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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-A
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
FTM MEDIA, INC.
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(Exact Name of Registrant as Specified in Its Charter)
COLORADO 84-1295270
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(State of Incorporation or Organization) (I.R.S. Employer
Identification no.)
6991 EAST CAMELBACK ROAD
SUITE D-103 85231
SCOTTSDALE, ARIZONA
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(Address of Principal Executive Offices) (Zip Code)
If this form relates to the If this form relates to the
registration of a class of registration of a class of
securities pursuant to securities pursuant to
Section 12(b) of the Exchange Act Section 12(g) of the Exchange Act
and is effective pursuant to and is effective pursuant to
General Instruction A.(c), please General Instruction A.(d), please
check the following box.[ ] check the following box. [X]
Securities Act registration statement
file number to which this form relates: N/A
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(If applicable)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which
to be so Registered Each Class is to be Registered
N/A N/A
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Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK, PAR VALUE $0.04
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(Title of Class)
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ITEM 1. DESCRIPTION OF REGISTRANT'S SECURITIES TO BE REGISTERED.
FTM Media, Inc., a Colorado corportion (the "Registrant"), is
registering hereby its common stock, par value $.04 per share ("Common Stock").
The Registrant is authorized to issue 12,500,000 shares of Common Stock,
of which 6,524,356 shares are issued and outstanding. The Registrant is also
authorized to issue 2,500,000 shares of preferred stock, par value $.04 per
share ("Preferred Stock"). As of the date hereof, 800,000 shares of Preferred
Stock have been designated as Series A Convertible Preferred Stock (the "Series
A Stock"), none of which are issued and outstanding and 400,000 shares of
Preferred Stock have been designated as Series B Convertible Preferred Stock
("Series B Stock"), of which 273,504 shares are issued and outstanding.
The following summary of certain features of the Common Stock does not
purport to be complete and is subject to, and qualified in its entirety by, the
provisions of the Registrant's Articles of Incorporation, as amended, which is
included as an exhibit to this Registration Statement and incorporated herein by
this reference.
COMMON STOCK
Dividend Rights. Subject to the rights of any other class or series of
stock, including Preferred Stock then outstanding having a preference as to
dividends over the Common Stock, holders of Common Stock are entitled to receive
dividends out of funds legally available therefore when, and if, declared by the
Board of Directors.
Voting Rights. The holders of Common Stock are entitled to one vote for
each share held of record on all matters on which the holders of Common Stock
are entitled to vote.
Liquidation Rights. In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Registrant, after
distribution in full of the preferential amounts, if any, to be distributed to
the holders of shares of the Preferred Stock or any series thereof, the holders
of shares of the Common Stock shall be entitled to receive all of the remaining
assets of the Registrant available for distribution to its stockholders, ratably
in proportion to the number of shares of the Common Stock held by them. A
liquidation, dissolution or winding-up of the Registrant, as such terms are used
herein, will not be deemed to be occasioned by or to include any consolidation
or merger of the Registrant with or into any other company or companies or other
entity or a sale, lease, exchange or conveyance of all or a part of the assets
of the Registrant.
Preemptive and Subscription Rights. Holders of the Common Stock have no
preemptive or subscription rights to subscribe for additional shares of Common
Stock.
LIMITATIONS AS A RESULT OF PREFERRED STOCK
The Registrant's Articles of Incorporation authorizes the Board of
Directors to issue up to an aggregate of 2,500,000 shares of Preferred Stock in
one or more series with such voting rights, liquidation preferences, dividend
rights, repurchase rights, conversion rights, redemption rights and terms and
certain other rights and preferences as shall be determined by the Board of
Directors. The Board of Directors has designated 800,000 shares of Preferred
Stock as Series A Stock, none of which are issued and outstanding and 400,000
shares of Preferred Stock as Series B Stock, of which 273,504 shares are issued
and outstanding.
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Series B Stock. One series of Preferred Stock is currently outstanding,
the Series B Stock. The following is a summary of certain rights and preferences
of the Series B Stock that affect the rights of holders of the Common Stock:
- - The Series B Stock ranks senior to Common Stock and any other class or
series of capital stock of the Registrant with respect to liquidation,
dissolution, or winding up of the business.
- - Holders of Series B Stock are entitled to receive annual dividends of $0.702
per share prior and in preference to any declaration or payment of any cash
dividend on the Common Stock or any other junior stock of the Registrant.
- - Holders of Series B Stock have no voting rights except for those minimum
rights required by the Colorado Business Corporation Act, in which case the
stock shall vote together with the Common Stock as a single class, unless
the Colorado Business Corporation Act requires the Series B Stock to vote
separately as a single class.
- - Holders of Series B Stock have the option to convert their stock to shares
of Common Stock equal to the conversion rate in effect at the time of
conversion. The conversion rate shall be an amount equal to $5.85 divided by
the conversion price. The conversion price shall equal $5.85 minus the
multiple of the aggregate unpaid accrued dividends per share times 0.64103.
- - After June 15, 2000, the Registrant may elect to cause each share of the
Series B Stock to be automatically converted into a number of fully paid and
non-assessable shares of Common Stock equal to the conversion rate then in
effect as of any date on which the closing price for each of the twenty
trading days preceding such date equals or exceeds $8.35 per share.
CERTAIN ANTI-TAKEOVER EFFECTS
Preferred Stock. The issuance of additional shares of Preferred Stock,
or the issuance of rights to purchase Preferred Stock, may have the effect of
delaying, deferring or preventing a change in control of the Registrant or may
increase or decrease the number of shares constituting each series.
ITEM 2. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
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<S> <C>
3.1 Amended and Restated Articles of Incorporation of FTM
Media, Inc., a Colorado corporation.
3.2 Amended and Restated Bylaws of FTM Media, Inc., a Colorado corporation.
4.1 Specimen Certificate of Common Stock
4.2 Certificate of Designation of Rights and Preferences of Series A Convertible
Preferred Stock of Redwood Broadcasting, Inc. (currently FTM Media, Inc.)
4.3 Certificate of Designation of Rights and Preferences of Series B Convertible
Preferred Stock of Redwood Broadcasting, Inc. (currently FTM Media, Inc.)
</TABLE>
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
FTM Media, Inc.
(Registrant)
Date: October 19, 1999 By:/s/ Scott Manson
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Scott Manson
Chief Financial Officer and General Counsel
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EXHIBIT INDEX
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EXHIBIT NO. DESCRIPTION
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3.1 Amended and Restated Articles of Incorporation of FTM Media,
Inc., a Colorado corporation.
3.2 Amended and Restated Bylaws of FTM Media, Inc., a Colorado corporation.
4.1 Specimen Certificate of Common Stock
4.2 Certificate of Designation of Rights and Preferences of Series A Convertible
Preferred Stock of Redwood Broadcasting, Inc. (currently FTM Media, Inc.)
4.3 Certificate of Designation of Rights and Preferences of Series B Convertible
Preferred Stock of Redwood Broadcasting, Inc. (currently FTM Media, Inc.)
</TABLE>
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EXHIBIT 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
FTM MEDIA, INC.
The undersigned natural person of the age of eighteen years or more,
acting as incorporator of a corporation under the Colorado Business Corporation
Act, adopts the following Articles of Incorporation for such corporation:
ARTICLE I
NAME
Thee name of the Corporation is to be FTM Media, Inc.
ARTICLE II
TERMS OF EXISTENCE
The Corporation shall exist in perpetuity, from and after the date of
filing this Certificate of Incorporation with the Secretary of State of the
State of Colorado, unless sooner dissolved or disincorporated according to law.
ARTICLE III
OBJECT, PURPOSES AND POWERS
Section 1. General Objects and Purposes. To engage in any lawful
activity as may from time to time be authorized by the Corporation's Board of
Directors, which is not prohibited by law or by these Articles of Incorporation.
To undertake such other activities as the Board of Directors may deem reasonable
or necessary in the furtherance of the general or specific purposes and powers
of the Corporation.
Section 2. General Powers. Further, the Corporation shall have and may
exercise all the rights, powers and privileges now or hereafter conferred upon
corporations organized under the laws of the State of Colorado and in addition
may do everything necessary, suitable, proper for, or incident to, the
accomplishment of any of these corporate purposes.
