FIRST AMENDMENT TO
STOCK PURCHASE AGREEMENT
THIS FIRST AMENDMENT TO STOCK PURCHASE AGREEMENT (the "Amendment") is
dated as of June 14, 1999, by and among Great Empire Broadcasting, Inc., a
Kansas corporation (the "Company"), the holders of shares of the Company's
Common Stock and Preferred Stock (the "Shareholders"), Xxxxxxx X. Xxxxxx, an
individual, and F.F. Xxxx Xxxxx, an individual, the duly appointed agents for
the Shareholders (the "Shareholders' Agents"), and Journal Broadcast
Corporation, a Nevada corporation ("Buyer").
RECITALS
A. Buyer, the Shareholders' Agents, the Shareholders and the Company have
entered into a Stock Purchase Agreement dated as of August 24, 1998 (the
"Purchase Agreement"), pursuant to which the Shareholders have agreed to sell to
Buyer, and Buyer has agreed to purchase from the Shareholders, the Common Stock
and the Preferred Stock on the terms and conditions set forth therein.
B. The parties hereto desire to set forth their agreement regarding the
Closing under the Purchase Agreement.
A G R E E M E N T S
In consideration of the agreements set forth herein and for other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows:
1. Capitalized Terms. All capitalized terms not otherwise defined herein
shall have the meanings ascribed to such terms in the Purchase Agreement.
2. Closing Date and Closing Place. (A) Section 9.1(a)(1) is hereby
amended and restated in its entirety as follows:
(a)(1) Except as provided below in this Section 9.1(a), the
Closing Date shall be June 14, 1999. The parties agree that the
Effective Time for purposes of the Working Capital Adjustment and
for all tax, accounting and financial purposes shall be 12:01
a.m., on June 1, 1999. Buyer hereby waives the condition that the
FCC Consent received on June 11, 1999 shall have become a Final
Order prior to Closing.
(B) Section 9.1(b) is hereby amended and restated in its entirety as
follows:
(b) Place of Closing. The Closing shall be held at the offices of
Xxxxxxxx, Xxxxx & Xxxxxxxxx, LLC, 0000 Xxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxxx,
Xxxxxx 00000.
3. Purchase Price. Section 2.3(a) shall be amended and restated in its
entirety as follows:
(a) Purchase Price. The purchase price for the Common Stock and the
Preferred Stock (the "Purchase Price") shall be Ninety-five Million Nine Hundred
Thousand Dollars ($95,900,000). Buyer shall pay or cause to be paid to
Shareholders at the Closing the Purchase Price, adjusted preliminarily by the
Working Capital Adjustment determined as of the Effective Time in accordance
with Section 2.4(c) hereof, less the Escrow Deposit of $4,000,000 and the
Closing Escrow (as defined below) of $3,000,000, plus the amount of "Closing
Interest" by federal wire transfer of same-day funds pursuant to wire
instructions which shall be delivered by Shareholders' Agents to Buyer at least
two (2) business days prior to the Closing Date. "Closing Interest" means
interest at the rate of five percent per annum commencing on and as of June 1,
1999, and continuing on through the day prior to the Closing on the amount of
the Purchase Price less the Working Capital Adjustment. By way of illustration,
assuming that the Closing Date is June 3, 1999, there would be two days of
Closing Interest to be paid by Buyer.
4. Closing Adjustments. The parties have made and approved the following
as contemplated by the Purchase Agreement:
(a) The Estimated Closing Statement attached to this Amendment as Exhibit
A.
(b) The preliminary Working Capital Adjustment as of the Effective Time
as set forth in Exhibit B to this Amendment. 5. Real Estate Matters. The matters
listed on the attached Exhibit C (the "Real Estate Matters") have not been
completed as of the date hereof, and will need to be completed following the
Closing. Shareholders hereby covenant and agree to reasonably cooperate in a
timely manner with Buyer in order to complete the Real Estate Matters.
6. Assets and Liabilities at Closing. Notwithstanding any provision to
the contrary in the Purchase Agreement, the parties agree that the liabilities
and obligations of the Company or any Subsidiary at the Closing shall include
those Contracts listed on Exhibit D hereto and marked with an asterisk.
