dated the effective date of the Registration Statement (and, if the registration includes an underwritten public offering, dated the date of the closing under the underwriting agreement), with respect to the Registration Statement, each amendment and supplement thereto (including the preliminary prospectus) and all other documents relating thereto in customary form and covering matters of the type customarily covered by legal opinions of such nature. The Company may require each seller of Registrable Securities as to which any registration is being effected to furnish the Company with information regarding the seller and the intended and actual distribution of the securities as the Company may from time to time reasonably request. Article 5. REGISTRATION EXPENSES. Section 5.1 REGISTRATION EXPENSES. Except as otherwise expressly provided herein, all expenses incidental to the Company's performance of or compliance with this Agreement, including, without limitation, all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, word processing, duplicating and printing expenses, messenger and delivery expenses, and fees and disbursements of counsel for the Company and all independent certified public accountants, underwriters and other Persons retained by the Company (all expenses being herein called "REGISTRATION EXPENSES"), will be borne by the Company. The Company will, in any event, pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange on which similar securities issued by the Company are then listed. Notwithstanding the foregoing, all Selling Expenses shall be borne by the holders of the securities so registered pro rata on the basis of the number of their shares so registered. Section 5.2 COUNSEL FEES. In connection with each Demand Registration and each Piggyback Registration, the Company will reimburse the holders of Registrable Securities covered by the registration or qualification for the reasonable fees and disbursements of, if applicable, one United States counsel chosen by the holders of a majority of the Registrable Securities included in the registration or qualification. Section 5.3 ALLOCATION OF UNPAID EXPENSES. To the extent Registration Expenses are not required to be paid by the Company, each holder of securities included in any registration or qualification hereunder will pay those Registration Expenses allocable to the registration or qualification of the holder's securities so included, and any Registration Expenses not so allocable will be borne by all sellers of securities included in the registration in proportion to the aggregate selling price of the securities to be so registered or qualified. Article 6. INDEMNIFICATION. Section 6.1 INDEMNIFICATION. The Company agrees to indemnify and hold harmless, and hereby does indemnify and hold harmless, each holder of Registrable Securities, its affiliates and their respective officers, directors and partners and each Person who controls the holder (within the meaning of the Securities Act) against, and pay and reimburse the holder, affiliate, director, officer or partner or controlling person for any losses, claims, damages and liabilities, joint or several, to which the holder or any such affiliate, director, officer or partner or controlling person may become subject under the Securities Act or otherwise, insofar as the losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (i) any untrue or alleged untrue statement of material fact contained in any Registration Statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or, (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company will pay and reimburse holder and each affiliate, director, officer, partner and controlling person for any legal or any other expenses actually and reasonably incurred by them in connection with investigating or defending any loss, claim, liability, action or proceeding; provided, however, that the Company shall not be liable in any case to the extent that any loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or alleged untrue statement, or omission or alleged omission, made in the Registration Statement, any prospectus or preliminary prospectus or any amendment or supplement thereto, or in any application, in reliance upon, and in conformity with, Written information prepared and furnished to the Company by the holder expressly for use therein or by the holder's failure to deliver a copy of the Registration Statement or prospectus or any amendments or supplements thereto after the Company has furnished the holder with a sufficient number of copies of the same. In connection with an underwritten offering, the Company, if requested, will indemnify the underwriters, their officers and directors and each Person who controls the underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the holders of Registrable Securities. Section 6.2 COOPERATION. In connection with any Registration Statement in which a holder of Registrable Securities is participating, each holder will furnish to the Company in writing the information and affidavits as the Company reasonably requests for use in connection with any Registration Statement or prospectus and will indemnify and hold harmless the Company, its directors and officers, each underwriter and each other Person who controls the Company (within the meaning of the Securities Act) against any losses, claims, damages and liabilities, joint or several, to which the Company or any director or officer, any underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as the losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon (i) any untrue or alleged untrue statement of material fact contained in the Registration Statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or in any application or (ii) any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that the untrue statement or omission is made in the Registration Statement, any prospectus or preliminary prospectus or any amendment or supplement thereto, or in any application, in reliance upon and in conformity with written information prepared and furnished to the Company by the holder expressly for use therein, and such holder will reimburse the Company and each director, officer, underwriter and controlling Person for any legal or any other expenses actually and reasonably incurred by them in connection with investigating or defending any loss, claim, liability, action or proceeding; provided, however, that the obligation to indemnify and hold harmless will be individual and several to each holder and will be limited to the net amount of proceeds received by the holder from the sale of Registrable Securities pursuant to the Registration Statement. Section 6.3 CONTRIBUTION. If the indemnification provided for in Sections 6.1 or 6.2 is unavailable to an indemnified party under such Sections (other than by reason of exceptions provided in those Sections) in respect of any claims referred to in such Sections, then each applicable indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such claims in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and of the Shareholder on the other in connection with the statements or omissions which resulted in such claims. The amount paid or payable by a party as a result of the claims referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such party in connection with investigating or defending any action or claim. The relative fault of the Company on the one hand and of the Shareholder on the other shall be determined by reference to, among other things, whether the applicable misstatement or alleged misstatement relates to information supplied by the Company or by the Shareholder and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such misstatement or alleged misstatement. The Company and the Shareholder agree that it would not be just and equitable if contribution pursuant to this Section 6.3 were determine by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above. Notwithstanding the provisions of this Section 6.3, the Shareholder shall not be required to contribute any amount pursuant hereto in excess of the net proceeds (after deducting any discounts or commissions received by an underwriter in connection with such registration) from the offering received by the Shareholder. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution hereunder from any person who was not guilty of such fraudulent misrepresentation. Section 6.4 NOTICE. Any Person entitled to indemnification hereunder will (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in the indemnified party's reasonable judgment a conflict of interest between the indemnified and indemnifying parties may exist with respect to the claim, permit the indemnifying party to assume the defense of the claim with counsel reasonably satisfactory to the indemnified party. If the defense is assumed, the indemnifying party will not be subject to any liability for any settlement made by the indemnified party without the indemnifying party's consent (but its consent will not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim will not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by the indemnifying party with respect to the claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between the indemnified party and any other of the indemnified parties with respect to the claim. Section 6.5 SURVIVAL. The indemnification provided for under this Agreement will remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of the indemnified party and will survive the transfer of securities. Each party hereto also agrees to make any provisions, as are reasonably requested by any indemnified party, for contribution to the party in the event that indemnification from the party hereto is unavailable for any reason. Article 7. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. Section 7.1 PARTICIPATION. No Person may participate in any registration hereunder which is underwritten unless that Person (i) agrees to sell the Person's securities on the basis provided in any underwriting arrangements approved by the Person or Persons entitled hereunder to approve the arrangements (including, without limitation, pursuant to the terms of any overallotment or "green shoe" option requested by the managing underwriter(s), provided that no holder of Registrable Securities will be required to sell more than the number of Registrable Securities that the holder has requested the Company to include in any registration), (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of the underwriting arrangements, and (iii) cooperates with the Company's reasonable requests in connection with the registration or qualification (it being understood that the Company's failure to perform its obligations hereunder, which failure is caused by the Person's failure to cooperate, will not constitute a breach by the Company of this Agreement). The Person shall not be required to provide for indemnification obligations on the part of the Person that are greater than its obligations pursuant to Section 6.2. Section 7.2 NOTICE. Each Person who is participating in any registration hereunder agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 4.1(e) above, the Person will forthwith discontinue the disposition of its Registrable Securities pursuant to the Registration Statement until such Person's receipt of the copies of a supplemented or amended prospectus as contemplated by Section 4.1(e). In the event the Company shall give any such notice, the applicable time period mentioned in Section 4.1(b) during which a Registration Statement is to remain effective shall be extended by the number of days during the period from and including the date of the giving of the notice pursuant to this Section to and including the date when each seller of a Registrable Security covered by the Registration Statement shall have received the copies of the supplemented or amended prospectus contemplated by Section 4.1(e). Article 8. RULE 144 REPORTING. Section 8.1 RULE 144 REPORTING. With a view to making available the benefits of certain rules and regulations of the Commission which may permit the sale of the Restricted Securities to the public without registration, the Company agrees to: (a) make and keep public information available as those terms are understood and defined in Rule 144 under the Securities Act, at all times; (b) file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act at any time; and (c) so long as any Shareholder owns any Restricted Securities, furnish to the Shareholder forthwith upon request a written statement by the Company as to its compliance with the reporting requirements of Rule 144, and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and any other reports and documents so filed as the Shareholder may reasonably request in availing itself of any rule or regulation of the Commission allowing the Shareholder to sell any such securities without registration. Article 9. MISCELLANEOUS. Section 9.1 NO INCONSISTENT AGREEMENTS. Subject to Section 2.6, the Company will not hereafter enter into any agreement with respect to its securities which is inconsistent with or violates the rights granted to the holders of Registrable Securities in this Agreement. Section 9.2 ADJUSTMENTS AFFECTING REGISTRABLE SECURITIES. The Company will not take any action, or permit any change to occur, with respect to its securities which would materially and adversely affect the ability of the holders of Registrable Securities to include the Registrable Securities in a registration or qualification for sale by prospectus undertaken pursuant to this Agreement or which would adversely affect the marketability of the Registrable Securities in any registration or qualification (including, without limitation, effecting a share split or a combination of shares). Section 9.3 REMEDIES. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that any party hereto shall have the right to injunctive relief, in addition to all of its other rights and remedies at law or in equity, to enforce the provisions of this Agreement; provided, however, that no Shareholder shall have any right to an injunction to prevent the filing or effectiveness of any Registration Statement of the Company. Section 9.4 AMENDMENTS AND WAIVERS. Except as otherwise provided herein, the provisions of this Agreement may be amended or waived only upon the prior written consent of the Company, NLAG and holders of a majority of the Registrable Securities and provided, however, that in the event that an amendment or waiver would treat a holder or group of holders of Registrable Securities in a manner different from any other holders of Registrable Securities, then the amendment or waiver will require the consent of the holder or the holders of a majority of the Registrable Securities of the group adversely treated. Notwithstanding the foregoing, the parties to this Agreement agree that this Agreement and the Schedule of Shareholders attached hereto shall be amended without further action on their part to add as Shareholders any purchaser of Series B Shares who acquires such shares upon exercise of the Option granted to NLAG or its designees pursuant to the Preferred Stock and Warrant Purchase Agreement among the Company, NLAG and the Shareholders dated April 25, 2002, as amended by the First Amendment to Preferred Stock and Warrant Purchase Agreement dated May 17, 2002 or (ii) exercise of the Warrant granted to GTH or its designees pursuant to the Warrant Agreement between the Company and GTH. Upon each purchase of such shares, the Company shall cause the Schedule of Shareholders to be amended to add such purchaser as a Shareholder and shall cause an appropriate amendment to this Agreement to be prepared, substantially in the form attached hereto as Exhibit A, and such amendment shall become effective upon execution of such amendment by the person purchasing such shares. Section 9.