Section 3. Specific Purposes and Powers. Subject to any specific written
limitations or restrictions imposed by the Colorado Business Corporation Act or
by other law, or by these Articles of Incorporation, and not in limitation of
any of the statutory powers herein granted, the Corporation shall have the
following purposes and exercise the following specific powers:
a. To Deal in Real Property. To acquire, hold, own, improve, manage,
operate, let as lessor, sell, convey or mortgage, or otherwise deal with, either
alone or in conjunction with others, real estate of every right, title or
interest, character and description whatsoever and wheresoever situated.
b. To Deal in Personal Property, Generally. To acquire, hold, own,
manage, operate, mortgage, pledge, hypothecate, exchange, sell, deal in and
dispose of, either alone
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or in conjunction with others, personal property and commodities of every right,
title or interest, character and description whatsoever and wheresoever
situated.
c. To Enter into Profit Sharing Arrangements and Partnerships. To enter
into any lawful arrangement for sharing profits, union of interest, reciprocal
association, or cooperative association with any corporation, association,
partnership, individual, or other legal entity for the carrying on of any
business, the purpose of which is similar to the Purposes set forth in Section 1
of this Article, and to enter into any general or limited partnership, the
purpose of which is similar to such Purposes.
d. To Execute Guarantees. To make any guaranty respecting stocks,
dividends, securities, indebtedness, interest, contracts or other obligations
created by any individual, partnership, association, corporation, or other
entity, to the extent that such guaranty is made in pursuance to the Purposes
set forth in Section 1 of this Article.
e. To Borrow Funds. To borrow or raise monies for any of the Purposes of
the Corporation set forth in Section 1 of this Article, and, from time to time,
without limit as to amount, to execute, accept, endorse, and deliver as evidence
of such borrowing, all kinds of securities, including, but without limiting the
generality thereof, promissory notes, drafts, bills of exchange, warrants,
bonds, debentures and other negotiable or non-negotiable instruments and
evidences of indebtedness; and to secure the payment and full performance of
such securities by mortgage on, or pledge, conveyance or assignment in trust of,
the whole, or any part of the assets of the Corporation.
f. To Lend Funds. To lend money to individuals or other business
entities and to charge interest for the same and to engage in the business,
buying, loaning money upon, selling, transferring, assigning, discounting,
borrowing money upon and pledging as collateral, and otherwise dealing as
principal agent or broker in bills of lading, warehouse receipts, evidence of
deposit and storage of personal property, bonds, stocks, promissory notes,
commercial paper account, invoices, chooses in action, interest in estates,
contracts, mortgages on real or personal property, pledges of personal property
and other evidence of indebtedness of persons, firms or corporations, and
owning, holding or conveying such real estate as may be necessary in the
operating of its business, and purchasing, acquiring and holding shares of stock
in other corporations, domestic and foreign, and doing all things incidental
thereto; to do a general brokerage business, to buy, sell and deal in all kinds
of listed and unlisted stocks and bonds on commission; not for the purpose of
carrying on the business of banking, insurance or the operation of railroads or
the discounting of bills and notes, or the buying and selling of bills of
exchange.
Section 4. All the foregoing listed powers and/or purposes of the
Corporation are both purposes and powers of the Corporation and shall be
construed as such.
ARTICLE IV
CAPITAL STOCK
Section 1. The total number of shares of capital stock which the
Corporation shall have authority to issue is fifteen million (15,000,000) shares
of which twelve million five hundred thousand (12,500,000) shares shall be
designated common stock, having a par value
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of four tenths of one cent ($.04) each, and of which two million five hundred
thousand (2,500,000) shares shall be designated preferred stock of the
Corporation, having a par value of four cents ($.04) each. All or any part of
the common stock may be issued by the Corporation from time to time and for such
consideration and on such terms as may be determined and fixed by the Board of
Directors, without action of the stockholders, as provided by law, unless the
Board of Directors deems it advisable to obtain the advice of the stockholders.
Said stock may be issued for money, property, services or other things of value,
and when issued shall be issued as fully paid and non-assessable. The private
property of stock holders shall not be liable for Corporation debts. Subject to
the preferences, rights and restrictions which may be ascribed to the preferred
stock of the Corporation by the Board of Directors. the preferences and relative
participating optional or other special rights and qualifications, limitations
or restrictions thereof of the common stock of the Corporation are as follows:
a. Dividends. Dividends may be paid upon the common stock, as and when
declared by the Board of Directors, out of funds of the Corporation legally
available therefor.
b. Payment on Liquidation. Upon any liquidation, dissolution and
termination of the Corporation, and after payment or setting aside of any amount
sufficient to provide for payment in full of all debts and liabilities of, and
other claims against the Corporation, the assets shall be distributed pro rata
to the holders of the common stock.
c. Voting Rights. At any meeting of the stockholders of the Corporation
each holder of Common Stock shall be entitled to one vote for each share
outstanding in the name of such holder on the books of the Corporation on the
date fixed for determination of voting rights.
The stockholders, by vote or concurrence of a majority of the
outstanding shares of the Corporation entitled to vote on the subject matter,
may take any action which would otherwise require a two-thirds (2/3) vote under
the Colorado Business Corporation Act.
d. Cumulative Voting. Cumulative voting shall not be allowed in the
election of directors or for any other purpose.
e. Pre-Emptive Rights. Unless otherwise determined by the Board of
Directors, no stockholder of the Corporation shall have pre-emptive rights to
subscribe for any additional shares of stock, or for other securities of any
class, or for rights, warrants or options to purchase stock for the scrip, or
for securities of any kind convertible into stock or carrying stock purchase
warrants or privileges.
f. Restrictions on Sale or Disposition. All lawful restrictions on the
sale or other disposition of shares may be placed upon all or a portion or
portions of the certificates evidencing the Corporation's shares.
Section 2. The preferred stock of the Corporation shall be issued in one
or more series as may be determined from time to time by the Board of Directors.
In establishing a series the Board of Directors shall give to it a distinctive
designation so as to distinguish it
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from the shares of all other series and classes, shall fix the number of shares
in such series, and the preferences, rights and restrictions thereof. All shares
of any one series shall be alike in every particular. All series shall be alike
except that there may be variation as to the following: (1) the rate of
distribution, (2) the price at and the terms and conditions on which shares
shall be redeemed, (3) the amount payable upon shares for distributions of any
kind, (4) sinking fund provisions for the redemption of shares, and (5) the
terms and conditions on which shares may be converted if the shares of any
series are issued with the privilege of conversion, and (6) voting rights except
as limited by law.
ARTICLE V
REGISTERED OFFICE AND AGENT
The address of the initial registered office of the Corporation will be
at 4465 Northpark Drive, Colorado Springs, Colorado 80907. The name of the
initial registered agent at such address is Stephen G. Calandrella. The
principal office of this Corporation and its principal place of business is the
same address as that of the initial registered office. The Corporation may
conduct part or all of its business in the County of El Paso or the State of
Colorado, or the United States, or of the world, and it may hold, purchase,
mortgage, lease and convey real and personal property in any of such places.
ARTICLE VI
DIRECTORS
The business and affairs of this Corporation and the management thereof
shall be vested in a Board of Directors consisting of not less than one (1) nor
more than ten (10) members. Directors need not be stockholders of the
Corporation. The person, together with his address, who shall act as such
directors for the first year of existence of this Corporation and until his
successors shall be duly elected and qualified will be:
Stephen G. Calandrella
7210 Antelope Lane
Colorado Springs, Colorado 80920
The number of directors may be increased from time to time, within the
limits stated above, by action of the majority of the whole Board of Directors
but the number of Directors may thereafter be decreased only by the stockholders
of the Corporation at an annual or special meeting thereof
ARTICLE VII
RIGHTS OF DIRECTORS, OFFICERS AND MANAGEMENT
TO CONTRACT WITH CORPORATION
No contract or other transaction between the Corporation and any other
corporation whether or not a majority of the shares of capital stock of such
other corporation is owned by this Corporation, and no act of this Corporation
shall be in any way affected or invalidated by the fact that any of the
directors, officers or other members of the management of this Corporation are
pecuniarily or otherwise interested in or are directors, officers or members of
management of such other corporation. Any director, officer or other member of
management of this Corporation individually, or any firm of which such
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director, officer or member of management may be a member, may be a party to, or
may be pecuniarily or otherwise interested in, any contract or transaction of
this Corporation, provided, however, that the fact that he or such firm is so
interested shall be disclosed or shall have been known to the Board of Directors
of this Corporation or a majority thereof. Any director of this Corporation who
is also a director, officer or member of management of such other corporation,
or who is so interested, may be counted in determining the existence of a quorum
at any meeting of the Board of Directors of this Corporation that shall
authorize such contract or transaction, and may vote at any such meeting to
authorize such contract or transaction, with like force and effect as if he were
not such director, officer or member of management of such other corporation or
not so interested.
ARTICLE VIII
INCORPORATOR
The name and address of the incorporator is:
Nathan L. Stone, Esq.
Neuman & Cobb
Temple-Bowron House
1507 Pine Street
Boulder, Colorado 80302
ARTICLE IX
INDEMNIFICATION
The Corporation may and shall indemnify each director, officer and any
employee or agent of the Corporation, his heirs, executors and administrators,
against any and all expenses or liability reasonably incurred by him in
connection with any action, suit or proceeding to which he may be a party by
reason of his being or having been a director, officer, employee or agent of the
Corporation to the full extent required or permitted by the Colorado Business
Corporation Act.
ARTICLE X
CORPORATE OPPORTUNITIES
The officers, directors and other members of management of this
Corporation shall be subject to the Doctrine of Corporate Opportunities only
insofar as it applies to business opportunities in which this Corporation has
expressed an interest as determined from time to time by the Corporation's Board
of Directors as evidenced by resolutions appearing in the Corporation's Minutes.
When such areas of interest are delineated, all such business opportunities
within such areas or interests which come to the attention of the officers,
directors and other members of management of this Corporation shall be disclosed
promptly to this Corporation and made available to it. The Board of Directors
may reject any business opportunity presented to it and therefore any officer,
director or other member of management may avail himself of such opportunity.