7. Litigation. Pursuant to Section 6.12 of the Purchase Agreement, the
Company hereby notifies Buyer of the litigation disclosed on Exhibit E hereto
(the "Xxxxxx Litigation"). Notwithstanding any provision in the Purchase
Agreement to the contrary, the parties agree that
(a) Journal shall be responsible for payment of the first
Twenty-Five Thousand Dollars ($25,000) ("Buyer's Portion") in
expenses and costs incurred by the parties in defending the Xxxxxx
Litigation and which are not covered by the Company's insurance
("Uninsured Litigation Expenses"); (b) Buyer's Portion shall be
applied to the Basket Amount as defined in Section 11.5(c); and
(c) Shareholders shall be responsible for the payment of Uninsured
Litigation Expenses to the extent such Uninsured Litigation
Expenses exceed Buyer's Portion ($25,000); provided, however, that
the aggregate amount of Uninsured Litigation Expenses for which
Shareholders shall be responsible shall not exceed Twenty-Five
Thousand Dollars ($25,000) ("Shareholders' Portion") and
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Shareholders' Portion shall be paid from the Closing Escrow; and
provided, further, that Shareholders' payment of Shareholders'
Portion shall not be deemed a waiver by Buyer of any other claim
for indemnification for Uninsured Litigation Expenses it may have
against Shareholders with respect to the Xxxxxx Litigation and
that all such claims shall be made in accordance with and subject
to the terms and conditions of Section 11 of the Purchase
Agreement. The parties agree to reasonably cooperate with each
other to settle the Xxxxxx Litigation.
8. Effect of Amendment. Other than as amended hereby, all of the
provisions of the Purchase Agreement shall remain in full force and effect in
accordance with their terms.
9. Governing Law. This Amendment shall be governed, construed and
enforced in accordance with the laws of the State of Kansas (without regard to
the choice of law provisions thereof).
10. Counterparts. This Amendment may be signed in counterparts with the
same effect as if the signature on each counterpart were upon the same
instrument.
11. Further Assurances. The parties shall take any actions and execute
any other documents that may be reasonably necessary or desirable to the
implementation and consummation of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have duly executed this First
Amendment to Stock Purchase Agreement as of the day and year first above
written.
JOURNAL BROADCAST CORPORATION
By:/s/ ___________________________
Name:
Title:
GREAT EMPIRE BROADCASTING, INC.
By:/s/ ___________________________
Name:
Title:
F.F. XXXXX REVOCABLE TRUST
By:/s/ F.F. Xxxx Xxxxx
___________________________
Name: F.F. Xxxx Xxxxx
Title: Trustee
/s/ Xxxxxxx X. Xxxxxx
_______________________________
Xxxxxxx X. Xxxxxx
FIRST STUART CORPORATION
By:/s/ ___________________________
Name:
Title:
/s/ Xxxxxxxx X. Xxxxxxxxx
_______________________________
Xxxxxxxx X. Xxxxxxxxx
GREAT EMPIRE BROADCASTING, INC.
EMPLOYEE STOCK OWNERSHIP TRUST
By:/s/___________________________
Name:
Title:
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By:/s/___________________________
Name:
Title:
THE XXXXXX CHARITABLE REMAINDER
UNITRUST u/t/a July 30, 1998
By:/s/ Xxxxxxx Xxxxxx
___________________________
Xxxxxxx Xxxxxx, Trustee
By:/s/ Xxxx X. Xxxxxx
___________________________
Xxxx X. Xxxxxx, Trustee
THE XXXXXXX XXXX XxXXXXXXX TRUST
u/t/a August 17, 1998
By:/s/ Xxxx X. Xxxxxx
___________________________
Xxxx X. Xxxxxx, Trustee
THE XXXXXXX XXXXXX XXXXXX TRUST
u/t/a August 17, 1998
By: /s/ Xxxx X. Xxxxxx
___________________________
Xxxx X. Xxxxxx, Trustee
THE XXXXXXX XXXX XXXXXX TRUST
u/t/a August 17, 1998
By: /s/ Xxxx X. Xxxxxx
___________________________
Xxxx X. Xxxxxx, Trustee
XXXXX CHARITABLE REMAINDER UNITRUST
By: /s/ F.F. Xxxx Xxxxx
___________________________
F.F. Xxxx Xxxxx, Trustee
By: /s/ Xxxxxxx X. Xxxxx
___________________________
Xxxxxxx X. Xxxxx, Trustee
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SHAREHOLDERS' AGENTS
/s/ Xxxxxxx X. Xxxxxx
_______________________________
Xxxxxxx X. Xxxxxx
/s/ F.F. Xxxx Xxxxx
_______________________________
F.F. Xxxx Xxxxx
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EXHIBIT A