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors and assigns. In addition, and whether or not any express assignment shall have been made, the provisions of this Agreement which are for the benefit of the holders of the Registrable Securities (or any portion thereof) as such shall be for the benefit of and enforceable by any subsequent holder of any Registrable Securities (or of such portion thereof), subject to the provisions respecting the minimum numbers or percentages of shares of Registrable Securities (or of such portion thereof) required in order to be entitled to certain rights, or take certain actions, contained herein. Section 9.6 SEVERABILITY. Whenever possible, each provision of this Agreement shall be interpreted in the manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement shall be reformed, construed and enforced in the jurisdiction as if the invalid, illegal or unenforceable provision had never been contained herein. Section 9.7 COUNTERPARTS. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all counterparts taken together will constitute one and the same Agreement. Section 9.8 DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. Section 9.9 GOVERNING LAW. This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of California without regard to the principles of conflicts of law thereof. Section 9.10 NOTICES. All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (iii) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All notices shall be addressed to the Company at its principal office, to NLAG at 111 Monument Circle, Suite 3680, Indianapolis, Indiana 46204, Attention: Timothy S. Durham, to each Shareholder at the address of such Shareholder appearing on the books of the Company or to such other address as the Company, NLAG or each Shareholder shall have furnished to the other in writing. IN WITNESS WHEREOF, the undersigned have set their hands and seals as of the above date. J2 COMMUNICATIONS By: ---------------------------------------- James P. Jimirro, President "SHAREHOLDERS" ---------------------------------------- Daniel S. Laikin ---------------------------------------- Paul Skjodt ---------------------------------------- Timothy S. Durham ---------------------------------------- Ronald Holzer DC INVESTMENTS, LLC By: ------------------------------------ Timothy S. Durham, Managing Member NATIONAL LAMPOON ACQUISITION GROUP, LLC By: ------------------------------------ Daniel S. Laikin, Managing Member GTH CAPITAL, INC. By: ------------------------------------ Art Chang, Chief Operating Officer SCHEDULE OF SHAREHOLDERS NAME Address Timothy S. Durham 111 Monument Circle, Suite 3680 Indianapolis IN 46204 Daniel S. Laikin 25 West 9th Street Indianapolis IN 46204 Paul Skjodt 25 West Ninth Street Indianapolis IN 46204 Ronald Holzer 600 Central Avenue, Suite 240 Highland Park IL 60035 DC Investments, LLC 111 Monument Circle, Suite 3680 Indianapolis IN 46204 EXHIBIT A AMENDMENT TO AND AGREEMENT TO JOIN IN AND BE BOUND BY REGISTRATION RIGHTS AGREEMENT THE UNDERSIGNED, in consideration of the opportunity to join as a Shareholder under and be bound by the Registration Rights Agreement (the "AGREEMENT") by and among J2 Communications (the "COMPANY"), National Lampoon Acquisition Group LLC, and certain shareholders of the Company dated May 17, 2002, hereby acknowledges receipt of a copy of the Agreement, acknowledges the opportunity to review the terms and provisions of the Agreement, and agrees to join in and be bound by the terms of the Agreement as a Shareholder (as that term is defined in the Agreement). DATED as of the ____ day of __________, 2002. - ----------------------------------- Signature - ----------------------------------- Printed Name 04103.0001 #331131 EX-99 4 d331148_ex99-2.txt EXHIBIT 99-2 Exhibit 2 J2 COMMUNICATIONS SERIES B CONVERTIBLE PREFERRED STOCK AND WARRANTS TO PURCHASE COMMON STOCK -------------------------------------------- PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT -------------------------------------------- APRIL 25, 2002 TABLE OF CONTENTS PAGE NO. ARTICLE 1. AUTHORIZATION; SALE OF SHARES AND WARRANTS; OPTION GRANT........1 Section 1.1 Authorization of the Shares and Warrants........................1 Section 1.2 Sale of the Units...............................................1 Section 1.3 Option to Purchase Additional Units.............................1 Section 1.4 Shareholder Consent and Information Statement...................2 Section 1.5 Purchaser Designee..............................................3 ARTICLE 2. CLOSING; DELIVERY...............................................3 Section 2.1 Closing.........................................................3 Section 2.2 Delivery........................................................3 ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................4 Section 3.1 Organization and Standing; Articles and Bylaws..................4 Section 3.2 Corporate Power; Authority......................................4 Section 3.3 Capitalization..................................................5 Section 3.4 Validity of the Shares, Option Shares, Conversion Shares, Warrants and Warrant Shares; No Conflict........................6 Section 3.5 Financial Information...........................................6 Section 3.6 SEC Reports.....................................................6 Section 3.7 Affiliate Arrangements..........................................7 ARTICLE 4. REPRESENTATIONS, WARRANTIES OF NLAG AND PURCHASERS..............7 Section 4.1 Organization and Standing.......................................7 Section 4.2 Power...........................................................7 Section 4.3 NLAG Authorization..............................................7 Section 4.4 Purchaser Authorization.........................................7 Section 4.5 Knowledge.......................................................7 Section 4.6 Investment......................................................7 Section 4.7 Resale Restrictions.............................................7 Section 4.8 Exemption from the Securities Act...............................8 Section 4.9 Ownership.......................................................8 ARTICLE 5. CONDITIONS......................................................8 Section 5.1 Conditions to Closing of NLAG and Purchasers....................8 Section 5.2 Conditions to Closing of the Company...........................10 ARTICLE 6. POST-CLOSING COVENANTS.........................................12 Section 6.1 Board Actions..................................................12 Section 6.2 Litigation.....................................................13 Section 6.3 NASDAQ Listing.................................................13 ARTICLE 7. RESTRICTIVE LEGEND.............................................13 ARTICLE 8. TERMINATION....................................................13 Section 8.1 Grounds For Termination........................................13 Section 8.2 Effect of Termination..........................................14 ARTICLE 9. INDEMNIFICATION................................................14 Section 9.1 Indemnification by Company.....................................14 Section 9.2 Indemnification by Purchasers and NLAG.........................14 Section 9.3 Nonexclusive...................................................15 Section 9.4 Knowledge......................................................15 Section 9.5 Survival.......................................................15 ARTICLE 10. MISCELLANEOUS..................................................15 Section 10.1 Governing Law..................................................15 Section 10.2 Successors and Assigns.........................................15 Section 10.3 Entire Agreement; Amendment....................................15 Section 10.4 Notices, etc...................................................15 Section 10.5 Understanding Among Purchasers.................................16 Section 10.6 Delays or Omissions............................................16 Section 10.7 Severability...................................................16 Section 10.8 Titles and Subtitles...........................................16 Section 10.9 Counterparts...................................................16 Section 10.10 Standstill Agreement...........................................16 Section 10.11 No Personal Liability of Representatives.......................17 Section 10.12 Expenses.......................................................18 SCHEDULES AND EXHIBITS Schedule of Exceptions Schedule of Purchasers Schedule 4.9 Schedule 10.12 Exhibit A Amended and Restated Articles Exhibit B Form of Opinion of Kelly Lytton & Vann LLP Exhibit C NLAG Registration Rights Agreement Exhibit D Jimirro Employment Agreement Exhibit E Termination Agreement Exhibit F Release Agreement Exhibit G Voting Agreement Exhibit H Amended and Restated Bylaws Exhibit I Greenberg Warrant Agreement Exhibit J GTH Warrant Agreement Exhibit K Jimirro Security Agreement Exhibit L-1 Absolute Assignment (Van Wilder) Exhibit L-2 Notice of Assignment (Van Wilder) Exhibit M Jimirro Registration Rights Agreement Exhibit N Laikin Employment Agreement Exhibit O Common Stock Warrant Exhibit P Advisor Note Form PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT THIS PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT (this "Agreement"), dated as of April 25, 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: Article 1 AUTHORIZATION; SALE OF SHARES AND WARRANTS; OPTION GRANT Section 1.1 Authorization of the Shares and Warrants. Subject to the approval of the shareholders of the Company becoming effective in accordance with Section 1.4, the Company has authorized the issuance and sale pursuant to this Agreement of up to Sixty Four Thousand Five Hundred (64,500) shares (the "Shares") of its Series B Convertible Preferred Stock, no par value per share (the "Series B Preferred"), having the preferences and rights set forth in the Company's proposed Second Amended and Restated Articles of Incorporation (the "Amended and Restated Articles"), the form of which are attached hereto as Exhibit A, together with warrants to purchase up to One Million Eight Hundred Sixteen Thousand Nine Hundred One (1,816,901) shares of no par value Common Stock of the Company (as hereinafter defined, the "Common Stock") at a purchase price (subject to adjustment as provided in the Warrant Agreement) of Three Dollars and Fifty-Five Cents ($3.55) per share until the second anniversary of the date of issuance thereof and Five Dollars ($5.00) per share on and after such date (the "Warrants") in accordance with the form of Common Stock Warrant attached hereto as Exhibit O (the "Warrant Agreement"). The Shares and the Warrants being sold hereunder are being sold in units consisting of (a) one Share of Series B Preferred and (b) a Warrant to purchase 28.169 shares of Common Stock (together, and subject to adjustment as provided herein or in the Warrant Agreement, a "Unit"). The number of Units that will be sold at the Closing as contemplated by Section 1.2 hereof will be Thirty-Five Thousand Two Hundred Forty-Four (35,244) Units (the "Purchased Units") and the remaining Twenty-Nine Thousand Two Hundred Fifty-Six (29,256) Units (the "Option Units") may be sold in the manner described in Section 1.3 hereof. Section 1.2 Sale of the Units. Subject to the approval of the shareholders of the Company becoming effective in accordance with Section 1.4 and the other terms and conditions hereof, and in reliance upon the representations, warranties and agreements contained herein, the Company will issue and sell to each Purchaser, and each Purchaser will purchase from the Company at the Closing (as hereinafter defined) the number of Units set forth opposite such Purchaser's name on the Schedule of Purchasers attached hereto (the "Schedule of Purchasers"), in each case at a purchase price per Unit of $100.00 and for the aggregate purchase price set forth opposite such Purchaser's name on the Schedule of Purchasers. Section 1.3 Option to Purchase Additional Units. Subject to the approval of the shareholders of the Company becoming effective in accordance with Section 1.4, the Company has authorized and hereby grants to NLAG, or NLAG's designees, effective upon the Closing, an option (the "Option") to purchase from the Company for cash up to all or any of the Option Units for a purchase price of $100.00 per Unit, subject to adjustment as provided in this Section. The Option may be exercised in whole or in part at any time, and from time to time, prior to the earliest of (a) January 25, 2003, or (b) ninety (90) days after the Company's shares are relisted for trading on the NASDAQ Small Cap Market or listed on any other national exchange or quotation system. The Option shall be deemed exercised when the Company has received (i) written notice of such exercise from NLAG or NLAG's designees and (ii) payment of the option purchase price for all Option Units as to which this Option is exercised. Upon (and as a part of) exercise of all or any part of the Option as provided in this Section, the Company shall promptly issue and deliver to each purchaser a certificate or certificates for the number of Shares and a Warrant Agreement for the number of Warrants to be issued upon such exercise. The Option shall be deemed to be exercised at the close of business on the date the Option is exercised and the purchaser of the Option Units shall be treated for all purposes as the record holder of the Shares being purchased on such date. Holders of Warrants shall have no rights with respect to shares of Common Stock issuable upon exercise of such Warrants until such Warrants have been duly exercised pursuant to the terms and conditions thereof. The Company shall make or provide for such adjustments in the numbers of Option Units, in the price per Option Unit applicable to the Option, and in the kind and number of Shares and Warrants covered by the Option, as is equitably required to prevent dilution or enlargement of the rights of NLAG or its designees that otherwise would result from any stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company or any other corporate transaction or event having a similar effect. Upon exercise of all or any part of the Option and before any Shares or Warrants are issued pursuant to such exercise, the purchasers of the Option Units (the "Option Purchasers") shall make representations and warranties to the Company substantially similar to those made by each Purchaser in Article 4 of this Agreement and agree to indemnify the Company for breaches thereof pursuant to an indemnity substantially similar to that contained in Section 9.2 of this Agreement, in each case in a form reasonably satisfactory to the Company and its legal counsel. Section 1.4 Shareholder Consent and Information Statement. Concurrently with the execution of this Agreement, shareholders of the Company entitled to vote in excess of a majority of the outstanding shares of the Company's Common Stock have acted by written consent to approve (i) the issuance of the Units and the Option Units, (ii) the grant of the Option, (iii) the adoption of the Amended and Restated Articles of the Company (as defined in Section 5), (iv) the adoption of the Amended and Restated Bylaws of the Company (as defined in Section 5), (v) the Second Amended and Restated 1999 Stock Option, Deferred Stock and Restricted Stock Plan, which plan was approved by the Company's Board of Directors on January 30, 2002, (vi) the grant to James P. Jimirro ("Jimirro") of an option to purchase 400,000 shares of the Company's Common Stock, which grant was approved by the disinterested members of the Company's Board of Directors on January 30, 2002 and was made as of such date (the "Jimirro Option") with vesting subject, among other things, to approval of the Company's shareholders, and (vii) the terms and the Company's entry into of the Jimirro Employment Agreement, the Jimirro Security Agreement, the Jimirro Registration Rights Agreement, and the Jimirro Indemnity Agreement (each as defined in Section 5) (collectively, the "Shareholder Consent"). The