Until such time as this Corporation, through its Board of Directors, has
designated an area of interest, the officers, directors and other members of
management of this Corporation shall be free to engage in such areas of interest
on their own and this Doctrine shall not limit the rights of any officer,
director or
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other member of this Corporation to continue a business existing prior to the
time that such area of interest is designated by this Corporation, other than an
officer, director or member of management, from any duty which he may have to
the Corporation.
ARTICLE XI
PARTIAL LIQUIDATION
The Board of Directors may, from time to time, distribute to the
Corporation's shareholders, in partial liquidation, out of stated capital or
capital surplus of the Corporation, a portion of its assets, in cash or
properties if (a) at the time the Corporation is solvent; (b) such distribution
would not render the Corporation insolvent; (c) all cumulative dividends on all
preferred or special classes of shares entitled to preferential dividends shall
have been paid fully; (d) the distribution would not reduce the remaining net
assets of the Corporation below the aggregate preferential amount payable in the
amount of voluntary liquidation to the holders of shares having preferential
rights to the assets of the Corporation in the event of liquidation; (e) the
distribution is not make out of capital surplus arising from unrealized
depreciation of assets of re-evaluation of surplus; (f) the distribution is
identified as a distribution in partial liquidation and the amount per share is
disclosed to the shareholders receiving the same concurrently with the
distribution thereof.
ARTICLE XII
DIRECTORS' LIABILITIES
a. A director of this Corporation shall not be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent that such exemption from liability or limitation
thereof is not permitted under the General Corporation Law of the State of
Colorado as the same exists or may hereafter be amended.
b. Any repeal or modification of the foregoing paragraph A by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
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EXHIBIT 3.2
AMENDED AND RESTATED
BY-LAWS OF
FTM MEDIA, INC.
ARTICLE I
Section 1. The following paragraphs contain provisions for the
regulation and management of FTM MEDIA, INC., a Colorado corporation.
Section 2. In the event that there is a conflict between a provision of
these By-Laws and a mandatory provision of the Articles of Incorporation of this
corporation, then said mandatory provision of the Articles of Incorporation of
this corporation shall control.
ARTICLE II
PLACE OF BUSINESS
Section 1. The registered office of the corporation shall be 1507 Pine
Street, Boulder, Colorado 80302. The principal office of the corporation shall
be 2055 Anglo Drive, Suite 202, Colorado Springs, Colorado 80908. This
designation shall be without prejudice to the power and right of the corporation
to conduct and transact any of its affairs or business in other cities, states,
territories, countries, or places.
Section 2. The registered agent of the corporation in the State of
Colorado shall be Clifford L. Neuman.
Section 3. The registered office and registered agent of the corporation
may be changed from time to time in the manner prescribed by law without
amending these By-Laws.
ARTICLE III
OFFICERS
Section 1. Number. The officers of this corporation shall consist of a
President, a Secretary, a Treasurer, and such other officers, including one or
more Vice Presidents, and, if desired, a Chief Executive Officer, as may be
appointed in accordance with the provisions of Section 3 of this Article. One
person may hold any two of said offices (except the same person shall not be
both President and Vice President or President and Secretary), but no such
officer shall execute, acknowledge, or verify any instrument in more than one
capacity if such instrument is required by law or by these By-Laws or by a
resolution of the Board of Directors to be executed, acknowledged or verified by
any two or more officers.
Section 2. Election, Term of Office and Qualifications. The officers of
this corporation shall be chosen annually by the Board of Directors. Each
officer, except such officer as may be appointed in accordance with the
provisions of Section 3 of this Article, shall hold his office until his
successors shall have been removed in the manner hereinafter provided.
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Section 3. Subordinate Officers. The Board of Directors may appoint such
other officers to hold office for such period, have such authority and perform
such duties as the Board of Directors may from time to time determine. The Board
of Directors may delegate to any officer the power to appoint any such
subordinate officers.
Section 4. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board of Directors whenever in its
judgment the best interests of the corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
so removed. Such removal shall be by vote of a majority of the whole Board of
Directors at a regular meeting or a special meeting of the Board of Directors
called for this purpose.
Section 5. Resignations. Any officer may resign at any time by giving
written notice to the Board of Directors or to the President or Secretary of the
corporation. Any such resignation shall take effect at the time specified
therein; and, unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
Section 6. Chief Executive Officer. The Chief Executive Officer shall be
the principal executive officer of the corporation and, subject to the control
of the Board of Directors, shall in general supervise and control all of the
business and affairs of the corporation. He shall preside at all meetings of the
shareholders and all meetings of the Board of Directors; and shall have general
supervision over the affairs of the corporation and over the other officers.
Section 7. President. The President shall be the chief operating officer
of the corporation. The President shall perform all duties incident to the
office of the President; shall sign all stock certificates and written contracts
of the corporation; and shall perform all such other duties as are assigned to
him from time to time by resolution of the Board of Directors or the Chief
Executive Officer.
Section 8. Vice President. In the absence of the President or in the
event of his death, inability or refusal to act, the Vice President shall
perform the duties of the President, and when so acting, shall have all the
powers of, and be subject to, all of the restrictions upon the President. The
Vice President shall perform such other duties as from time to time may be
assigned to him by the President or by the Board of Directors.
Section 9. Secretary. The secretary shall be sworn to the faithful
discharge of his duty. He shall:
a. Keep the minutes of the meetings of the shareholders and of the
Board of Directors in books provided for that purpose;
b. See that all notices are duly given in accordance with the
provisions of these By-Laws or as required by law;
c. Be custodian of the records and of the seal of the corporation
and see that such seal is affixed to all stock certificates prior
to their issue and to all
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documents, the execution of which on behalf of the corporation
under its seal is duly authorized in accordance with the
provisions of these By-Laws.
d. Have charge of the stock books of the corporation and keep or
cause to be kept the stock and transfer books in such manner as
to show at any time the amount of the stock of the corporation
issued and outstanding, the manner in which and the time when
such stock was paid for, the names, alphabetically arranged, and
the addresses of the holders of record; and exhibit during the
usual business hours of the corporation to any director, upon
application, the original or duplicate stock ledger;
e. Sign with the President, or a Vice President, certificates of
stock of the corporation;
f. See that the books, reports, statements, certificates, and all
other documents and records of the corporation required by law
are properly kept and filed;
g. In general, perform all duties incident to the office of
Secretary and such other duties as, from time to time, may be
assigned to him by the Board of Directors or by the President.
Section 10. Treasurer. The Treasurer shall:
a. Have charge and custody of, and be responsible for, all funds and
securities of the corporation;
b. From time to time render a statement of the condition of the
finances of the corporation at the request of the Board of
Directors;
c. Receive and give receipt for monies due and payable to the
corporation from any source whatsoever;
d. In general, perform all duties incident to the office of
Treasurer, and such other duties as from time to time may be
assigned to him by the Board of Directors or by the President.
Section 11. Salaries. Salaries of the officers shall be fixed from time
to time by the Board of Directors and no officer shall be prevented from
receiving such salary by reason of the fact that he is also a Director of the
corporation.
ARTICLE IV
DIRECTORS
Section 1. General Powers. The business and affairs of this corporation
and the management thereof shall be vested in a Board of Directors consisting of
not less than three (3) nor more than ten (10) members, except that there need
be only as many directors as there are, or initially will be, shareholders in
the event that the outstanding shares are, or initially will be, held of record
by fewer than three (3) shareholders.
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Section 2. Number and qualification. The number of directors of this
corporation shall be not less than three (3) and not more than ten (10) except
that there need be only as many directors as there are, or initially will be,
shareholders in the event that the outstanding shares are, or initially will be,
held of record by fewer than three (3) shareholders. The number of directors may
be increased from time to time within the limits stated above by the action of
the majority or the whole Board of Directors but the number of directors may
thereafter be decreased only by the stockholders of the corporation at an annual
or special meeting thereof. Otherwise, the number of directors may be increased
or decreased by amendment of these By-Laws. Directors shall be elected for a
term of one (1) and shall serve until the election or qualification of their
successors, unless they sooner resign. At the first annual meeting of the
stockholders and at each annual meeting thereafter, the stockholders shall so
elect directors to hold office until the next succeeding annual meeting. The
directors need not be residents of the State of Colorado or stockholders of the
corporation.
Section 3. Executive Committee. The Board of Directors by resolution
passed by a majority of the whole Board may designate two or more of their
number to constitute an executive committee, which shall have and exercise,
subject to limitations, if any, as may be prescribed herein or by resolution of
the Board of Directors, the powers of the Board of Directors and the management
of the business and affairs of the corporation; provided such executive
committee shall act only at such times as the Board of Directors is not in
session and in no event to the exclusion of the Board of Directors at any time
to act as a Board upon any business of the corporation.
Section 4. Vacancy. Any director may resign at any time by giving
written notice to the President or to the Secretary of the corporation. Such
resignation shall take effect at the time specified therein, and unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective. Any vacancy occurring in the Board of Directors
may be filled by the affirmative majority vote of the whole Board of Directors.
A director elected to fill a vacancy shall be elected for the unexpired term of
his predecessor in office. A director chosen to fill a position resulting from a
vacancy or an increase in the number of directors shall hold office until the
next annual meeting of stockholders.