Estimated Closing Statement
---------------------------
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EXHIBIT B
Working Capital Adjustment
--------------------------
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EXHIBIT C
Real Estate Matters
-------------------
1. Obtain (i) the proper subdivision of the WOW-FM Tower Site ("Tower Site")
and the WOW-AM/FM Radio Studio Site ("Studio Site", and together with the
Tower Site sometimes hereinafter referred to as the "Properties") located
at 0000 Xxxxx 00xx Xxxxxx, Xxxxx, Xxxxxxxx, and (ii) the rezoning of the
Properties so that the Tower Site and the Studio Site are each located
within a single zoning district that permits as a matter of right the
current uses thereon. Without limiting the generality of the foregoing or
expanding the obligations of Shareholders, the following matters may need
to be completed in connection therewith:
(a) preparation of a subdivision plan of the Properties in accordance
with all applicable laws, ordinances and regulations (by Buyer
with Shareholders' reasonable cooperation);
(b) preparation of all required applications and public notices for
the subdivision and rezoning of the Properties and payment of all
applicable fees in connection therewith (by Buyer with
Shareholders' reasonable cooperation);
(c) participation in all municipal hearings related to the subdivision
and rezoning of the Properties (by Buyer with Shareholders'
reasonable cooperation); and
(d) if Buyer is unable to achieve the subdivision of the Studio Site
and Tower Site by using the permanent access easement currently in
place providing access to the Tower Site from 72nd Street,
procurement of (i) a quit claim deed from The Mikes Investment
Company ("Mikes Investment") conveying a strip of land over the
northern twenty feet of the Studio Site to Omaha Great Empire
Broadcasting, Inc. ("Great Empire") to provide access to and from
the Tower Site and 72nd Street ("Access Parcel"); (ii) releases of
any mortgages or other monetary encumbrances affecting the Access
Parcel; and (iii) an amendment of the lease between Mikes
Investment and Great Empire for the Studio Site excluding the
Access Parcel from the description of the leased premises (by
Shareholders);
2. Obtain the full release and termination of record of the following
encumbrances affecting the KTTS-AM/FM and KLTQ-FM Radio Studio located in
Springfield, Missouri:
(a) Deed of Trust from F.F. "Xxxx" Xxxxx and Xxxxxxx X. Xxxxxx, as
tenants in common, and their respective wives, Xxxxxxx Xxxxx and
Xxxxxxx X. Xxxxxx, to Xxxxx X. Xxxxxxxxx, as Trustee, for the
benefit of First Dallas Capital Corporation, in the original
amount of $800,000, dated June 15, 1977, and recorded July 11,
1977, in the Office of the Recorder of Deeds for Xxxxxx County,
Missouri, in Book 1656 at Page 1281 (by Shareholders).
(b) Subordination Agreement by Springfield Great Empire Broadcasting,
Inc. in favor of First National Bank in Dallas and First Dallas
Capital Corporation, dated June 15, 1977, and recorded on July 11,
1977, in the Office of the Recorder of Deeds for Xxxxxx County,
Missouri, in Book 1656, at Page 1291, and in Book 1656, at Page
1297, as amended by Amendment to Subordination Agreement by
Springfield Great Empire Broadcasting, Inc. in favor of First
National Bank in Dallas, dated May 22, 1981, and recorded on June
5, 1981, in the Office of the Recorder of Deeds for Xxxxxx County,
Missouri, in Book 1765, at Page 1177 (by Shareholders).
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EXHIBIT D
Contracts
---------
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EXHIBIT E
Litigation
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On June 4, 1999, the Kansas Human Rights Commission notified the Company
and Buyer that Xxxxxx Xxxxxx, a former employee at the Company's radio station
KICT-FM, Wichita, Kansas had filed a complaint against the Company with the
Equal Employment Opportunity Commission and the Kansas Human Rights Commission
alleging that the Company violated federal and state employment discrimination
laws. The Company has not yet filed a response to the complaint.
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