Shareholder Consent is conditioned upon the consummation of the transactions contemplated by this Agreement. The Shareholder Consent has been delivered to the Secretary of the Company. The Shareholder Consent shall become effective on the date 21 days after the mailing of the Definitive Information Statement (as defined below) to the shareholders of the Company as provided below. In connection with the Shareholder Consent, the Company shall prepare and file an amendment to the preliminary information statement submitted to the Securities and Exchange Commission (the "SEC") relating to the matters covered by the Shareholder Consent (the "Preliminary Information Statement Amendment") with the SEC and shall use its best efforts to respond to comments of the members of the SEC's staff and to cause a definitive information statement to be mailed to the Company's shareholders (the "Definitive Information Statement"), all as soon as reasonably possible; provided that prior to the filing of each of the Preliminary Information Statement Amendment and the Definitive Information Statement, the Company shall consult with NLAG and the Purchasers with respect to such filings and shall afford NLAG and the Purchasers a reasonable opportunity to comment thereon. The Company shall promptly notify NLAG and the Purchasers of the receipt of the comments of the members of the SEC's staff and of any request from the members of the SEC's staff for amendments or supplements to the Preliminary Information Statement or the Definitive Information Statement or for additional information, and will promptly supply NLAG and the Purchasers with copies of correspondence between the Company or its representatives, on the one hand, and the SEC or members of the SEC's staff, on the other hand, with respect to the Preliminary Information Statement, the Definitive Information Statement or this Agreement. If at any time prior to the effectiveness of the Shareholder Consent any event should occur which is required by applicable law to be set forth in an amendment of, or a supplement to, the Definitive Information Statement, the Company will promptly inform NLAG and the Purchasers of such event. In such case the Company will, upon learning of such event, promptly prepare and mail such amendment or supplement; provided, that prior to such mailing the Company shall consult with NLAG and the Purchasers with respect to such amendment or supplement and shall afford NLAG and the Purchasers a reasonable opportunity to comment thereon. The Company will notify NLAG and the Purchasers at least 24 hours prior to the mailing of the Definitive Information Statement, or any amendment or supplement thereto, to the shareholders of the Company. Section 1.5 Purchaser Designee. Timothy S. Durham, one of the Purchasers, may allocate the right and obligation to purchase up to 2,500 of the Units he is obligated to purchase at the Closing to one or more persons or entities who, prior to or at the Closing, must become a party or parties to and be bound by (a) this Agreement as a Purchaser or Purchasers, and (b) all agreements and instruments to be executed and delivered by the Purchasers as contemplated by this Agreement. This Agreement (including without limitation Schedule 4.9) and all other agreements and instruments to be executed and delivered by the Purchasers will be revised as necessary to accommodate the addition of such new Purchaser(s) and to add appropriate information as to any such additional Purchasers designated by Timothy S. Durham. Article 2. CLOSING; DELIVERY Section 2.1 Closing. The closing of the purchase and issuance of the Shares and Warrants and the grant of the Option hereunder (the "Closing") shall be held at the offices of Latham & Watkins in Los Angeles at 10 A.M., P.S.T., on the business day after all of the conditions to the respective obligations of the Parties set forth in Article 5 shall have been satisfied or waived or on such other business day thereafter on or prior to the Termination Date (as defined below) as may be agreed upon by the Parties (the "Closing Date"). Each Party shall use commercially reasonable efforts to (i) take or cause to be taken all actions, and do or cause to be done all things, which are necessary, proper or advisable to cause any other Party's conditions set forth in Article 5 to be fully satisfied (but not waived) (including, without limitation, executing and delivering the documents provided for therein to which it is a party in the forms attached hereto as Exhibits) and (ii) consummate and make effective as promptly as practicable the transactions contemplated by this Agreement. Section 2.2 Delivery. At the Closing, in addition to each Party making such deliveries and taking such actions as are required to satisfy its obligations under Section 2.1 or elsewhere in this Agreement, the Company will deliver to each of the Purchasers a certificate or certificates and Warrant Agreement(s) (in definitive form) in such denominations and registered in each Purchaser's name, as set forth in the Schedule of Purchasers, representing, respectively, the number of Shares of Series B Preferred and the number of Warrants to be purchased by each of the Purchasers from the Company against payment of the purchase price therefor by wire transfer of immediately available funds, or such other form of payment as shall be mutually agreed upon by the Purchasers and the Company. As noted on the Schedule of Purchasers, the purchase price for $450,000 of the Units to be purchased pursuant to this Agreement has previously been paid to the Company as fees for extensions of the Letter Agreement, dated March 5, 2001, among the Company and certain of the Purchasers (the "March Letter Agreement"). In addition, each of the Purchasers may take credit against the purchase price owed for such Purchaser's Units for expenses paid directly by such Purchaser which the Company is obligated to pay under Section 10.12 in the amounts shown on the Schedule of Purchasers (the "Purchaser Expenses"). The value of the Purchaser Expenses being credited to each Purchaser against the purchase price for the Units being purchased (or to be purchased) by such Purchaser shall be the amount set forth next to the name of such Purchaser in the appropriate section of the Schedule of Purchasers attached hereto. The amounts of Purchaser Expenses shown on the Schedule of Purchasers have been approved by the Company and no further approval of such amounts shall be necessary. Article 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY Except to the extent set forth on the Company's Schedule of Exceptions attached hereto with respect to only those sections of this Agreement specified therein (the "Schedule of Exceptions"), which Schedule of Exceptions contains, with respect to each matter disclosed therein, a specific reference to the representation and warranty to which such matter is an exception, the Company hereby represents and warrants to NLAG, the Purchasers and the Option Purchasers as follows: Section 3.1 Organization and Standing; Articles and Bylaws. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of California. The Company has furnished the Purchasers with complete and correct copies of its Articles of Incorporation and Bylaws as in effect immediately prior to the date of this Agreement. Section 3.2 Corporate Power; Authority. The Company has all requisite corporate power and authority to enter into this Agreement, the NLAG Registration Rights Agreement, the Jimirro Registration Rights Agreement, the Note Termination Agreement, the Termination Agreement, the Release Agreement, the Jimirro Employment Agreement, the Jimirro Indemnity Agreement, the Jimirro Security Agreement, and the Van Wilder Assignment Documents (in each case, as defined in Article 5) and the Company will have at the Closing Date all requisite corporate power to issue and sell the Shares and the Warrants, to issue the Common Stock (as defined in Section 3.3) initially issuable upon conversion of the Shares and the Option Shares (as defined below) (the "Conversion Shares") or upon exercise of the Warrants (the "Warrant Shares"), to grant the Option, to issue the shares of Series B Preferred issuable upon exercise of the Option (the "Option Shares"), to issue the Warrants issuable upon the exercise of the Option, and to carry out and perform its obligations under the terms of this Agreement, the NLAG Registration Rights Agreement, the Jimirro Registration Rights Agreement, the Note Termination Agreement, the Termination Agreement, the Release Agreement, the Jimirro Employment Agreement, the Jimirro Indemnity Agreement, the Jimirro Security Agreement, each Warrant Agreement and the Van Wilder Assignment Documents and all other agreements contemplated hereby to which the Company is to be a party (collectively, the "Company Relevant Documents"). All corporate action on the part of the Company, its directors and shareholders necessary for the due authorization, execution, delivery and performance by the Company of the Company Relevant Documents, the approval, adoption and filing with the Secretary of State of the State of California of the Amended and Restated Articles and the approval and adoption of the Amended and Restated Bylaws and the consummation of the transactions contemplated herein and therein, and for the grant of the Option and the due authorization, issuance and delivery of the Warrants, the Shares, the Option Shares, the Warrant Shares and the Conversion Shares, has been taken or will be taken prior to the Closing. Each Company Relevant Document is a legal, valid and binding obligation of the Company, enforceable in accordance with its respective terms, subject to applicable bankruptcy, insolvency, reorganization and moratorium laws and other laws of general application affecting enforcement of creditors' rights generally. Section 3.3 Capitalization. As of the Closing and immediately thereafter, the Company's authorized capital stock shall consist of: (a) 15,000,000 shares of Common Stock, no par value per share (the "Common Stock"), of which 1,382,483 shares shall be issued and outstanding, 1,500,000 shares shall be reserved for issuance upon exercise of stock options, 1,926,929 shares shall be reserved for issuance upon conversion of the Series B Preferred, and 1,816,901 shares shall be reserved for issuance upon exercise of the Warrants and (b) 68,406 shares of Series B Preferred, of which the Purchased Shares shall be issued and outstanding, a number of shares equal to the number of the Option Units shall be reserved for issuance upon exercise of the Option, and 3,906 shares shall be reserved for issuance upon exercise of the warrants contemplated by the Greenberg Warrant Agreement and the GTH Warrant Agreement (each as defined below). All the aforesaid issued and outstanding shares are duly authorized and validly issued, fully paid and nonassessable and have been offered, issued, sold and delivered by the Company in compliance with all applicable federal and state securities laws. Except as disclosed on the Schedule of Exceptions and except for the Greenberg Warrant Agreement, the GTH Warrant Agreement, the Option Units and the Warrants, there are no outstanding (i) preemptive, conversion or other rights, options, warrants or agreements granted or issued by or binding upon the Company or any subsidiary of the Company for the purchase or acquisition of any shares of its capital stock, except with respect to the Series B Preferred in accordance with the provisions of this Agreement and the Amended and Restated Articles, (ii) phantom equity, equity appreciation or similar rights which permit the holder thereof to participate in the residual equity value of, or appreciation in the equity value of, the Company, (iii) any securities, instruments or rights which permit the holder thereof, under any circumstances, to vote for the election of members of the Company's Board of Directors or (iv) any securities, instruments or rights which are, directly or indirectly, convertible into or exercisable or exchangeable for any of the securities, instruments or rights described in clause (i), (ii) or (iii) above. The Administrator (as defined therein) has not elected to cash out by payment of cash or other property any outstanding stock options, restricted stock or deferred stock awards under Section 10.1(c) of the Company's 1999 Stock Option, Deferred Stock and Restricted Stock Plan as a result of the consummation of the transactions contemplated by this Agreement and the other agreements entered into in connection herewith and there are no outstanding rights to any such payments on the part of any holders of stock options, restricted stock or deferred stock awards under such Plan. As of the Closing, the Board of Directors of the Company has the right under the Rights Agreement of the Company, dated as of July 15, 1999, as amended (the "Rights Plan") to redeem all outstanding Rights (as defined therein) without the approval, consent or waiver of any person or entity. As of the Closing, the Company has taken all action necessary under the Rights Plan to redeem all outstanding Rights (as defined therein). As of the Closing, all Rights issued under the Rights Plan have been redeemed and the Rights Plan terminated, and the only remaining right of any shareholder of the Company or any person who held Rights immediately prior to their redemption in connection with the Rights Plan will be the right to receive the Redemption Price (as defined in the Rights Plan). No Common Shares or Preferred Shares (each as defined in the Rights Plan) have been issued or following the redemption of the Rights and the termination of the Rights Plan will be issuable under the Rights Plan. Since July 15, 1999, no Trigger Event, Distribution Date or Share Acquisition Date (each as defined in the Rights Plan) has occurred and at no time has any person become an Acquiring Person (as defined in the Rights Plan). The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby or in connection herewith will not result in or cause (i) a breach of the Rights Plan, (ii) the occurrence of a Trigger Event, Distribution Date or Share Acquisition Date or (iii) any person to become an Acquiring Person. Section 3.4 Validity of the Shares, Option Shares, Conversion Shares, Warrants and Warrant Shares; No Conflict. The Shares, the Option Shares, the Conversion Shares, the Warrants and the Warrant Shares, when issued in compliance with the provisions of this Agreement, will be validly issued, fully paid and nonassessable, and will be free of any liens, claims, preemptive rights or any other encumbrances of any kind or nature whatsoever, except for any applicable restrictions imposed by federal or state securities laws. The Conversion Shares, the Option Shares and the Warrant Shares have been duly authorized and validly reserved, are not subject to any preemptive rights or rights of first refusal and, upon payment of the purchase price therefor and issuance in conformity with the Amended and Restated Articles, this Agreement and the applicable Warrant Agreement, as applicable, will be validly issued, fully paid and nonassessable, and will be free of any liens, claims, preemptive rights or any other encumbrances of any kind or nature whatsoever, except for any applicable restrictions imposed by federal or state securities laws. The execution, delivery and performance by the Company of each Company Relevant Document will not result in any violation of, or be in conflict with, or result in a breach of, or constitute a default under, (a) any term or provision of any state or Federal law or regulation to which the Company is subject and which are generally applicable to transactions of the type contemplated by this Agreement, or (b) the Company's Articles of Incorporation or Bylaws, as amended and restated and in effect on the date hereof, or (c) any material agreement to which the Company is a party or by which it is bound, except, in the case of clause (a) and (c) above, for violations, conflicts, breaches