Section 5. Removal. Any director may be removed from office, either with
or without cause, at any time, and another person may be elected to his place,
to serve for the remainder of his term, at any special meeting of shareholders
called for that purpose, by a majority of all of the shares of stock outstanding
and entitled to vote. In case any vacancy so created shall not be filled by the
shareholders at such meeting, such vacancy may be filled by the affirmative vote
of a majority of the remaining directors though less than a quorum.
Section 6. Meetings. The regular meeting of the Board of Directors shall
be held immediately following the annual shareholder's meeting. The Board of
Directors shall meet at such other time or times as they may from time to time
determine.
Section 7. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the President or any two directors. The
person or persons authorized to call special meetings of the Board of Directors
may fix the place for holding any special meeting of the Board of Directors
called by them.
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Section 8. Place of Meetings. The Board of Directors may hold its
meetings at such place or places within or without the State of Colorado as the
Board may from time to time determine, or, with respect to its meetings, as
shall be specified or fixed in respective notices or waivers of notice of such
meetings.
Section 9. Special Meetings: Notice. Special meetings of the Board of
Directors shall be held whenever called by the President or by two of the
directors. Notice of the time and place of holding said special meeting of the
Board of Directors shall be given to each director by either (i) registered
mail, return receipt requested, deposited in the mail at least ten (10) days
prior to the date of said special meeting, or (ii) guaranteed overnight delivery
by a nationally-used courier service at least three (3) days prior to the date
of said special meeting, or (iii) by telex or facsimile copy sent at least
forty-eight (48) hours prior to the time and date of such special meeting.
Attendance of a director at such special meeting shall constitute a waiver of
notice of such special meeting, except where a director attends the meeting for
the express purpose of objecting to the transacting of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of any regular meeting or special meeting of the
Board of Directors need be specified in the notice or waiver of notice of such
meeting.
Section 10. Presence of Meetings. Members of the Board, or of any
committee thereof, may participate in a meeting of the Board or such committee
by means of conference telephone or similar communications equipment, by means
of which all persons participating in the meeting can hear one another.
Participation in a meeting pursuant to this Section 10 shall constitute presence
in person at such meeting.
Section 11. Quorum and Manner of Acting. A majority of the members of
the Board of Directors shall form a quorum for the transaction of business at
any regular or special meeting of the Board of Directors. The act of the
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors. If the vote of a lesser number is
required for a specific act by the Articles of Incorporation, or by another
provision of these By-Laws, then that lesser number shall govern. In the absence
of a quorum, a majority of the directors present may adjourn the meeting from
time to time until a quorum be had.
Section 12. Compensation. By resolution of the Board of Directors, the
directors may be paid their expenses, if any, for attendance at each meeting of
the Board of Directors and may be paid a fixed sum for attendance at each
meeting of the Board of Directors or a stated salary as director. No such
payment shall preclude any director from serving the corporation in any other
capacity and receiving compensation therefor.
Section 13. Election of Officers. At the first meeting of the Board of
Directors after the annual election, the President, Vice President, and
Secretary and Treasurer shall be elected to serve for the ensuing year and until
the election of their respective successors, and an executive committee may be
elected. Election shall be by ballot, and the majority of the votes cast shall
be necessary to elect. Any vacancies that occur may be filled by the Board of
Directors for the unexpired term. An officer may be removed at any time by the
majority vote of the directors present at any regular or special meeting of said
Board of Directors at which a quorum is present. The Board of Directors shall
have the power to fill officer
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vacancies, create new officer positions, and adjust salaries of officers as said
Board from time to time shall deem necessary, all in accordance with the
Articles of Incorporation.
Section 14. Reporting. At each annual stockholder's meeting, the
directors shall submit a statement of business done during the preceding year,
together with a report of the general financial condition of the corporation,
and of the condition of its tangible property.
ARTICLE V
BOOKS AND RECORDS
Section 1. The corporation shall keep either within or without the State
of Colorado, complete books and records of account and shall keep minutes of the
proceedings of its stockholders and the Board of Directors.
Section 2. The corporation shall keep at its registered office or
principal place of business, a record of its stockholders, giving the names and
addresses of all of the stockholders and the number and class of the shares held
by each.
Section 3. The books, records of account, financial statements and other
documents of the corporation shall be available to such persons who have been
designated by law as having a right thereto, and said books, records of account,
financial statements and documents shall be made available to such persons in
the manner and in accordance with the procedures established by law.
ARTICLE VI
STOCK
Section 1. Authorization. The authorized shares of stock of the
corporation shall be as provided by the Articles of Incorporation. Each share of
common stock shall have $.001 par value and each share of preferred stock, shall
have $30 par value.
Section 2. Certificate of Shares. The shares of stock of the corporation
shall be represented by certificates signed by the Chief Executive Officer,
President or the Vice President and the Secretary or an Assistant Secretary of
the corporation, and may be sealed with the seal of the corporation or a
facsimile thereof. The signatures of the President or Vice President and the
Secretary or Assistant Secretary upon a certificate may be facsimile if the
certificate is countersigned by a transfer agent, or registered by a registrar,
other than the corporation itself or an employee of the corporation. In case any
officer who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer at the date of its issue.
Section 3. Issuance of Certificates. Each certificate representing
shares shall state upon the face of same that the corporation is organized under
the laws of the State of Colorado, the name of the person to whom the
certificate is issued, the number and class of shares, and the designation of
the series, if any, which such certificate represents. No certificate shall be
issued for any shares until such shares are fully paid and when issued
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shall bear the notation that the certificate is issued as a fully paid and
non-assessable certificate of stock.
Section 4. Transfer of Shares. Transfer of shares of the corporation
shall be made only on the stock transfer books of the corporation by the holder
of record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the secretary of the corporation,
and on surrender for cancellation of the certificate for such shares. Upon
surrender to the corporation or to a transfer agent of the corporation of a
certificate of stock duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the duty of the
corporation to issue a new certificate to the person entitled thereto, and
cancel the old certificate. Every such transfer of shares shall be entered on
the stock book of the corporation which shall be kept at its principal office,
or by its registrar duly appointed.
Section 5. Transfer Agent. The secretary of the corporation shall act as
transfer agent of the certificates representing the shares of the corporation.
The Secretary shall maintain a stock transfer book, the stubs in which shall set
forth, among other things, the names and addresses of the holders of all issued
shares of the corporation, the number of shares held by each, the certificate
numbers representing such shares, the date of issue of the certificates
representing such shares, and whether or not such shares originate from original
issue or from transfer. The names and addresses of the shareholders as they
appear on the stubs of the stock transfer book shall be conclusive evidence as
to who are the shareholders of record and as such entitled to receive notice of
the meetings of shareholders; to vote at such meetings; to examine the list of
the shareholders entitled to vote at meetings; to receive dividends; and to own,
enjoy and exercise any other property rights deriving from such shares against
the corporation. Each shareholder shall be responsible for notifying the
secretary in writing of any change in his name or address and failure so to do
will relieve the corporation, its directors, officers and agents, from liability
for failure to direct notices or other documents, or to pay over or transfer
dividends or other property or rights, to a name and address other than the name
and address appearing on the stub of the stock transfer book.
The Board of Directors may at its discretion, appoint instead of the
secretary of the corporation, one or more transfer agents, registrars and agents
outside the corporation for making payment upon any class of stock, bond,
debenture, or other security of the corporation. Such agents and registrars may
be located either within or outside the State of Colorado. They shall have such
rights and duties and shall be entitled to such compensation as may be agreed.
Section 6. Fractional Shares. The corporation may, but shall not be
obliged to, issue a certificate for a fractional share, and by action by its
Board of Directors, may issue in lieu thereof scrip in register or bearer form
which shall entitle the holder to receive a certificate for a full share upon
the surrender of such scrip aggregated to a full share. The rights and
obligations of persons holding said fractional shares or scrip shall be as are
contained in any applicable provision of these By-Laws, Articles of
Incorporation, or laws of the State of Colorado.
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Section 7. Treasury Shares. Treasury shares of stock shall be held by
the corporation subject to the disposal of the Board of Directors and shall
neither vote nor participate in dividends.
Section 8. Lien. The corporation shall have a first lien on all shares
of its stock and upon all dividends declared upon same for any indebtedness of
the respective holders thereof of the corporation.
Section 9. Lost Certificates. In cases of loss or destruction of a
certificate of stock, no new certificates shall be issued in lieu thereof except
upon satisfactory proof to the Board of Directors of such loss or destruction,
and, at the election of a majority of the Board of Directors, upon giving
satisfactory security by bond or otherwise, against loss to the corporation. Any
such new certificate shall be plainly marked "Duplicate" on its face.
Section 10. Consideration and Payment for Shares. Shares having a par
value shall be issued for such consideration expressed in dollars but not less
than the par value thereof, as shall be fixed from time to time by the Board of
Directors. Shares without par value shall be issued for such consideration
expressed in dollars as shall be fixed from time to time by the Board of
Directors. Treasury shares shall be disposed of for such consideration expressed
in dollars as may be fixed from time to time by the Board of Directors. Such
consideration may consist, in whole or in part, of money, other property,
tangible or intangible, or labor or services actually performed for the
corporation, but neither promissory notes nor future services shall constitute
payment or part payment for shares,
ARTICLE VII
SHAREHOLDERS
Section 1. Annual Meeting. The regular meeting of the shareholders of
the corporation shall be held at a time and place to be designated by the
President, Vice President, or the Board of Directors, provided, however, that
whenever such day shall fall upon a Sunday or a legal holiday, the meeting shall
be held on the next succeeding business day. At the regular annual meeting of
the shareholders, the directors for the ensuing year shall be elected. The
officers of the corporation shall present their annual reports and the Secretary
shall have on file for inspection and reference an authentic list of the
stockholders, giving the amount of stock held by each as shown by the stock
books of the corporation ten (10) days before the annual meeting.