or defaults which would not have a material adverse effect on the business, operations, properties, financial condition, assets or liabilities of the Company. Section 3.5 Financial Information. The audited consolidated financial statements of the Company and its subsidiaries (including the notes to such financial statements) included in the Company's Annual Report on Form 10-K for the year ended July 31, 2001 (the "Form 10-K") and the unaudited interim financial statements of the Company and it subsidiaries included in the Company's Quarterly Report on Form 10-Q for the six month period ended October 31, 2001 (the "Form 10-Q") filed pursuant to the Securities Exchange Act of 1934, as amended, present fairly the financial condition and operating results of the Company and it subsidiaries at the dates and for the periods to which they relate (subject, in the case of the unaudited interim financial statements, to normal year-end audit adjustments and any other adjustments described therein), have been prepared in accordance with generally accepted accounting principles ("GAAP") consistently followed throughout the periods involved (except as may be indicated therein or in the notes thereto). Section 3.6 SEC Reports. Other than as specified in the Schedule of Exceptions, the Form 10-K and Form 10-Q did not, on the dates of their respective filing, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. Section 3.7 Affiliate Arrangements. Except as set forth in the Schedule of Exceptions, there are no contractual or other arrangements, whether written or oral, between the Company, or any subsidiary of the Company, and any officer or director of the Company or any of their respective spouses or relatives (or any entity controlled by any such persons). Article 4. REPRESENTATIONS, WARRANTIES OF NLAG AND PURCHASERS NLAG, with respect to information about itself only, and each of the Purchasers, with respect to information about themselves only, represent and warrant to the Company as follows: Section 4.1 Organization and Standing. NLAG is a limited liability company duly organized, validly existing and in good standing under the laws of the State of California. Section 4.2 Power. NLAG has all requisite power and authority to enter into this Agreement, the Release Agreement and all other agreements contemplated hereby to which NLAG is to be a party (collectively, the "NLAG Relevant Documents"). Each of the Purchasers has all requisite power and authority to enter into this Agreement, the Release Agreement and all other agreements contemplated hereby to which such Purchaser is to be a party (collectively, the "Purchaser Relevant Documents"). Section 4.3 NLAG Authorization. NLAG has taken, or at the Closing will have taken, all actions necessary to authorize it (i) to perform all of its obligations under the NLAG Relevant Documents and (ii) to consummate the transactions contemplated hereby and thereby. The NLAG Relevant Documents are legally valid and binding obligations of NLAG enforceable against it in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization and moratorium laws and other laws of general application affecting enforcement of creditors' rights generally. Section 4.4 Purchaser Authorization. Such Purchaser has taken, or at the Closing will have taken, all actions necessary to authorize it (i) to perform all of its obligations under the Purchaser Relevant Documents and (ii) to consummate the transactions contemplated hereby and thereby. The Purchaser Relevant Documents are legally valid and binding obligations of such Purchaser enforceable against it in accordance with their respective terms, subject to applicable bankruptcy, insolvency, reorganization and moratorium laws and other laws of general application affecting enforcement of creditors' rights generally. Section 4.5 Knowledge. Such Purchaser is an "accredited investor" as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act") and has such knowledge and experience in financial business matters as to be capable of evaluating the merits and risks of its investment, has no need for liquidity in its investment and has the ability to bear the economic risks of its investment. Section 4.6 Investment. Such Purchaser is acquiring the Shares, the Option Shares, the Conversion Shares, the Warrants and the Warrant Shares to be purchased by it for investment for its own account and not with the view to, or for resale in connection with, any public distribution thereof. Such Purchaser understands that the Shares, the Option Shares, the Conversion Shares, the Warrants and the Warrant Shares have not been registered under the Securities Act or under any state securities laws by reason of a specified exemption from the registration provisions of the Securities Act and such state securities laws which depends upon, among other things, the bona fide nature of such Purchaser's investment intent as expressed herein. Section 4.7 Resale Restrictions. Such Purchaser acknowledges that the Shares, the Option Shares, the Conversion Shares, the Warrants and the Warrant Shares acquired by it must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Section 4.8 Exemption from the Securities Act. The offer and sale by the Company of the Shares, the Option Shares, the Conversion Shares, the Warrants and the Warrant Shares to the Purchasers, as contemplated by this Agreement, qualifies for exemption from the registration requirements of the Securities Act, without limitation, pursuant to the requirements of Rule 506 promulgated thereunder insofar as such requirements apply to the purchasers of securities in a transaction relying on such rule for an exemption from the registration requirements of the Securities Act. Section 4.9 Ownership. NLAG and each Purchaser represents and warrants that except as otherwise provided on Schedule 4.9 attached hereto the number of Common Shares of the Company reported as beneficially owned by it in the Schedule 13D/A filed collectively on January 31, 2002 was accurate on the date of the filing of such schedule and remains accurate as of the date hereof (or as updated prior to the Closing on account of additional Common Shares acquired as permitted by Section 10.10). Article 5. CONDITIONS Section 5.1 Conditions to Closing of NLAG and Purchasers. Each Purchaser's obligation to purchase the Units to be purchased by it at the Closing and NLAG's obligation to sign the Release Agreement are subject to the fulfillment to their respective satisfaction on or prior to the Closing of each of the following conditions: 5.1.1 Representations and Warranties Correct. The representations and warranties made by the Company herein and pursuant hereto shall have been true and correct in all respects when made and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made at and as of the Closing Date. 5.1.2 Performance. The Company shall have materially complied with all covenants, agreements and conditions contained in this Agreement to be performed or complied with by the Company on or prior to the Closing and at such time the Company shall not be in default in the performance of or compliance with any of the provisions of this Agreement. 5.1.3 No Adverse Proceedings. No action, suit or proceeding before any court, tribunal, arbitrator, authority, agency, commission or other instrumentality of the United States or any state, county, city or other political subdivision ("Governmental Authority") shall have been commenced, no investigation by any Governmental Authority shall have been commenced, and no action, suit or proceeding by any Governmental Authority shall have been threatened, against any of the Parties, in each case which remains unresolved wherein an unfavorable judgment, order, decree, stipulation, ruling, charge or injunction would (i) prevent consummation of any of the transactions contemplated by this Agreement, the NLAG Registration Rights Agreement, the Note Termination Agreement, the Termination Agreement, the Release Agreement, the Jimirro Employment Agreement, the Jimirro Indemnity Agreement and the Voting Agreement (each as defined below), or (ii) cause any of the transactions contemplated by such documents to be rescinded following consummation (and no such judgment, order, decree, stipulation, ruling, charge or injunction shall be in effect). 5.1.4 Definitive Information Statement. Twenty-one (21) days shall have elapsed since the mailing of the Definitive Information Statement to the shareholders of the Company. 5.1.5 Opinion of Company's Counsel. Purchasers shall have received from Kelly Lytton & Vann LLP, counsel to the Company, an opinion addressed to the Purchasers, dated the date of the Closing, and in substantially the form attached as Exhibit B hereto (which opinion shall provide that each Option Purchaser shall be permitted to rely thereon). 5.1.6 NLAG Registration Rights Agreement. The Company, NLAG and the Purchasers shall have duly executed and delivered the NLAG Registration Rights Agreement substantially in the form of Exhibit C hereto (the "NLAG Registration Rights Agreement"). 5.1.7 Note Termination Agreement. The Company and Jimirro shall have entered into the agreement (the "Note Termination Agreement") substantially in the form attached to the Jimirro Employment Agreement as Exhibit A thereto. 5.1.8 Jimirro Employment Agreement. The Company and Jimirro shall have duly executed and delivered the Amended and Restated Employment Agreement substantially in the form of Exhibit D hereto (the "Jimirro Employment Agreement"). 5.1.9 Termination Agreement. The Company, Jimirro, Daniel S. Laikin ("Laikin") and Paul Skjodt ("Skjodt") shall have duly executed and delivered the Termination Agreement (the "Termination Agreement"), substantially in the form of Exhibit E hereto, terminating the March Letter Agreement. 5.1.10 Release Agreement. The Company, NLAG, Jimirro, Laikin, Skjodt, Timothy S. Durham, Samerian LLP, Diamond Investments, LLC, Christopher R. Williams, Helen C. Williams, DW Leasing Company, LLC and Judy B. Laikin shall have duly executed and delivered the Mutual Release Agreement substantially in the form of Exhibit F hereto (the "Release Agreement"). 5.1.11 Voting Agreement. Jimirro, Laikin, Skjodt, Timothy S. Durham, Samerian LLP, Diamond Investments, LLC, Christopher R. Williams, Helen C. Williams, DW Leasing Company, LLC, Judy B. Laikin and the Purchasers shall have duly executed and delivered the Voting Agreement substantially in the form of Exhibit G hereto (the "Voting Agreement"). 5.1.12 Amended and Restated Articles. The Amended and Restated Articles shall have been duly adopted by the Board of Directors and the shareholders of the Company, shall have been duly filed with the Secretary of State of the State of California, shall be in full force and effect and shall not have been amended. 5.1.13 Amended and Restated Bylaws. The Amended and Restated Bylaws of the Company, in the form attached hereto as Exhibit H (the "Amended and Restated Bylaws"), shall have been duly adopted by the Board of Directors and the shareholders of the Company, shall be in full force and effect and shall not have been amended. 5.1.14 Greenberg Warrant Agreement. The Company and Greenberg Traurig, LLP shall have duly executed and delivered the Warrant Agreement substantially in the form of Exhibit I hereto (the "Greenberg Warrant Agreement"). 5.1.15 GTH Warrant Agreement. The Company and GTH Capital, Inc. shall have duly executed and delivered the Warrant Agreement substantially in the form of Exhibit J hereto (the "GTH Warrant Agreement"). 5.1.16 Good Standing Certificate. The Company shall have delivered to the Purchasers evidence of its good standing as a domestic corporation in the State of California. 5.1.17 Compliance Certificate. The Company shall certify to the Purchasers that the conditions in Sections 5.1.1, 5.1.2, 5.1.4, 5.1.12 and 5.1.13 have been satisfied. 5.1.18 Resignations. Gary Cowan and John De Simio shall have each resigned as Directors of the Company. 5.1.19 Expenses. Each of Latham & Watkins, Gibson, Dunn & Crutcher LLP, Kelly Lytton & Vann LLP and Batchelder & Partners, Inc., and each of the persons who employed those advisors, shall have acknowledged in writing that all fees incurred by such advisors through the Closing that are payable by the Company under Section 10.12 have been paid in full, subject to payment when due of the amount of the promissory note (and interest thereon) issued by the Company to any such advisor at Closing in accordance with Schedule 10.12. 5.1.20 Van Wilder Assignment Documents. The Company shall have duly executed and delivered an Absolute Assignment substantially in the form attached as Exhibit L-1 hereto and the Company and each applicable account debtor shall have duly executed and delivered a Notice of Assignment and Irrevocable Direction to Pay and Account substantially in the form attached as Exhibit L-2 hereto or otherwise reasonably satisfactory to NLAG, the Company and Jimirro (collectively, the "Van Wilder Assignment Documents"). Section 5.2 Conditions to Closing of the Company. The Company's obligations to sell the Units to be purchased by each Purchaser and to grant the Option at the Closing are subject to the fulfillment to the their respective satisfaction on or prior to the Closing Date of the following conditions: 5.2.1 Representations and Warranties Correct. The representations and warranties made by such Purchaser and NLAG herein and pursuant hereto shall have been true and correct in all respects when made and shall be true and correct in all material respects on the Closing Date with the same force and effect as if they had been made at and as of the Closing Date. 5.2.2 Performance. Such Purchaser and NLAG shall have materially complied with all covenants, agreements and conditions contained in this Agreement to be performed or complied with by such Purchaser or NLAG on or prior to the Closing and at such time such Purchaser and NLAG shall not be in default in the performance of or compliance with any of the provisions of this Agreement. 5.2.3 No Adverse Proceedings. No action, suit or proceeding before any Governmental Authority shall have been commenced, no investigation by any Governmental Authority shall have been commenced, and no action, suit or proceeding by any Governmental Authority shall have been threatened, against any of the Parties, in each case which remains unresolved wherein an unfavorable judgment, order, decree, stipulation, ruling, charge or injunction would (i) prevent consummation of any of the transactions contemplated by this Agreement, the Jimirro Employment Agreement, the Jimirro Indemnity Agreement, the Van Wilder Assignment Documents, the Jimirro Security Agreement (as defined below), the Jimirro Registration Rights Agreement, the Note Termination Agreement, the Termination Agreement, and the Release Agreement, or (ii) cause any of the transactions contemplated by such documents to be rescinded following consummation (and no such judgment, order, decree, stipulation, ruling, charge or injunction shall be in effect). 5.2.4 Definitive Information Statement. Twenty-one (21) days shall have elapsed since the mailing of the Definitive Information Statement to the shareholders of the Company. 5.2.5 Note Termination Agreement. The Company and Jimirro shall have duly executed and delivered the Note Termination Agreement. 5.2.6 Jimirro Employment Agreement. The Company and Jimirro shall have duly executed and delivered the Jimirro Employment Agreement. 5.2.7 Termination Agreement. The Company, Jimirro, Laikin and Skjodt shall have duly executed and delivered the Termination Agreement. 5.2.8 Release Agreement. The Company, NLAG, Jimirro, Laikin, Skjodt, Timothy S. Durham, Samerian LLP, Diamond Investments, LLC, Christopher R. Williams, Helen C. Williams, DW Leasing Company, LLC and Judy B. Laikin shall have duly executed and delivered the Release Agreement. 