Section 2. Special Meeting. Special meetings of the shareholders may be
called at any time by the President, any member of the Board of Directors or by
the holders of not less than ten (10%) percent of all of the shares entitled to
vote at said special meeting. The Board of Directors may designate any place as
the place for any annual meeting or for any special meeting called by the Board
of Directors. If a special meeting shall be called otherwise than by the Board
of Directors, the place of meeting shall be the principal office of the
corporation.
Section 3. Notice of Meetings. Written or printed notice stating the
place, day and hour of the meeting, and in case of special meeting, the purpose
or purposes for which the
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meeting is called, shall be delivered not less than ten (10) nor note than fifty
(50) days before the date of the meeting, either personally, or by mail, by or
at the discretion of the President, the Secretary, or the director or the person
calling the meeting, to each stockholder of record entitled to vote at such
meeting, except that if the authorized capital stock is to be increased, at
least thirty (30) days notice shall the given. If mailed, such notice shall be
deemed to be delivered when deposited in the U.S. Mails and addressed to the
stockholder at his address as it appears on the stock transfer books of the
corporation, with postage thereon prepaid.
Section 4. Closing Transfer Books. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, the shareholders entitled to receive payment of any
dividend, or in order to make a determination of shares for any other purpose,
the Board of Directors may provide that the stock transfer books shall be closed
for any stated period not exceeding fifty (50) days. If the stock transfer books
shall be closed for the purpose of determining shareholders entitled to notice
of or to vote at a meeting of shareholders, shall be closed for at least ten
(10) days immediately preceding such meeting. In lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date as the record
date for any such determination of such shareholders, such date in any case to
be not more than fifty (50) days and in the case of a meeting of shareholders,
not less than ten (10) days prior to the date on which the particular action,
requiring such determination of shareholders, or shareholders entitled to make
payment of a dividend, the day on which notice of the meeting is mailed or the
date on which the resolution of the Board of Directors declaring such dividend
is adopted, as the case may be, shall be the record date for such determination
of shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such a
determination shall apply to any adjournment thereof. The officer or agent
having charge of the stock transfer books for shares of the corporation shall
make, at least ten (10) days before each meeting of shareholders, a complete
list of shareholders entitled to vote at any such meeting, or any adjournment
thereof arranged in alphabetical order, with the address of and the number of
shares held by each, which list for a period of ten (10) days prior to such
meeting, shall be kept on file at the principal office of the corporation. The
original stock transfer books shall be prima facie evidence as to who are the
shareholders entitled to examine such list or transfer books or to vote at any
meeting of shareholders.
Section 5. Election of Directors. At each annual meeting of the
shareholders of the corporation, the directors shall be elected who shall serve
until their successors are duly elected and qualified, unless they sooner
resign. Election of directors shall be by such of the shareholders as attend the
annual meeting, either in person or by proxy, provided that if the majority of
stock is not represented, said meeting may be adjourned by the shareholders
present for a period not exceeding sixty (60) days at any one adjournment. At
each election of directors, cumulative voting shall not be allowed.
Section 6. Quorum. A majority of the outstanding stock exclusive of
treasury stock shall be necessary to constitute a quorum at meetings of the
shareholders. If a quorum is present at any meeting, a majority of the stock
represented there shall decide any question which is brought before such
meeting, except in those cases where it is otherwise provided
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by law. In the absence of a quorum, those present may adjourn the meeting from
day to day but not exceeding sixty (60) days.
Section 7. Proxies. Any shareholder entitled to vote may be represented
at any regular or special meeting of the shareholders by a duty executed proxy.
ARTICLE VIII
WAIVER OF NOTICE
Section 1. Directors and Officers. Unless otherwise provided by law,
whenever any notice is required to be given to any director or officer of the
corporation under the provisions of these By-Laws or under the provisions of the
Articles of Incorporation, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice.
Section 2. Shareholders. No notice of the time, place or purpose of any
annual, regular, or special meeting of the shareholders need be given if all
shareholders of record on the date said meeting is held waive such notice in
writing either before or after the regular or special meeting of the
shareholders, such meeting shall be deemed to have been legally and duly called,
noticed, held, and conducted.
ARTICLE IX
ACTION WITHOUT A MEETING
Section 1. Any action required by the laws of the State of Colorado, the
Articles of Incorporation, or by these By-Laws, to be taken at a meeting of the
directors or stockholders of this corporation, or any action which may be taken
at a meeting of the directors or stockholders, may be taken without a meeting if
a consent in writing, setting forth the action so taken, shall be signed by all
the directors or stockholders entitled to vote with respect to the subject
matter thereof. Such consent shall have the same force and effect as a unanimous
vote of the directors or stockholders, and may be stated as such in any Articles
or documents filed with the Secretary of State under the law of the State of
Colorado.
ARTICLE X
CONTRACT, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the corporation, and such
authority may be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
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Section 3. Checks, Drafts, Etc. All checks, drafts or other orders for
the payment of money, notes or other evidences of indebtedness issued in the
name of the corporation shall be signed by such officer or officers, agent or
agents of the corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
Section 4. Deposits. All funds of the corporation not otherwise employed
shall be deposited from time to time to the credit of the corporation in such
banks, trust companies or other depositories as the Board of Directors may
select.
ARTICLE XI
EXECUTION OF INSTRUMENTS
Section 1. Execution of Instruments. The President shall have power to
execute on behalf and in the name of the corporation any deed, contract, bond,
debenture, note or other obligations or evidences or indebtedness, or proxy, or
other instrument requiring the signature of an officer of the corporation,
except where the signing and execution thereof shall be expressly delegated by
the Board of Directors to some other officer or agent of the corporation. Unless
so authorized, no officer, agent or employee shall have any power or authority
to bind the corporation in any way, to pledge in credit or to render it liable
pecuniarily for any purpose or in any amount.
Section 2. Checks and Endorsements. All checks and drafts upon the funds
to the credit of the corporation in any of its depositories shall be signed by
such of its officers or agents as shall from time to time be determined by
resolution of the Board of Directors which may provide for the use of facsimile
signatures under specified conditions, and all notes, bills receivable, trade
acceptances, drafts, and other evidences of indebtedness payable to the
corporation shall, for the purposes of deposit, discount or collection, be
endorsed by such officers or agents of the corporation or in such manner as
shall from time to time be determined by resolution of the Board of Directors.
ARTICLE XII
LOANS TO DIRECTORS AND OFFICERS
Loans to employees or officers of the corporation, guarantees of their
obligations or other similar assistance to these employees or officers (except
those employees or officers who are directors of the corporation), shall be
contracted on behalf of the corporation only upon the specific authorization of
the Board of Directors of the corporation. Unless otherwise provided in the
Articles of Incorporation loans to directors, guarantees of their obligations,
or other similar assistance to the directors stall be contracted on behalf of
the corporation only upon the specific authorization of the Board of Directors
and the affirmative vote of the holders of two-thirds (2/3) of the outstanding
shares of the corporation which are entitled to vote for directors. No such
loans or guarantees shall be secured by the shares of this corporation.
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ARTICLE XIII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1. As used in this Article:
a. "Corporation" includes any domestic or foreign predecessor entity
of the corporation in a merger, consolidation, or other
transaction in which the predecessor's existence ceased upon
consummation of the transaction.
b. "Director" means an individual who is or was a director of a
corporation and an individual who, while a director of a
corporation is or was serving at the corporation's request as a
director, officer, partner, trustee, employee, or agent of any
other foreign or domestic corporation or for any partnership,
joint venture, trust, other enterprise, or employee benefit plan.