5.2.9 Amended and Restated Articles. The Amended and Restated Articles of the Company shall have been duly adopted by the Board of Directors and the shareholders of the Company, shall have been duly filed with the Secretary of State of the State of California, shall be in full force and effect and shall not have been amended. 5.2.10 Amended and Restated Bylaws. The Amended and Restated Bylaws of the Company shall have been duly adopted by the Board of Directors and the shareholders of the Company, shall be in full force and effect and shall not have been amended. 5.2.11 Greenberg Warrant Agreement. The Company and Greenberg Traurig, LLP shall have duly executed and delivered the Greenberg Warrant Agreement. 5.2.12 GTH Warrant Agreement. The Company and GTH Capital, Inc. shall have duly executed and delivered the GTH Warrant Agreement. 5.2.13 Jimirro Security Agreement. The Company and Jimirro shall have duly executed and delivered the Security Agreement substantially in the form of Exhibit K hereto (the "Jimirro Security Agreement"). 5.2.14 Van Wilder Assignment Documents. The Company shall have duly executed and delivered an Absolute Assignment substantially in the form attached as Exhibit L-1 hereto and the Company and each applicable account debtor shall have duly executed and delivered a Notice of Assignment and Irrevocable Direction to Pay and Account substantially in the form attached as Exhibit L-2 hereto or otherwise reasonably satisfactory to NLAG, the Company and Jimirro (collectively, the "Van Wilder Assignment Documents"). 5.2.15 Jimirro Registration Rights Agreement. The Company and Jimirro shall have duly executed and delivered the Jimirro Registration Rights Agreement substantially in the form of Exhibit M hereto (the "Jimirro Registration Rights Agreement"). 5.2.16 Jimirro Indemnity Agreement. The Company and Jimirro shall have duly executed and delivered the Indemnity Agreement attached to the Jimirro Employment Agreement as Exhibit B thereto (the "Jimirro Indemnity Agreement"). 5.2.17 Good Standing Certificate. NLAG shall have delivered to the Company evidence of its good standing as a limited liability company in the State of California. 5.2.18 Compliance Certificate. NLAG, as representative of the Purchasers, shall certify to the Company that the conditions in Sections 5.2.1 and 5.2.2 have been satisfied. 5.2.19 Expenses. Each of the advisors listed on Schedule 10.12, and each of the persons who employed those advisors, shall have acknowledged in writing that all fees incurred by such advisors through the Closing that are payable by the Company under Section 10.12 have been paid in full, subject to payment when due of the amount of the promissory note (and interest thereon) issued by the Company to any such advisor at Closing in accordance with Schedule 10.12. Article 6. POST-CLOSING COVENANTS Each of the Parties agree to use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable laws, rules and regulations to cause the following to occur immediately following the Closing: Section 6.1 Board Actions. 6.1.1 Appointments. Timothy S. Durham, Skjodt and an independent director to be designated pursuant to the Voting Agreement shall be appointed to the Board of Directors of the Company. 6.1.2 Ratification. The new Board of Directors of the Company shall ratify the transactions contemplated by this Agreement (including, without limitation, the documents attached as exhibits hereto) and all prior actions of the Company's Board of Directors and officers taken as of the Closing. 6.1.3 Officer Elections. Laikin shall be elected as Chief Operating Officer of the Company, reporting solely to the Board of Directors of the Company as a whole. 6.1.4 Annual Meeting and Record Date. The Board of Directors shall call the annual meeting (the "Annual Meeting") of the shareholders of the Company to be held on a date selected by the Chairman of the Board of Directors, but not later than June 15, 2002. The record date for determining shareholders entitled to vote at the annual meeting will be a date that is subsequent to but not later than two days after the Closing. In connection with such annual meeting the Company will request all record holders of the Company's voting securities who are nominees for other beneficial owners to certify as of the record date the number of shares and addresses of all beneficial owners whose shares are held by such nominees in accordance with Rules 14b-1(b)(3) and 14b-2(b)(3) promulgated under the Securities and Exchange Act of 1934. 6.1.5 Laikin Employment Agreement. The new Board of Directors of the Company shall approve, and the Company and Daniel S. Laikin shall execute and deliver, the Employment Agreement substantially in the form of Exhibit N hereto (the "Laikin Employment Agreement"). Section 6.2 Litigation. The Parties shall use their respective best efforts to have all outstanding litigation involving the parties dismissed with prejudice as to all parties thereto. Section 6.3 NASDAQ Listing. The Company will continue to involve Timothy S. Durham and his counsel in discussions with NASDAQ regarding the possible appeal of the revocation of the Company's NASDAQ listing and any efforts by the Company to relist its shares for trading on NASDAQ. Article 7. RESTRICTIVE LEGEND Each certificate representing (i) the Shares (including the Option Shares and the Warrant Shares), (ii) the Conversion Shares or (iii) any other securities issued in respect of such securities upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall (unless otherwise permitted or unless the securities evidenced by such certificate shall have been registered under the Securities Act or sold pursuant to Rule 144 or Regulation A thereunder) be stamped or otherwise imprinted with a legend in the following form (in addition to any legend required under applicable state securities laws): THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR ANY STATE SECURITIES LAWS. THEY MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAW OR AN EXEMPTION FROM SUCH REGISTRATION UNDER SAID ACT. Upon request of a holder of such a certificate, the Company shall remove the foregoing legend from the certificate or issue to such holder a new certificate therefor free of any transfer legend, if, with such request, the Company shall have received a written opinion of legal counsel who shall be reasonably satisfactory to the Company, addressed to the Company and reasonably satisfactory in form and substance to the Company's counsel, to the effect that such legend is not required in order to establish compliance with any provisions of the Securities Act. Article 8. TERMINATION Section 8.1 Grounds For Termination. This Agreement may, by written notice given prior to or at the Closing, be terminated: 8.1.1 By NLAG, if a breach of any provision of this Agreement has been committed by the Company and such breach has not been waived or has not been cured within five days of the date the Company receives written notice of such breach from NLAG or the Purchasers; 8.1.2 By the Company, if a breach of any provision of this Agreement has been committed by NLAG or any of the Purchasers and such breach has not been waived or has not been cured within five days of the date the breaching Party receives written notice of such breach from the Company; 8.1.3 By NLAG, if any of the conditions in Section 5.1 becomes impossible to satisfy (other than through the failure of NLAG or the Purchasers to comply with their obligations under this Agreement); 8.1.4 By the Company, if any of the conditions in Section 5.2 becomes impossible to satisfy (other than through the failure of the Company to comply with its obligations under this Agreement); 8.1.5 By mutual consent of NLAG, the Company and the Purchasers; or 8.1.6 By the Company, NLAG or the Purchasers, if the Closing has not occurred (other than through the failure of any Party seeking to terminate this Agreement to comply fully with its obligations under this Agreement) on or before the date thirty (30) days from the date of this Agreement (the "Termination Date"). Section 8.2 Effect of Termination. Each Party's right of termination under this Article 8 is in addition to any other rights it may have under this Agreement or otherwise, and the exercise of a right of termination will not be an election of remedies. If this Agreement is terminated pursuant to this Article 8, all further obligations of the Parties under this Agreement will terminate; provided, however, that if this Agreement is terminated by a Party because of the breach of this Agreement by another Party or because one or more of the conditions to the terminating Party's obligations under this Agreement is not satisfied as a result of another Party's failure to comply with its obligations under this Agreement, the terminating Party's right to pursue its legal remedies against the breaching or failing Party will survive such termination unimpaired. Article 9. INDEMNIFICATION Section 9.1 Indemnification by Company. If the Closing occurs, the Company hereby agrees to indemnify the Purchasers, NLAG and the Option Purchasers against and hold them harmless from any and all liabilities, losses, deficiencies, damages, expenses and costs (including, without limitation, reasonable counsel fees and costs and expenses incurred in the investigation, defense or settlement of any claims covered by this indemnity or incurred in connection with successfully asserting, proving or collecting indemnity payments pursuant to this Section with respect to matters not involving defense of third-party claims) accruing from or arising at any time as a result of or out of (a) any inaccuracies in or breaches of the representations, warranties, covenants, obligations or agreements made or to be complied with or performed by the Company pursuant to this Agreement or (b) any claims made by claimants who are not Parties to this Agreement alleging facts which, if true, would constitute a breach of or inaccuracy in a representation or warranty made by such Party herein. Section 9.2 Indemnification by Purchasers and NLAG. If the Closing occurs, each of the Purchasers, NLAG and each of the Option Purchasers hereby severally but not jointly agrees to indemnify the Company against and hold it harmless from any and all liabilities, losses, deficiencies, damages, expenses and costs (including, without limitation, reasonable counsel fees and costs and expenses incurred in the investigation, defense or settlement of any claims covered by this indemnity or incurred in connection with successfully asserting, proving or collecting indemnity payments pursuant to this Section with respect to matters not involving defense of third-party claims) accruing from or arising at any time as a result of or out of (a) any inaccuracies in or breaches of the representations, warranties, covenants, obligations or agreements made or to be complied with or performed by such Party pursuant to this Agreement or (b) any claims made by claimants who are not Parties to this Agreement alleging facts which, if true, would constitute a breach of or inaccuracy in a representation or warranty made by such Party herein. Section 9.3 Nonexclusive. The remedies provided in this Article 9 will not be exclusive of or limit any other remedies that may be available to the Parties. Section 9.4 Knowledge. The right to indemnification or other remedy based upon representations, warranties, covenants, or obligations in this Agreement will not be affected by any investigation conducted, or any knowledge acquired (or capable of being acquired), at any time with respect to the accuracy or inaccuracy of, or compliance with, any such representation, warranty, covenant, or obligation. Section 9.5 Survival. The Parties agree that all of their respective representations and warranties contained in this Agreement shall survive the Closing (even if the damaged Party knew or had reason to know of any misrepresentation or breach of warranty at the time of Closing) and shall continue in full force and effect for a period of eighteen (18) months. Article 10. MISCELLANEOUS Section 10.1 Governing Law. This Agreement shall be governed in all respects by the laws of the State of California, without giving effect to its principles or rules of conflicts of laws, to the extent that such principles or laws would require the application of the law of another jurisdiction. Section 10.2 Successors and Assigns. Except as otherwise expressly provided herein, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, heirs, executors and administrators of the Parties. Except as otherwise expressly provided herein and subject to the conditions hereof, no Party may assign such Party's rights or obligations under this Agreement. Section 10.3 Entire Agreement; Amendment. This Agreement (including the Schedules and Exhibits hereto) and the other documents delivered pursuant hereto constitute the full and entire understanding and agreement among the parties with regard to the subjects hereof and thereof and supersede any prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate in any way to the subject matter hereof. Neither this Agreement nor any term hereof may be amended, waived, discharged or terminated, except by a written instrument signed by the Company, NLAG and the holders of seventy percent (70%) or more of the Common Stock issued or issuable upon conversion of the Shares, but in no event shall the obligations of any Purchaser hereunder be increased, except upon such Purchaser's written consent. Section 10.4 Notices, etc. All notices and other communications required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt. All notices shall be addressed to the Company at its principal office, to NLAG at 111 Monument Circle, Suite 3680, Indianapolis IN 46204, to each Purchaser at the addresses set forth on the Schedule of Purchasers attached hereto, or to such other address as the Company, NLAG or each Purchaser shall have furnished to the other in writing, or if to any other holder of any Shares or any Common Stock issued upon conversion of Shares, to such address as such holder shall have furnished the Company in writing, or, until any such holder so furnishes an address to the Company, then to and at the address of the last holder thereof who has so furnished an address to the Company. Section 10.5 Understanding Among Purchasers. The determination by each of the Purchasers to purchase the Units pursuant to this Agreement has been made by such Purchaser independent of the other Purchasers and independent of any statements or opinions as to the advisability of such purchase or as to the properties, business, prospects or condition (financial or otherwise) of the Company which may have been made or given by the other Purchasers or by any agent or employee of the other Purchasers. In addition, it is acknowledged by each of the Purchasers that the other Purchasers have not acted as such Purchaser's agent in connection with making its investment hereunder and that the other Purchasers will not be acting as such Purchaser's agent in connection with monitoring such Purchaser's investment hereunder. Section 10.6 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any holder of any Shares or Warrants or the Option, upon any breach or default of the Company under this Agreement, shall impair any such right, power or remedy of such holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any holder of any breach or default under this Agreement, or any waiver on the part of any holder of any provisions or conditions of this Agreement must be made in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any holder, shall be cumulative and not alternative. Section 10.7 Severability. Whenever possible, each provision of this Agreement shall be interpreted in the manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or the effectiveness or validity of any provision in any other jurisdiction, and this Agreement shall be reformed, construed and enforced in the jurisdiction as if the invalid, illegal or unenforceable provision had never been contained herein. Section 10.8 Titles and Subtitles. The titles of the articles, sections and subsections