A director shall be considered to be serving an employee benefit
plan at the corporation's request if his duties to the
corporation also mean duties on or otherwise involve services by
him to the plan or to participants in or beneficiaries of the
plan.
c. "Expenses" includes attorney fees.
d. "Liability" means the obligation to pay a judgment, settlement,
penalty, fine (including an excise tax assessed with respect to
an employee benefit plan), or reasonable expense incurred with
respect to a proceeding.
e. "Official capacity", when used with respect to a director, means
the office of director in the corporation, and, when used with
respect to an individual other than a director, means the office
in the corporation held by the officer or the employment or
agency relationship undertaken by the employee or agent on behalf
of the corporation. "Official capacity" does not include service
for any other foreign or domestic corporation or for any
partnership, joint venture, trust, other enterprise, or employee
benefit plan.
f. "Party" includes an individual who was, is, or is threatened to
be made a named defendant or respondent in a proceeding.
g. "Proceeding" means any threatened, pending or completed action,
suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
Section 2.
a. Except as provided in paragraph (d) of this Section 2, the
corporation may indemnity against liability incurred in any
proceeding an individual made a party to the proceeding because
he is or was a director if:
(I) He conducted himself in good faith;
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(II) He reasonably believed:
A. In the case of conduct in his official capacity with the
corporation, that his conduct was in the corporation's best interests; or
B. In all other cases, that his conduct was at least not
opposed to the corporation's best interests; and
(III) In the case of any criminal proceeding, he had no
reasonable cause to believe his conduct was unlawful.
b. A director's conduct with respect to an employee benefit plan for
a purpose he reasonably believed to be in the interests of the
participants in or beneficiaries of the plan is conduct that
satisfies the requirements of sub-subparagraph (b) of
subparagraph (II) of paragraph (a) of this Section 2. A
director's conduct with respect to an employee benefit plan for a
purpose that he did not reasonably believe to be in the interests
of the participants in or beneficiaries of the plan shall be
deemed not to satisfy the requirements of subparagraph (I) of
paragraph (a) of this Section 2.
c. The termination of any proceeding by judgment, order, settlement,
or conviction, or upon a plea of nolo con tendere or its
equivalent, is not of itself determinative that the individual
did not meet the standard of conduct set forth in paragraph (a)
of this Section 2.
d. The corporation may not indemnify a director under this Section 2
either.
(I) In connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the corporation; or
(II) In connection with any proceeding charging improper
personal benefit to the director, whether or not involving action in his
official capacity, in which he was adjudged liable on the basis that personal
benefit was improperly received by him.
e. Indemnification permitted under this Section 2 in connection with
a proceeding by or in the right of the corporation is limited to
reasonable expenses incurred in connection with the proceeding.
Section 3. The corporation shall be required to indemnify a person who
is or was a director of the corporation and who was wholly successful, on the
merits or otherwise, in defense of any proceeding to which he was a party,
against reasonable expenses incurred by him in connection with the proceeding.
Section 4. A director who is or was a party to a proceeding may apply
for indemnification to the court conducting the proceeding or to another court
of competent jurisdiction. On receipt of an application, the court, after giving
any notice the court considers necessary, may order indemnification in the
following manner:
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a. If it determines the director is entitled to mandatory
indemnification under subsection (3) of this section, the court
shall order indemnification in which case the court shall also
order the corporation to pay the director's reasonable expenses
incurred to obtain court-ordered indemnification.
b. If it determines that the director is fairly and reasonably
entitled to indemnification in view of all the relevant
circumstances, whether or not he met the standard (if conduct set
forth in paragraph (a) of Section 2 of this Article or was
adjudged liable in the circumstances described in paragraph (d)
of Section 2 of this Article, the court may order such
indemnification as the court deems proper, except that the
indemnification with respect to any proceeding in which liability
shall have been adjudged in the circumstances described in
paragraph (a) of Section 2 of this Article is limited to reason
able expenses incurred.
Section 5. The corporation may not indemnify a director under Section 2
of this Article unless authorized in that specific case after a determination
has been made that indemnification of the director is permissible in the
circumstances because he has met the standard of conduct set forth in paragraph
(a) of said subsection.
a. The determination required to be made by paragraph (a) of this
Section 5 shall be made:
(I) By the board of directors by a majority vote of a quorum,
which quorum shall consist of directors not parties to the proceeding; or
(II) If a quorum cannot be obtained, by a majority vote of a
committee of the board designated by the board, which committee shall consist of
two or more directors not parties to the proceeding; except that directors who
are parties to the proceeding may participate in the designation of directors
for the committee.
b. If the quorum cannot be obtained or the committee cannot be
established under paragraph (b) of this Section 5, or even if a
quorum is obtained or a committee designated if such quorum or
committee so directs, the determination required to be made by
paragraph (a) of this Section 5 shall be made:
(I) By independent legal counsel selected by a vote of the board
of directors or the committee in the manner specified in subparagraph (I) or
(II) of paragraph (b) of this Section 5 or, if a quorum of the full board cannot
be obtained and a committee cannot be established, by independent legal counsel
selected by a majority vote of the full board; or
(II) By the shareholders.
c. Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as
the determination that indemnification is permissible; except
that, if the determination that indemnification is permissible is
made by independent legal counsel,
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authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by the body that
selected said counsel.
Section 6. The corporation may pay for or reimburse the reasonable
expenses incurred by a director who is a party to a proceeding in advance of the
final disposition of the proceeding if:
(I) The director furnishes the corporation a written affirmation
of his good-faith belief that he has met the standard of conduct described in
subparagraph (I) of paragraph (a) of Section 2 of this Article;
(II) The director furnishes the corporation a written
undertaking, executed personally or on his behalf, to repay the advance if it is
determined that be did not meet such standard of conduct; and
(III) A determination is made that the facts then known to those
making the determination would not preclude indemnification under this Section
6.
b. The undertaking required by subparagraph (II) of paragraph (a) of
this Section 6 shall be an unlimited general obligation of the
director, but need not be secured and may be accepted without
reference to financial ability to make repayment.
Section 7.
a. An officer of the corporation who is not a director is entitled
to mandatory indemnification pursuant to Section 3 of this
Article and is entitled to apply for court-ordered
indemnification pursuant to Section 4 of this Article in each
case to the same extent as a director;
b. The corporation may indemnify and advance expenses pursuant to
Section 6 of this Article to an officer, employee, or agent of
the corporation who is not a director to the same extent as a
director; and
c. The corporation may indemnify and advance expenses to an officer,
employee or agent of the corporation who is not a director to a
greater extent if consistent with law and if provided for by
resolution of its shareholders or directors, or in a contract.
Section 8. The corporation may purchase and maintain insurance on behalf
of an individual who is or was a director, officer, employee, fiduciary, or
agent of the corporation and who, while a director, officer, employee,
fiduciary, or agent of the corporation is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee, fiduciary, or
agent of any other foreign or domestic corporation or of any partnership, joint
venture, trust, other enterprise, or employee benefit plan against any liability
asserted against or incurred by him in any such capacity or arising out of his
status as such, whether or not the corporation would have the power to indemnify
him against such liability under the provisions of this Article.
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<PAGE> 16
Section 9. Any indemnification of or advance of expenses to a director
in accordance with this Article, if arising out of a proceeding by or on behalf
of the corporation, shall be reported in writing to the shareholders with or
before the notice of the next shareholders' meeting.
ARTICLE XIV
MISCELLANEOUS
Section 1. Corporate Seal. The Board of Directors shall provide a
corporate seal which shall be circular in form and shall have inscribed thereon
the name of the corporation, the state of incorporation, and the words
"Corporate Seal".
Section 2. Fiscal Year. The fiscal year of the corporation shall be
established by the Board of Directors.
Section 3. Amendments. Subject to repeal or change by action of the
shareholders, the Board of Directors shall have the power to alter, amend, or
repeal the by-laws of the corporation and to make and adopt new by-laws at any
regular meeting of the Board or at an special meeting called for that purpose.
Section 4. Dividends. The Board of Directors may, form time to time,
declare, and the corporation may pay, dividends on its outstanding shares in the
manner and upon the terms and conditions provided by law and its Articles of
Incorporation.
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<PAGE> 1
EXHIBIT 4.1
[SPECIMEN]
- --------------------------------------------------------------------------------
December 1, 1994
Incorporated Under the Laws of the State of Colorado
PB- *
FTM MEDIA, INC.
Authorized: 15,000,000 Shares
12,500,000 Shares Common Stock 2,500,000 Shares Preferred Stock
$.04 Par Value Each $.04 Par Value Each
800,000 Shares Series A Preferred
Stock $.04 Par Value
400,000 Shares Series B Convertible
Preferred Stock $.04 Par Value
This Certifies that * * * * * * * * * *
is the registered holder of * * * * * * * * * Shares of the Common Stock of
FTM MEDIA, INC.
HEREINAFTER DESIGNATED "THE CORPORATION", TRANSFERABLE ON THE SHARE REGISTER OF
THE CORPORATION UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED OR
ASSIGNED.
This certificate and the shares represented thereby shall be held subject
to all of the provisions of the Articles of Incorporation and the Bylaws of
said Corporation, a copy of each of which is on file at the office of the
Corporation.
Any shareholder may obtain from the principal office of the Corporation,
upon written request and without charge, a statement of the number of shares
constituting each class or series of stock and the designation thereof; and a
copy of the designations, preferences, limitations and relative rights
applicable to each class, the variations in preferences, limitations, and
rights determined for each series, and the authority of the Board of Directors
to determine variations for future classes or series, and the Bylaws.
The address of the principal office of the Corporation is 6991 East Camelback
Road, Suite D-103, Scottsdale, Arizona 85251.
WITNESS THE SIGNATURES OF THE DULY AUTHORIZED OFFICERS OF THE CORPORATION.
DATED: , 1999
_________________________ [CORPORATE SEAL] _________________________
Scott Manson, Secretary Ron Conquest, President
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<PAGE> 1
EXHIBIT 4.2
CERTIFICATE OF DESIGNATION OF
RIGHTS AND PREFERENCES OF SERIES A
CONVERTIBLE PREFERRED STOCK
OF REDWOOD BROADCASTING, INC.
- --------------------------------------------------------------------------------
Pursuant to Section 7-106-102 of the
General Corporation Law of the State of Colorado
- --------------------------------------------------------------------------------
REDWOOD BROADCASTING, INC., a corporation organized and existing under
the laws of the State of Colorado (the "Company"), DOES HEREBY CERTIFY that
pursuant to the authority contained in its Articles of Incorporation, as
amended, and in accordance with the provisions of the General Corporation Law of
the State of Colorado, the Company's Board of Directors has duly adopted the
following resolution creating a series of the class of its authorized Preferred
Stock, designated as Series A Convertible Preferred Stock:
RESOLVED THAT:
Whereas, by virtue of the authority contained in its Articles of
Incorporation, as amended, the Company has the authority to issue Two
Million Five Hundred Thousand (2,500,000) shares of $.04 par value
Preferred Stock, the designation and amount thereof and series, together
with the powers, preferences, rights, qualifications, limitations or
restrictions thereof, to be determined by the Board of Directors
pursuant to the applicable law of the State of Colorado;
Now therefore, the Company's Board of Directors hereby
establishes a series of the class of Preferred Stock authorized to be
issued by the Company as above stated, with the designations and amounts
thereof, together with the voting powers, preferences and relative,
participating, optional and other special rights of the shares of each
such series, and the qualifications, limitations or restrictions
thereof, to be as follows:
1. Designations and Amounts. Eight Hundred Thousand (800,000) shares of
the Company's authorized Preferred Stock are designated as Series A
Convertible Preferred Stock.
2. Definitions.
For the purposes of this Resolution the following definitions
shall apply:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Company" shall mean Redwood Broadcasting, Inc., a Colorado
corporation.
<PAGE> 2
(c) "Original Issue Date" for a series of Preferred Stock shall
mean the date on which the first share of such series of
Preferred Stock was originally issued.
(d) "Preferred Stock" shall refer to Series A Convertible
Preferred Stock.
(e) "Common Stock" shall refer to the Company's $.004 par value
common stock.
(f) "Subsidiary" shall mean any corporation at least 50% of whose
outstanding voting stock shall at the time be owned directly or
indirectly by the Company or by one or more Subsidiaries.
3. Dividends.
The holders of outstanding Preferred Stock shall not be entitled
to receive any dividends by virtue of their beneficial ownership of
Preferred Stock, but rather shall be entitled to participate, pro rata,
in dividends paid on outstanding shares of Common Stock, if, when and as
the Board of Directors shall in their sole discretion deem advisable,
and only from the net profits or surplus of the Company as such shall be
fixed and determined by the Board of Directors. The determination of the
Board of Directors at any time of the amount of net profits or surplus
available for dividend shall be binding and conclusive on the holders of
all the stock of the Company at the time outstanding.
4. Liquidation Rights.
(a) In the event of any liquidation, dissolution, or winding up
of the Company, whether voluntary or involuntary, the holders of
each share of Preferred Stock then outstanding shall be entitled
to be paid out of the assets of the Company available for
distribution to its shareholders, before any payment or
declaration and setting apart for payment of any amount shall be
made in respect to any outstanding preferred stock ranking junior
to the Preferred Stock or the Common Stock, an amount equal to
$1.00 per share. If upon any liquidation, dissolution, or winding
up of the Company, whether voluntary or involuntary, the assets
to be distributed to the holders of the Preferred Stock shall be
insufficient to permit the payment to such shareholders of the
full preferential amount aforesaid, then all of the assets of the
Company available to be distributed shall be distributed ratably
to the holders of the Preferred Stock.
(b) After the payment or distribution to the holders of the
Preferred Stock of the full preferential amounts aforesaid, the
holders of any preferred stock rank junior to the Preferred Stock
and the Common Stock then outstanding shall be entitled to
receive all of the remaining assets of the Company.
(c) Neither a consolidation, merger or reorganization of the
Company, a sale or other transfer of all or substantially all of
its assets, nor a sale of fifty percent (50%) or more of the
Company's capital stock then issued and
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<PAGE> 3
outstanding nor the purchase or redemption by the Company of
stock of any class, nor the payment of a dividend or distribution
from net profits or surplus of the Company shall be treated as or
deemed to be a liquidation hereunder.
5. Redemption.
The Company shall have the right at any time and from
time-to-time to purchase and redeem all or any portion of the
outstanding Preferred Stock at the redemption price of $1.00 per share
of Preferred Stock (the "Redemption Price") upon thirty (30) days' prior
notice. Holders of the Preferred Stock called for redemption shall have
the right to exercise their rights to convert the shares of Preferred
Stock called for redemption into shares of Common Stock in accordance
with Paragraph 7 hereof until the close of business on the date next
preceding the date fixed for redemption.
6. Voting Rights.
Holders of Preferred Stock shall have no right to vote on any
matter voted upon by the holders of outstanding shares of Common Stock
at any regular or special meeting of shareholders.
7. Conversion.
The Preferred Stock shall have the following conversion rights
(the "Conversion Rights"):
(a) Optional Conversion. For the period commencing one (1) year
from the date of issuance, holders of outstanding shares of
Preferred Stock shall have an option to convert each share of
Preferred Stock into shares of the Company's Common Stock (the
"Conversion Stock"), at any time, at a conversion value of One
Dollar ($1.00) per share of Common Stock.
(b) Adjustment for Stock Splits and Combinations. If the Company
shall at any time or from time to time after the Original Issue
Date for a series of the Preferred Stock effect a subdivision of
the outstanding Common Stock, the Conversion Value then in effect
immediately before that subdivision shall be proportionately
decreased, and conversely, if the Company shall at any time or
from time to time after the Original Issue Date for a series of
the Preferred Stock combine the outstanding shares of Common
Stock, the Conversion Value then in effect immediately before the
combination shall be proportionately increased. Any adjustment
under this Paragraph 7(d) shall become effective at the close of
business on the date the subdivision or combination becomes
effective.
(c) Adjustment for Reclassification, Exchange, or Substitution.
If the Common Stock issuable upon the conversion of the Preferred
Stock shall be changed into the same or a different number of
shares of any class or classes of stock, whether by capital
reorganization, reclassification, or otherwise (other than a
subdivision or combination of shares or stock dividend provided
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<PAGE> 4
for above, or a reorganization, merger, consolidation, or sale of
assets provided for elsewhere in this Paragraph 7), then and in
each such event the holder of each share of Preferred Stock shall
have the right thereafter to convert such share into the kind and
amount of shares of stock and other securities and property
receivable upon such reorganization, reclassification, or other
change, by holders of the number of shares of Common Stock into
which such shares of Preferred Stock might have been convened
immediately prior to such reorganization, reclassification, or
change all subject to further adjustments as provided herein.
(d) Reorganization, Mergers, Consolidations, or Sales of Assets.
If at any time or from time to time there shall be a capital
reorganization of the Common Stock (other than a subdivision,
combination, reclassification, or exchange of shares provided for
elsewhere in this Paragraph 7) or a merger or consolidation of
the Company with or into another corporation, or the sale of all
or substantially all of the company's assets to any other person,
then, as a part of such reorganization, merger, consolidation, or
sale, provision shall be made so that the holders of the
Preferred Stock shall thereafter be entitled to receive upon
conversion of the Preferred Stock, the number of shares of stock
or other securities or property of the Company, or of the
successor corporation resulting from such merger or consolidation
or sale, to which a holder of Common Stock deliverable upon
conversion would have been entitled on such capital
reorganization, merger, consolidation, or sale. In any such case,
appropriate adjustment shall be made in the application of the
provisions of this Paragraph 7 with respect to the rights of the
holders of the Preferred Stock after the reorganization, merger,
consolidation, or sale to the end that the provisions of this
Paragraph 7 (including adjustment of the Conversion Value then in
effect and the number of shares purchasable upon conversion of
the Preferred Stock) shall be applicable after that event as
nearly equivalent as may be practicable.
(e) Definition. The term "Additional Shares of Common Stock" as
used herein shall mean all shares of Common Stock issued or
deemed issued (including a right or option to purchase Common
Stock, or shares of stock or an obligation convertible into
Common Stock) by the Company after the Original Issue Date for a
series of Preferred Stock, whether or not subsequently reacquired
or retired by the Company, other than (1) shares of Common Stock,
and (2) shares or other securities issued to employees, officers,
directors, consultants or other persons performing services for
the Company pursuant to any stock offering, option, plan, or
arrangement approved by the Board of Directors of the Company.
(f) Notices of Record Date. In the event of (i) any taking by the
Company of a record of the holders of any class or series of
securities for the purpose of determining the holders thereof who
are entitled to receive any dividend or other distribution or
(ii) any reclassification or recapitalization of the capital
stock of the Company, any merger or consolidation of the Company,
or any transfer of all or substantially all of the assets of the
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<PAGE> 5
Company to any other corporation, entity, or person, or any
voluntary or involuntary dissolution, liquidation, or winding up
of the Company, the Company shall mail to each holder of
Preferred Stock at least 30 days prior to the record date
specified therein, a notice specifying (A) the date on which any
such record is to be taken for the purpose of such dividend or
distribution and a description of such dividend or distribution,
(B) the date on which any such reorganization, reclassification,
transfer, consolidation, merger, dissolution, liquidation, or
winding up is expected to become effective, and (C) the time, if
any is to be fixed, as to when the holders of record of Common
Stock (or other securities) shall be entitled to exchange their
shares of Common Stock (or other securities) for securities or
other property deliverable upon such reorganization,
reclassification, transfer, consolidation, merger, dissolution,
liquidation, or winding up.