of this Agreement are for convenience of reference only and are not to be considered in construing this Agreement. Section 10.9 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one and the same instrument. Section 10.10 Standstill Agreement. NLAG and each Purchaser agrees that until the earlier of (a) the Closing Date or (b) five (5) days after the termination of this Agreement pursuant to Article 8 hereof, other than with respect to the transactions contemplated by this Agreement, without the prior written consent of the Company, such Party will not, directly or indirectly: (i) acquire, offer to acquire, or agree to acquire, by purchase or otherwise, any voting securities or direct or indirect rights or options to acquire any voting securities of the Company exceeding, in the aggregate, on an as-exercised or as-converted basis if applicable, 50,000 shares of voting Common Stock of the Company; (ii) except at the specific written request of the Company, propose to enter into any merger or business combination involving the Company or to purchase a material portion of the assets of the Company; (iii) make, or in any way participate, in any "solicitation" of "proxies" to vote (as such terms are used in the proxy rules of the 1934 Act) or seek to advise or influence any person with respect to the voting of, any voting securities of the Company; (iv) solicit or permit any person or entity to join their "group" (within the meaning of Section 13(d)(3) of the 1934 Act) with respect to any voting securities of the Company; (v) otherwise act, alone or in concert with others, to seek to control or influence the management, Board of Directors or policies of the Company (other than in Laikin's fiduciary capacity as a director of the Company); (vi) publicly announce or refer to any proposal for an extraordinary corporate transaction involving the Company, or take any action for the purpose of requiring the Company to make a public announcement regarding the possibility of any such extraordinary corporate transaction; (vii) disclose any intention, plan or arrangement inconsistent with the foregoing or advise, assist or encourage any other persons in connection with the foregoing, or request that the Company amend or waive any of the terms of this Section 10.10; (viii) sell or transfer more than one percent (1%) of the total outstanding voting securities of the Company to any person, entity or "group" (within the meaning of Section 13(d)(3) of the 1934 Act), or sell or transfer any such voting securities to any such person, entity or group who or which, after the consummation of such sale or transfer, would beneficially own more than fourteen and nine-tenths percent (14.9%) of the total outstanding voting securities of the Company; or (ix) permit any of such Party's affiliates or associates or members of such Party's "group" (within the meaning of Section 13(d)(3) of the 1934 Act) to do any of the foregoing. The Parties agree and acknowledge that the provisions of this Section 10.10 shall be in addition to the standstill provisions contained in Section 14(a) of the March Letter Agreement to the extent it is in force (NLAG and the Purchasers assert that it is not, the Company asserts that it is) and to the extent it binds any of the Parties (NLAG and the Purchasers take the position that, if it is in force, it binds only the parties who executed it, the Company takes the position that the parties who executed the March Letter Agreement are responsible for causing their affiliates and associates to abide by it); provided, however, that the right of NLAG and the Purchasers contained in clause (i) of the first sentence of this Section 10.10 to purchase in the aggregate 50,000 shares of voting Common Stock shall be deemed to supercede any restriction to the contrary contained in Section 14(a) of the March Letter Agreement with respect only to purchases of Common Stock made or committed to be made prior to the termination of this Agreement; provided, further, however, that in the event this Agreement is validly terminated, Section 14(a) of the March Letter Agreement shall apply to the Parties (if it has remained in force) to the extent such Parties were subject to the provisions of the March Letter Agreement as if Section 14(a) of the March Letter Agreement is no longer superceded as described herein with respect to any purchases of Common Stock committed to be made after the termination of this Agreement. Section 10.11 No Personal Liability of Representatives. No officer, director, principal, attorney, agent or other representative (collectively, a "Representative") of any Party shall be personally liable for the representations, warranties, covenants and agreements of such Party contained in this Agreement and the other agreements and certificates contemplated hereby or for any action taken on behalf of such Party in connection therewith. Without limiting the foregoing, no Representative of the Company shall have any personal liability as a result of executing and delivering this Agreement, the other Company Relevant Documents and the certificate provided for in Section 5.1.17 on behalf of the Company. Each Representative of the Company (including, without limitation, Jimirro) and NLAG shall be a third-party beneficiary of this Section 10.11. 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 Daniel S. Laikin on or about August 11, 2000, the March Letter Agreement, and all other matters regarding the Company prior to the Closing and related litigation. 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 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. [remainder of this page intentionally left blank] IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written. J2 COMMUNICATIONS By: -------------------------------------- James P. Jimirro, President NATIONAL LAMPOON ACQUISITION GROUP, LLC By: --------------------------------------- Daniel S. Laikin, Managing Member "PURCHASERS" ------------------------------------------ Daniel S. Laikin ------------------------------------------ Paul Skjodt ------------------------------------------ Timothy S. Durham ------------------------------------------ [Designee of Timothy S. Durham] 04103.0001 #331148 EX-99 5 d395075_ex99-3.txt EXHIBIT 99-3 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 Ronald Holzer ("HOLZER") 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 Holzer 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 Daniel S. Laikin. 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 HOLZER AS ADDITIONAL PURCHASER. Paul Skjodt, one of the Purchasers under the Purchase Agreement ("SKJODT"), hereby designates Holzer to be the Purchaser of 2,500 Units that Skjodt had agreed to purchase pursuant to the Purchase Agreement. Section 3. HOLZER AGREEMENT TO PURCHASE UNITS. Holzer hereby agrees to purchase 2,500 of the Units that Skjodt had agreed to purchase pursuant to the Purchase Agreement, which purchase obligation of Holzer is subject to and upon the terms and conditions of the Purchase Agreement. Section 4. AGREEMENT FOR LAIKIN TO PURCHASE UNITS. Skjodt hereby designates Daniel S. Laikin ("LAIKIN") 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 Holzer's and Laikin's 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. HOLZER JOINDER IN PURCHASE AGREEMENT. Holzer hereby joins in and agrees to be bound by, and the parties thereto all consent to such joinder of Holzer in, the Purchase Agreement. Holzer 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. Timothy S. Durham, 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 Holzer 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 Daniel S. Laikin 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 Greenberg Traurig, LLP. Laikin and NLAG agree and acknowledge that any fees required to be paid to Greenberg 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 Batchelder 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 Holzer 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 Greenberg Traurig, LLP or GTH Capital, Inc. fails to execute the Greenberg 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 Greenberg 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 Greenberg 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 Greenberg Traurig, 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 Greenberg Traurig, LLP and GTH Capital, Inc. (and Castilla Investments, LLC, if applicable). Neither Greenberg 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 Greenberg 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 Brown Raysman Millstein Felder Steiner, 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: -------------------------------------- James P. Jimirro, President NATIONAL LAMPOON ACQUISITION GROUP, LLC By: -------------------------------------- Daniel S. Laikin, Managing Member "PURCHASERS" ----------------------------------------- Daniel S. Laikin ----------------------------------------- Paul Skjodt ----------------------------------------- Timothy S. Durham ----------------------------------------- Ronald Holzer DC INVESTMENTS, LLC By: -------------------------------------- Timothy S. Durham, Managing Member SCHEDULE OF PURCHASERS NAME ADDRESS # OF UNITS AGGREGATE PRICE - ---- ------- ---------- --------------- Daniel S. Laikin 9920 Towne Road 19,864 $1,986,400(1) Carmel IN 146032 Paul Skjodt 9910 Towne Road 3,000 $300,000 Carmel IN 46032 Timothy S. Durham 111 Monument Circle, 4,880 $488,000(2) Suite 3680 Indianapolis IN 46204 Ronald Holzer 600 Central Avenue, 2,500 $250,000 Suite 240 Highland Park IL 60035 DC Investments, LLC, 111 Monument Circle, 5,000 $500,000 an Indiana limited Suite 3680 liability company Indianapolis IN 46204 TOTAL 35,244 3,524,400 PURCHASER EXPENSES: Daniel S. Laikin $386,400 Timothy S. Durham 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 Mr. Laikin. (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 Mr. Durham. SCHEDULE 4.9 REPORTING PERSON NO. OF SHARES BENEFICIALLY OWNED Daniel S. Laikin 167,250 Paul Skjodt 141,050 Samerian, LLP 20,000 Timothy S. Durham 73,200 Diamond Investments, LLC 92,399 DW Leasing Company, LLC 17,350 Christopher R. Williams 129,900 Helen C. Williams 60,200 Judy B. Laikin 26,000 Ronald Holzer 40,100 SCHEDULE 10.12 Advisor Closing Cash Closing Note ------- ------------ ------------ Latham Watkins $400,000 $225,000 Gibson, Dunn Crutcher LLP $300,000 -0- Kelly Lytton Vann LLP $50,000 $25,000 Leagre Chandler Millard LLP $150,000 $165,000 Brown Raysman Millstein Felder Steiner LLP $30,000(1) -0- GTH Capital, Inc. $25,000(1) -0- Batchelder Partners, Inc.(2) -0- -0- Foley Lardner $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) Batchelder Partners, Inc. shall receive a fee not to exceed three percent (3%) of the purchase price for the securities sold hereunder. 04103.0001 #395075 EX-99 6 d331142_ex99-4.txt EXHIBIT 99-4 Exhibit 4 J2 COMMUNICATIONS - -------------------------------------------------------------------------------- VOTING AGREEMENT - -------------------------------------------------------------------------------- May 17, 2002 VOTING AGREEMENT THIS VOTING AGREEMENT (this "AGREEMENT"), dated as of May 17, 2002, is entered into by and among Daniel S. Laikin ("LAIKIN"), Paul Skjodt, Timothy S. Durham, Ronald Holzer, DC Investments, LLC and National Lampoon Acquisition Group, LLC, a California limited liability company (each a "PURCHASER" and together the "PURCHASERS"), Samerian LLP, an Indiana limited liability partnership, Diamond Investments, LLC, an Indiana limited liability company, Christopher R. Williams, Helen C. Williams, DW Leasing Company, LLC, a Mississippi limited liability company, and Judy B. Laikin (collectively, the "NLAG SHAREHOLDERS"), and James P. Jimirro ("JIMIRRO"). The Purchasers, the NLAG Shareholders and Jimirro are sometimes referred to in this Agreement individually as a "SHAREHOLDER" and collectively as the "SHAREHOLDERS". RECITALS WHEREAS, as of the date hereof, Jimirro, certain of the Purchasers and the NLAG Shareholders each own shares of the Common Stock, no par value (the "COMMON STOCK"), of J2 Communications, a California corporation (the "COMPANY"); WHEREAS, each of the Purchasers has agreed to purchase or will be granted an option to purchase, and the Company has agreed to sell and grant options to purchase, pursuant to a Preferred Stock and Warrant Purchase Agreement dated April 25, 2002, as amended by the First Amendment to Preferred Stock and Warrant Purchase Agreement dated May 17, 2002 (the "PURCHASE AGREEMENT"), shares of Series B Convertible Preferred Stock of the Company, no par value (the "SERIES B PREFERRED") and warrants to acquire shares of Common Stock of the Company (the "WARRANTS"); and WHEREAS, the obligations of the Company to sell, and the Purchasers to purchase, the Series B Preferred and Warrants pursuant to the Purchase Agreement are conditioned upon the execution and delivery of this Agreement by Jimirro, the Purchasers and the NLAG Shareholders. AGREEMENTS NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows: Section 1. VOTING AND OTHER ACTIONS. (a) Each of the Shareholders hereby agrees that at each meeting of the shareholders of the Company at which directors are to be elected after the Closing (as defined in the Purchase Agreement) and in connection with any action by written consent such Shareholder will vote (or execute such written consent with respect to, as the case may be) all shares of the capital stock of the Company which are voting shares, and any other voting securities of the Company, over which such Shareholder has voting control or which are owned by such Shareholder, beneficially or of record, or will cause such shares or securities to be voted (or such consent to be executed), and will take all other necessary or desirable actions within such Shareholder's control in his or her capacity as a shareholder, director, member of a board committee or officer of the Company, including acting by written consent to the extent permitted under applicable law, so that: (i) during the term of this Agreement the Board of Directors of the Company (the "BOARD") will include, and until (but not necessarily after) the Payment Satisfaction Date (hereinafter defined) will exclusively include, (A) three persons nominated by Jimirro (including their successors, the "JIMIRRO DIRECTORS"), (B) so long as the Purchasers and their transferees who are or become parties to and bound by this Agreement continue to beneficially own in the aggregate not less than 281,690 shares of Common Stock including as beneficially owned by them all shares of Common Stock into which their Series B Preferred could be converted (the foregoing required number of shares shall automatically be increased proportionately on account of any subdivision, share dividend, stock split or similar transaction and decreased proportionately on account of any reverse stock split, combination or similar transaction affecting the Common Stock occurring after the date of this Agreement), three persons nominated by the holders of a majority of the shares of Common Stock beneficially owned from time to time by the Purchasers (including their successors, the "SERIES B DIRECTORS"), and (C) one person nominated jointly by a majority of the Jimirro Directors and a majority of the Series B Directors (the "INDEPENDENT DIRECTOR"); provided, however, that the Independent Director will be nominated solely by a majority of the Series B Directors from and after the Payment Satisfaction Date (hereinafter defined); provided, further, that as a condition precedent to the effectiveness of each Jimirro Director's election or appointment to the Board, each Jimirro Director must execute and deliver to the Company, an agreement to resign from the Board effective immediately upon (but only upon) the termination of this Agreement, subject to the satisfaction of such Jimirro Director's fiduciary duties as a director of the Company, in the form attached hereto as Exhibit A; (ii) until the Payment Satisfaction Date (hereinafter defined) any committees of the Board will be created only upon the approval of a majority of the Series B Directors and a majority of the Jimirro Directors, and in each case will consist of (A) an equal number of Series B Directors and Jimirro Directors and, to the extent permitted, (B) the Independent Director; (iii) any vacancy created by the death, resignation or removal of any of the Jimirro Directors, the Series B Directors or the Independent Director will be filled by a person nominated to fill such vacancy by the person or group of persons entitled, under clause (i) above, to nominate the director who died, resigned or was removed; (iv) none of the Jimirro Directors or the Series B Directors will be removed (with or without cause) from the Board unless the Board has received a prior written request for such removal from the person or group of persons entitled to nominate the director to fill the vacancy that would be created by such removal; (v) Jimirro will be elected as Chairman of the Board, President and Chief Executive Officer of the Company during his employment with the Company, and will remain as Chairman of the Board after termination of such employment for so long as he beneficially owns at least 100,000 shares of Common Stock (the foregoing required number of shares shall automatically be increased proportionately on account of any subdivision, share dividend, stock split or similar transaction and decreased proportionately on account of any reverse stock split, combination or similar transaction affecting the Company's Common Stock occurring after the date of this Agreement); (vi) Laikin will be elected to the office of Chief Operating Officer of the Company for so long as Jimirro is the President and Chief Executive Officer, or until such earlier time as the Directors may elect; (vii) unless approved in writing by the holders of a majority of the outstanding shares of Series B Preferred, so long as any shares of Series B Preferred Stock remain outstanding no action (including, without limitation, amending the Articles of Incorporation or the Bylaws of the Company) will be taken to amend, alter or repeal any rights, preferences or privileges of, or any restrictions provided for the benefit of, the Series B Preferred, to adversely affect the rights of the holders of the Series B Preferred or the Series B Directors, or to authorize, create or issue (by reclassification or otherwise) any shares of any class or series of stock having preferences senior to the Series B Preferred Stock; and (viii) unless approved in writing by Jimirro, until the Payment Satisfaction Date (hereinafter defined) no action will be taken to amend, alter or repeal the Articles of Incorporation or the Bylaws of the Company. (b) Each of the Shareholders hereby agrees that such Shareholder will not, and will not permit its affiliates (as such term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended) or associates (as such term is defined in Rule 12b-2 promulgated under the Securities Exchange Act of 1934, as amended) to, (x) elect to cumulate votes pursuant to Section 708(b) of the California Corporations Code, or (y) prior to the Payment Satisfaction Date (hereinafter defined) nominate for election as a director any person in addition to those nominated or to be nominated in accordance with Section 1(a)(i) of this Agreement, or (z) directly or indirectly cause, request, solicit or encourage any other shareholder of the Company to do any of the acts described in subdivisions (x) or (y) of this Section 1(b). In the event that any shareholder of the Company who is not a party to this Agreement nominates for election as a director a person other than those nominated or to be nominated in accord ance with Section 1(a)(i) of this Agreement, and in the further event that the shareholders of the Company shall be entitled to cumulate their votes in the election of directors in question, then each of the Shareholders hereby agrees that in any election of directors held or to be held until the termination of this Agreement for which such other person is so nominated such Shareholder shall vote such Shareholder's shares as follows: (A) for each person nominated to be a Jimirro or a Series B Director each Shareholder shall cast the number of votes with respect to its shares (whether on a cumulated basis or not, depending on whether an election has been made to cumulate votes pursuant to Section 708(b) of the California Corporations Code) which is equal to 14.3 percent of the total number of votes in respect of which such Shareholder is entitled to vote in respect of its shares, rounded up to the next whole number of votes; and (B) for the person nominated to be the Independent Director each Shareholder shal l vote the remainder of such Shareholder's votes in respect of its shares (whether on a cumulated basis or not). (c) Each of the Shareholders hereby agrees to take all necessary or desirable actions within such Shareholder's control in such Shareholder's capacity as a shareholder, director, member of a board committee or officer of the Company to cause the Company to reincorporate in the State of Delaware as soon as commercially practicable after the Closing (as defined in the Purchase Agreement). In connection with such reincorporation, each Shareholder agrees that such Shareholder will (x) take all necessary or desirable actions within such Shareholder's control in such Shareholder's capacity as a shareholder, director, member of a board committee or officer of the Company (1) to cause the Company's (or its successor entity's, as the case may be) corporate documents (including, without limitation, its charter and bylaws) to be substantially in the form of the Company's current corporate documents, subject only to such differences as are required by Delaware law, and (2) to cause the Company, as soon as it may do so u nder applicable law and in accordance with the existing factual circumstances, to issue the Section 2115 Certificate (hereinafter defined), and (y), if necessary, enter into a new voting agreement having terms substantively identical to this Agreement regarding the capital stock of any successor entity to the Company resulting from such reincorporation. Each of the Shareholders hereby agrees that as soon as commercially practicable following such reincorporation, such Shareholder will designate an address of record outside the State of California for purposes of the records of the Company or any successor entity to the Company and will maintain such address of record until the termination of this Agreement pursuant to Section 2 below. (d) Jimirro and Laikin agree that until the Payment Satisfaction Date (hereinafter defined), in the event either Jimirro or Laikin (if he is a Series B Director) is unable under applicable law to participate, or otherwise elects not to participate, in a vote or decision of the Board on account of his personal interest in the matter being voted on or decided, then neither of such persons shall participate as a Director in such vote or decision of the Board. (e) For purposes of this Agreement, the "PAYMENT SATISFACTION DATE" is the date following the termination of Jimirro's employment with the Company as of which the following condition (whichever is applicable) has been satisfied: (i) if Jimirro's employment with the Company has been terminated by the Company for "Cause" pursuant to Section 4(e) of the Employment Agreement between Jimirro and the Company dated May 17, 2002 (the "NEW AGREEMENT") or by Jimirro otherwise than for an Executive Good Reason Termination Event pursuant to Section 4(g) of the New Agreement, then upon full payment of all compensation (excluding payments with respect to the movie "National Lampoon's Van Wilder") owed to Jimirro under the New Agreement; or (ii) if Jimirro's employment with the Company has been terminated by reason of Jimirro's death or disability, by the Company for "Convenience" pursuant to Section 4(f) of the New Agreement, or by Jimirro for an Executive Good Reason Termination Event pursuant to Section 4(g) of the New Agreement, then upon the later of (A) full payment to Jimirro of all compensation (including payments under the Severance Note (as defined in the New Agreement) but excluding payments with respect to the movie "National Lampoon's Van Wilder") owed to Jimirro under the New Agreement, and (B) thirteen (13) months after the payment to Jimirro of the "Cash Severance Payment" pursuant to, and as defined in, Section 5(d)(i) of the New Agreement. (f) Each of the Shareholders hereby represents and warrants for the benefit of each of the other Shareholders that it beneficially owns as of the date of this Agreement the number of shares of Common Stock set forth opposite such Shareholder's name in Exhibit B to this Agreement. (g) For purposes of this Agreement, the term "beneficially", when it modifies "own" or a derivative of "own", shall have the meaning ascribed to it in the rules and regulations promulgated under Section 13(d) of the Securities Exchange Act of 1934, as amended. (h) The Shareholders acknowledge that shares of capital stock of the Company that they own may be subject in certain respects to Rule 144 of the Securities Act of 1933, as amended. Section 2. TERMINATION OF AGREEMENT. This Agreement will terminate and be of no further force or effect upon the mutual written agreement to terminate of Jimirro and the Purchasers who hold a majority of the shares of Series B Preferred then held by the Purchasers or, in the absence of such an agreement to terminate, upon the last to occur of the following dates: (a) the Payment Satisfaction Date; or (b) the date as of which Jimirro personally first ceases to own beneficially (whether by reason of his death or otherwise) at least 100,000 shares of Common Stock (the foregoing required number of shares shall automatically be increased proportionately on account of any subdivision, share dividend, stock split or similar transaction and decreased proportionately on account of any reverse stock split, combination or similar transaction affecting the Company's Common Stock occurring after the date of this Agreement). Section 3. MISCELLANEOUS. (a) Succession. (i) Until the date of reincorporation of the Company in the State of Delaware (as contemplated by Section 1(c) of this Agreement) (the "REINCORPORATION DATE") the benefits and burdens of this Agreement shall not be personal to the Restricted Transferors (as defined herein) and will pass to the successors in interest and/or the transferees of any of their shares. In addition, it shall be a condition of any sale, transfer or assignment of any shares by any Restricted Transferor that the successor in interest to such shares (including, without limitation, any buyer, transferee or assignee) execute an adherence and assumption agreement to the terms and conditions of this Agreement in or substantially in the form attached hereto as Exhibit C. (ii) After the Reincorporation Date and until the Payment Satisfaction Date, unless the Company shall have issued a certificate to the effect that the Company is not subject to subdivision (b) of Section 2115 of the California Corporations Code upon a request therefor by any stockholder (a "SECTION 2115 CERTIFICATE"), the benefits and burdens of this Agreement shall not be personal to the Restricted Transferors (as defined herein) and will, pass to the successors in interest and/or the transferees of any of their shares. In addition, it shall be a condition of any sale, transfer or assignment at such time of any shares by any Restricted Transferor that the successor in interest to such shares (including, without limitation, any buyer, transferee or assignee) execute an adherence and assumption agreement to the terms and conditions of this Agreement in or substantially in the form attached hereto as Exhibit C. (iii) After the Reincorporation Date and until the Payment Satisfaction Date, in the event that the Company shall have issued a Section 2115 Certificate, the benefits and burdens of this Agreement shall not pass to the successors in interest and/or the transferees of any of the shares of the parties hereto except to the extent that the Restricted Transferors, considered together as a group, shall cease as a result of any sale, transfer or assignment of any shares at such time, to hold an aggregate number of Shares which represent a number of votes in an election of directors of the Company equal to 50% of the total number of votes applicable to all outstanding voting securities of the Company plus one vote. For the avoidance of doubt, the successor in interest to any Shares (including, without limitation, any buyer, transferee or assignee) as a result of a sale, transfer or assignment which results in the Restricted Transferors, considered together as a group, ceasing to hold such number of Shares, and the s uccessors in interest to any Shares as a result of subsequent sales, transfers or assignments, shall be bound by the benefits and burdens of this Agreement, and each such subsequent sale, transfer or assignment shall be conditioned upon the execution by each of such successor or successors in interest of an adherence and assumption agreement to the terms and conditions of this Agreement in or substantially in the form attached hereto as Exhibit C. (iv) The benefits and burdens of this Agreement with respect to Jimirro are wholly personal to him and will not flow to or bind his transferees or successors in interest with respect to his Common Stock. After the Payment Satisfaction Date, the benefits and burdens of this Agreement will be wholly personal to each of the Shareholders and will not flow to or bind their transferees with respect to any of their shares of stock. (v) For the purposes of this Section 3(a) and of Section 3(e)(ii)(z) the proportion that (1) the votes represented by the shares held by the holders of shares initially required to be legended under Section 3(e)(i), considered together as a group, bears to (2) the total number of votes shall be calculated without taking account, for any purposes, of any shares of Common Stock acquired by or issued to Jimirro as a result of the exercise of any stock options held by Jimirro as of the date of this Agreement or to be granted to Jimirro pursuant to the terms of the New Agreement. (vi) Any sale, transfer or assignment of shares by a Restricted Transferor which is, pursuant to the terms of this Agreement, conditional upon the successor in interest to such shares (including, without limitation, any buyer, transferee or assignee) executing an adherence and assumption agreement to the terms and conditions of this Agreement in or substantially in the form attached hereto as Exhibit C, in circumstances where such condition has not been satisfied shall constitute a breach of this Agreement by such Restricted Transferor. (vii) For the purposes of this Agreement, in determining whether any sale, transfer or assignment of any shares is a sale, transfer or assignment by a Restricted Transferor, each of the following persons shall be a "Restricted Transferor": (A) until the Reincorporation Date, the Shareholders (except for Jimirro) and the successors in interest to any of their shares (including, without limitation, any buyer, transferee or assignee); and (B) from and after the Reincorporation Date and until the Payment Satisfaction Date, if the Company shall not have issued a Section 2115 Certificate, the persons who were Restricted Transferors pursuant to Subsection 3(vii)(A) and the successors in interest to any of their shares (including, without limitation, any buyer, transferee or assignee); and (C) from and after the Reincorporation Date and until the Payment Satisfaction Date, if the Company shall have issued a Section 2115 Certificate and the sale, transfer or assignment in question is, or is subsequent to, a Prohibited Transfer (defined below), only those persons who were Restricted Transferors pursuant to Subsection 3(vii)(A) and the successors in interest to any of their Shares (including, without limitation, any buyer, transferee or assignee). For purposes of this Agreement, a "PROHIBITED TRANSFER" is a sale or transfer of shares which results in, or is subsequent to a sale or transfer which resulted in, the persons who were Restricted Transferors pursuant to Subsection 3(vii)(A) and the successors in interest to any of their shares (including, without limitation, any buyer, transferee or assignee), considered together as a group, ceasing to hold an aggregate number of shares which represent an amount of votes in an election of directors of the Company equal to 50% of the total number of votes plus one vote). (b) Governing Law. This Agreement shall be governed by, and construed and interpreted in accordance with, the laws of the State of California, without giving effect to its principles or rules regarding conflicts of laws (to the extent such principles or rules would require the application of the law of another jurisdiction). (c) Severability. If any provision of this Agreement or portion thereof shall be declared invalid, illegal or unenforceable, such provision or portion thereof shall be severed and all remaining provisions shall continue in full force and effect. (d) Amendments. No amendment, alteration or modification of this Agreement shall be valid unless in each instance such amendment, alteration or modification is expressed in a written instrument executed by each of Jimirro and the holders of a majority of the shares of Series B Preferred purchased pursuant to the Purchase Agreement, provided, that if any such purported amendment would discriminate against any one Shareholder, such Shareholder's consent shall be required for such amendment. Notwithstanding the foregoing, in no event shall an amendment to this Agreement that has the effect of removing a Series B Director or a Jimirro Director be valid without the consent of the persons who nominated such Series B Director or Jimirro Director, respectively. (e) Legends. (i) Each of the Shareholders (other than Jimirro) hereby agrees that each certificate representing shares of Series B Preferred held by such Shareholder, and each certificate of Common Stock acquired by such Shareholder (A) as a result of the conversion of Series B Preferred into Common Stock or upon exercise of the Warrants and (B) prior to the date on and after which the legend is removable under Section 3(e)(iii), may bear a legend containing the following words: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE VOTING AGREEMENTS SET FORTH IN THE VOTING AGREEMENT DATED AS OF MAY 17, 2002 BY THE PARTIES THERETO, A COPY OF WHICH IS ON FILE IN THE OFFICE OF THE COMPANY." (ii) In the event that any holder of shares of Common Stock or of Series B Preferred decides to sell or transfer any of such shares owned by him and in respect of which the certificate or certificates bear such legend, then such holder shall be entitled to request by written notice to the Company that the Company exchange such certificates for certificates which do not bear any legend, and each of the Shareholders hereby agrees to take all necessary or desirable actions within such Shareholder's control in his or her capacity as a shareholder, director, member of a board committee or officer of the Company to cause the Company so to exchange such certificates, provided always that (x) the Reincorporation Date shall have passed, (y) the Company shall have issued a Section 2115 Certificate and (z) the Company shall not be able to prove that such sale or transfer is a Prohibited Transfer. (iii) From and after the Payment Satisfaction Date, any shareholder of the Company holding shares the certificates in respect of which are legended as provided in Section 3(e)(i) shall be entitled to request by written notice to the Company that the Company exchange any legended certificate for a certificate which does not bear any legend, and each of the Shareholders hereby agrees to take all necessary or desirable actions within such Shareholder's control in his or her capacity as a shareholder, director, member of a board committee or officer of the Company to cause the Company so to exchange such certificates. (f) Waiver. No waiver of any provision of this Agreement shall be valid unless it is expressed in a written instrument duly executed by the party or parties making such waiver. The failure of any party to insist, in any one or more instances, on performance of any of the terms and conditions of this Agreement shall not be construed as a waiver or relinquishment of any rights granted hereunder or of the future performance of any such term, covenant or condition but the obligation of any party with respect thereto shall continue in full force and effect. (g) Notices. All notices, requests, consents and other communications required or permitted hereunder shall be in writing and shall be deemed effectively given: (i) upon personal delivery to the party to be notified, (ii) when sent by confirmed telex or facsimile if sent during normal business hours of the recipient; if not, then on the next business day, (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt, as follows: (i) If to any or all of the Purchasers or NLAG Shareholders, to: 111 Monument Circle, Suite 3680 Indianapolis, Indiana 46204 Attn: Timothy S. Durham with a copy (which shall not constitute notice) to: LEAGRE CHANDLER MILLARD LLP 1400 First Indiana Plaza 135 North Pennsylvania Street Indianapolis, Indiana 46204-2415 Attn: David B. Millard, Esq. Fax: 317-808-3100 (ii) If to Jimirro, to: James P. Jimirro 10787 Wilshire Boulevard, Suite 1702 Los Angeles, California 90024 with a copy (which shall not constitute notice) to: GIBSON, DUNN CRUTCHER LLP 333 South Grand Avenue Los Angeles, California 90071 Attn: Bruce D. Meyer, Esq. Fax: 213-229-7520 Alternatively, to such other address as a party hereto supplies to each other party in writing. (h) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument. (i) Headings. The headings of this Agreement are for convenience and shall not control or affect the meaning or construction of any provision hereof. (j) Specific Performance. Each of the Shareholders agrees and acknowledges that the other Shareholders will be irreparably damaged in the event this Agreement is not specifically enforced. Each of the parties therefore agrees that in the event of a breach of any provision of this Agreement the aggrieved party may elect to institute and prosecute proceedings in any court of competent jurisdiction to enforce specific performance or to enjoin the continuing breach of this Agreement. Such remedies shall, however, be cumulative and not exclusive, and shall be in addition to any other remedy which any Shareholder may have. Section 4. EFFECTIVE TIME. This Agreement will become effective immediately upon, but will not be effective prior to, the consummation of the sale of one or more shares of Series B Preferred by the Company pursuant to the Purchase Agreement. IN WITNESS WHEREOF the undersigned have set their hands as of the above date. - ---------------------------------- --------------------------------------- Daniel S. Laikin James P. Jimirro (individually) SAMERIAN LLP --------------------------------------- Paul Skjodt By -------------------------------- Paul Skjodt, Managing Member DIAMOND INVESTMENTS, LLC By - ---------------------------------- --------------------------------------- Christopher R. Williams Timothy S. Durham, Managing Member DW LEASING COMPANY, LLC --------------------------------------- Helen C. Williams By -------------------------------- Timothy S. Durham, Managing Member NATIONAL LAMPOON ACQUISITION GROUP, LLC --------------------------------------- Judy B. Laikin - ---------------------------------- By Timothy S. Durham Daniel S. Laikin, Managing Member ACKNOWLEDGED: J2 COMMUNICATIONS - ---------------------------------- Ronald Holzer By ------------------------------------- DC INVESTMENTS, LLC James P. Jimirro (President) By -------------------------------- Timothy S. Durham, Managing Member EXHIBIT A The undersigned hereby agrees to resign from the Board of Directors of J2 Communications, a California corporation (the "Company"), effective immediately upon the termination pursuant to Section 2 thereof of that certain Voting Agreement dated as of May 17, 2002 among Daniel S. Laikin, Paul Skjodt, Timothy S. Durham, Ronald Holzer, DC Investments, LLC and National Lampoon Acquisition Group, LLC, a California limited liability company, Samerian LLP, an Indiana limited liability partnership, Diamond Investments, LLC, an Indiana limited liability company, Christopher R. Williams, Helen C. Williams, DW Leasing Company, LLC, a Mississippi limited liability company, Judy B. Laikin and James P. Jimirro; provided, however, that the obligation set forth herein shall be subject in all respects to the satisfaction of the undersigned's fiduciary duties to the Company. ------------------------------------------- Director 04103.0001 #331142 EX-99 7 d331181_ex99-5.txt EXHIBIT 99-5 Exhibit 5 FIRST AMENDMENT TO VOTING AGREEMENT THIS FIRST AMENDMENT TO VOTING AGREEMENT (this "Amendment") is made and entered into on the _____ day of June, 2002, by and among James P. Jimirro ("Jimirro"), Daniel S. Laikin ("Laikin"), and Ronald Holzer ("Holzer"). RECITALS A. Jimirro, Laikin and Holzer are parties to that certain Voting Agreement dated as of May 17, 2002, relating to their shares of the common stock and/or Series B Convertible Preferred Stock (the "Series B Preferred") of J2 Communications, a California corporation (the "Company"). Various other shareholders of the Company are also parties to the Voting Agreement. B. Pursuant to Section 3(d) of the Voting Agreement, the Voting Agreement can be amended in writing by Jimirro and the holders of a majority of the outstanding shares of Series B Preferred that were purchased pursuant to that certain Preferred Stock and Warrant Purchase Agreement dated April 25, 2002, as amended by a First Amendment to Preferred Stock and Warrant Purchase Agreement dated May 17, 2002, among the Company, Laikin, Holzer and other purchasers of Series B Preferred (the "Purchase Agreement"). C. Laikin is the holder of more than a majority of the outstanding shares of Series B Preferred purchased pursuant to the Purchase Agreement. AGREEMENTS NOW, THEREFORE, in consideration of the foregoing and of the mutual promises and covenants made herein, Jimirro, Laikin and Holzer agree to amend, and do hereby amend, the Voting Agreement as follows: Section 1. Holzer Removal. Holzer is removed as a party to the Voting Agreement effective as of May 17, 2002. Section 2. Continued Effect. The Voting Agreement shall continue in effect as to all parties thereto other than Holzer in accordance with its terms and as amended hereby. Section 3. Notice of Amendment. Laikin will provide a signed photocopy of this Amendment to all parties to the Voting Agreement who are not signers of this Amendment. However, his failure to do so as to any or all of such parties to the Voting Agreement will not impair the effectiveness of this Amendment or constitute grounds for contesting the validity hereof. IN WITNESS WHEREOF Jimirro, Laikin and Holzer have executed this Amendment as of the date first above written. - ---------------------------------- ---------------------------------- James P. Jimirro Daniel S. Laikin - ---------------------------------- Ronald Holzer 04103.0001 #331181 EX-99 8 d394462_ex99-6.txt EXHIBIT 99-6 EXHIBIT 6 NATIONAL LAMPOON PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT NOTICE OF OPTION EXERCISE March 27, 2003 HAND DELIVERED National Lampoon 10850 Wilshire Boulevard Los Angeles CA 90024 Attn: James P. Jimirro, President Dear Jim: 1. Option Exercise. As you know from a letter dated today that was delivered to you by National Lampoon Acquisition Group, LLC ("NLAG"), I have been assigned the right by NLAG, as its designee, to exercise a portion of its Option granted under the Preferred Stock and Warrant Purchase Agreement dated April 25, 2002, as amended by the First Amendment to Preferred Stock and Warrant Purchase Agreement dated May 17, 2002 (the "Agreement"). All capitalized terms used herein, which are not otherwise defined herein, shall have the meanings ascribed to them in the Agreement. Pursuant to such assignment and the Agreement, I hereby exercise the Option to purchase 2,500 Option Units for a purchase price of $100 per unit, or $250,000 in the aggregate. A check or immediately payable funds in the amount of the aggregate exercise price for the Option Units has been delivered to you. Please issue the stock and warrant certificates in the name Ronald Holzer. 2. Representations and Warranties. I hereby represent and warrant to the Company as follows: a. Knowledge. I am an "accredited investor" as that term is defined in Rule 501 of Regulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act") and I have such knowledge and experience in financial business matters as to be capable of evaluating the merits and risks of this investment, I have no need for liquidity in this investment and I have the ability to bear the economic risks of this investment. b. Investment. I am acquiring the Option Units for investment for my own account and not with the view to, or for resale in connection with, any public distribution thereof. I understand that the Option Units have not been registered under the Securities Act or under any state securities laws by reason of a specified exemption from the registration provisions of the Securities Act and such state securities laws which depends upon, among other things, the bona fide nature of my investment intent as expressed herein. c. Resale Restrictions. I acknowledge that Option Units must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. d. Exemption from the Securities Act. The offer and sale by the Company of the Option Units to me qualifies for exemption from the registration requirements of the Securities Act, without limitation, pursuant to the requirements of Rule 506 promulgated thereunder insofar as such requirements apply to the purchasers of securities in a transaction relying on such rule for an exemption from the registration requirements of the Securities Act. 3. Indemnification. I hereby agree to indemnify the Company against and hold it harmless from any and all liabilities, losses, deficiencies, damages, expenses and costs (including, without limitation, reasonable counsel fees and costs and expenses incurred in the investigation, defense or settlement of any claims covered by this indemnity or incurred in connection with successfully asserting, proving or collecting indemnity payments pursuant to this Paragraph with respect to matters not involving defense of third-party claims) accruing from or arising at any time as a result of or out of (a) any inaccuracies in or breaches of the representations or warranties made by me herein or (b) any claims made by third-party claimants alleging facts which, if true, would constitute a breach of or inaccuracy in a representation or warranty made by me herein. Very truly yours, Ronald Holzer RECEIPT (HOLZER) (MARCH 27, 2003) National Lampoon, Inc., a Delaware corporation (the "Company"), hereby acknowledges the following: 1. The Company accepted delivery of the amount of Two Hundred Fifty Thousand Dollars ($250,000) by check or in immediately available funds on March 27, 2003; 2. Such amount was delivered on behalf of Ronald Holzer in exercise of the Option assigned to Mr. Holzer to purchase 2,500 Option Units for a purchase price of $100 per Option Unit pursuant to Section 1.3 of the Preferred Stock and Warrant Purchase Agreement dated April 25, 2002, as amended by the First Amendment to the Preferred Stock and Warrant Purchase Agreement dated May 17, 2002 (the "Agreement"). Terms used herein as capitalized defined terms shall have the meanings ascribed to them in the Agreement. DATED: March 27, 2003 NATIONAL LAMPOON, INC. By: -------------------------------------- James P. Jimirro, President 04103.0001 #394462 -----END PRIVACY-ENHANCED MESSAGE-----