(g) Fractional Shares. No fractional shares of Common Stock shall
be issued upon conversion of Preferred Stock. In lieu of any
fractional shares to which the holder would otherwise be
entitled, the Company shall pay cash equal to the product of such
fraction multiplied by the fair market value of one share of the
Company's Common Stock on the date of conversion, as determined
in good faith by the Board.
(h) Notices. Any notice required by the provisions of this
Paragraph 7 to be given to the holder of shares of the Preferred
Stock shall be deemed given when personally delivered to such
holder or five (5) business days after the same has been
deposited in the United States mail, certified or registered
mail, return receipt requested, postage prepaid, and addressed to
each holder of record at his address appearing on the books of
the Company.
(i) Payment of Taxes. The Company will pay all taxes and other
governmental charges that may be imposed in respect of the issue
or delivery of shares of Common Stock upon conversion of shares
of Preferred Stock.
(j) No Dilution or Impairment. The Company shall not amend its
Articles of Incorporation or participate in any reorganization,
transfer of assets, consolidation, merger, dissolution, issue, or
sale of securities or any other voluntary action, for the purpose
of avoiding or seeking to avoid the observance or performance of
any of the terms to be observed or performed hereunder by the
Company, but will at all times in good faith assist in carrying
out all such action as may be reasonably necessary or appropriate
in order to protect the conversion rights of the holders of the
Preferred Stock against dilution or other impairment.
8. No Preemptive Rights.
No holder of the Series A Preferred Stock of the Corporation
shall be entitled, as of right, to purchase or subscribe for any part of
the unissued stock of the Corporation or of any stock of the Corporation
to be issued by reason of any increase of the authorized capital stock
of the Corporation, or to purchase or subscribe for any
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<PAGE> 6
bonds, certificates of indebtedness, debentures or other securities
convertible into or carrying options or warrants to purchase stock or
other securities of the Corporation or to purchase or subscribe for any
stock of the Corporation purchased by the Corporation or by its nominee
or nominees, or to have any other preemptive rights now or hereafter
defined by the laws of the State of Colorado.
9. No Reissuance of Preferred Stock.
No share or shares of Preferred Stock acquired by the Company by
reason of purchase, conversion, or otherwise shall be reissued, and all
such shares shall be cancelled, retired, and eliminated from the shares
which the Company shall be authorized to issue.
IN WITNESS WHEREOF, said REDWOOD BROADCASTING, INC, has caused
this Certificate of Designations, Preferences and Rights of Series A Convertible
Preferred Stock to be duly executed by its President and attested by its
Secretary and has caused its corporate seal to be affixed hereto, this 3lst day
of December, 1997.
REDWOOD BROADCASTING, INC.
By: /s/ John C. Power
--------------------------------
John C. Power, President
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<PAGE> 1
EXHIBIT 4.3
CERTIFICATE OF DESIGNATION OF
RIGHTS AND PREFERENCES OF
SERIES B CONVERTIBLE PREFERRED STOCK
OF
REDWOOD BROADCASTING, INC.,
a Colorado corporation
Pursuant to Section 7-106-102 of the
General Corporation Law of the State of Colorado
Redwood Broadcasting, Inc., a corporation organized and existing under
the laws of the state of Colorado (the "CORPORATION"), DOES HEREBY CERTIFY that
pursuant to the authority contained in its Articles of Incorporation, as
amended, and in accordance with the provisions of the General Corporation Law of
the State of Colorado, the Corporation's Board of Directors has duly adopted the
following resolution creating a series of the class of its authorized Preferred
Stock, designated as Series B Convertible Preferred Stock.
RESOLVED THAT:
Whereas, by virtue of the authority contained in its Articles of
Incorporation, as amended, the Corporation has the authority to issue Two
Million Five Hundred Thousand (2,500,000) shares of $0.04 par value Preferred
Stock, the designation and amount thereof and series, together with the powers,
preferences, rights, qualifications, limitations or restrictions thereof, to be
determined by the Board of Directors pursuant to the applicable law of the State
of Colorado;
Whereas, the Board of Directors previously designated Eight Hundred
Thousand (800,000) shares of the Corporation's Preferred Stock as Series A
Convertible Preferred Stock.
Now therefore, the Company's Board of Directors hereby establishes a
series of the class of Preferred Stock authorized to be issued by the
Corporation as above stated, with the designations and amounts thereof, together
with the voting powers, preferences and relative, participating, optional and
other special rights of the shares of each such series, and the qualifications,
limitations or restrictions thereof, to be as follows:
1. Designations and Amounts. Four Hundred Thousand (400,000) shares of
the Corporation's authorized Preferred Stock are designated as Series B
Convertible Preferred Stock.
2. Definitions.
For purposes of this Resolution, the following definitions shall apply:
(a) "Average Fair Market Value" means, with respect to any date,
the average of the Closing Price of a share of Common Stock for the twenty
trading days preceding such date; provided, however, if there are not publicly
reported trades of the Common Stock for at least twenty days during the
forty-five day period preceding any such
<PAGE> 2
date, the "Average Fair Market Value" shall be the fair market value of the
Common Stock as of such date as reasonably determined by the Board of Directors.
(b) "Board of Directors" shall mean the Board of Directors of the
Corporation.
(c) "Closing Price" means, with respect to any date, the publicly
reported closing sales price for a share of Common Stock on such date on the
primary market or exchange where the Common Stock is then traded.
(d) "Common Stock" means the Common Stock, par value $0.004 per
share, of the Corporation.
(e) "Corporation" shall mean Redwood Broadcasting, Inc., a
corporation organized and existing under the laws of the state of Colorado.
(f) "Junior Stock" shall mean the Common Stock and any other class
or series of the capital stock of the Corporation (unless such other class or
series of capital stock constitutes "Parity Stock" or "Senior Stock").
(g) "Liquidation Value" shall mean, with respect to each share of
Series B Convertible Preferred Stock, an amount equal to $5.85 per share (as
adjusted for any stock dividends, combinations or splits with respect to such
shares) plus the amount of any accrued but unpaid dividends with respect to such
share.
(h) "Parity Stock" shall mean any class or series of the capital
stock of the Corporation, if the terms of such class or series of capital stock
specifically provide that the holders thereof and the holders of Series B
Convertible Preferred Stock shall be entitled to the receipt of amounts
distributable upon liquidation, dissolution or winding up, as the case may be,
in proportion to their respective amounts of accrued and unpaid dividends per
share and/or liquidation preferences, as the case may be, without one having
preference or priority over the other.
(i) "Series B Issue Date" means the original date of issue of any
shares of the Series B Convertible Preferred Stock
(j) "Senior Stock" shall mean any class or series of capital stock
of the Corporation, if the terms of such class or series of capital stock
specifically provide that the holders thereof shall be entitled to the receipt
of amounts distributable on liquidation, dissolution or winding up, as the case
may be, in preference or priority to the holders of Series B Convertible
Preferred Stock.
3. Dividends.
The holders of shares of the Series B Convertible Preferred Stock shall
be entitled to receive dividends, out of any assets legally available therefor,
prior and in preference to any declaration or payment of any cash dividend on
the Common Stock or any other Junior Stock of this Corporation and if any
dividend shall have not been declared and paid when due, pari passu with the
payment of any cash dividend on any Parity Stock, at the rate of
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<PAGE> 3
$0.702 per share per annum and no more (as adjusted for any stock dividends,
combinations or splits with respect to such shares) payable on each semi-annual
anniversary of the Series B Issue Date; provided, however, notwithstanding the
foregoing, the dividends payable for the twelve-month period immediately
following the Series B Issue Date shall be paid on the Series B Issue Date. All
such dividends shall be paid in cash; provided, however, dividends payable with
respect to any period beginning on or after the first anniversary of the Series
B Issue Date may be paid, at the option of the Company, 50% in cash and 50% in
shares of Common Stock which shall be valued for these purposes at the Average
Fair Market Value of the Common Stock as of the date such dividend is paid.
4. Voting Rights.
The holders of shares of Series B Convertible Preferred Stock shall have
no voting rights except for those minimum voting rights required by the Business
Corporation Act of the state of Colorado, in which case the Series B Convertible
Preferred Stock shall vote together with the Common Stock as a single class,
unless the Business Corporation Act of the state of Colorado requires that the
Series B Convertible Preferred Stock has the right to vote separately as a
single class.
5. Conversion.
(a) Holder's Right to Convert.
(i) Subject to compliance with any applicable governmental rules
and regulations, each share of Series B Convertible Preferred Stock shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share at the office of this Corporation or any transfer agent
for the Series B Convertible Preferred Stock, into a number of fully paid and
nonassessable share(s) of Common Stock equal to the Conversion Rate (as defined
below) in effect at the time of conversion. Conversion of the Series B
Convertible Preferred Stock may be effected by any holder thereof upon the
surrender to the Corporation at the principal office of the Corporation, or at
the office of any agent or agents of the Corporation, as may be designated by
the Board of Directors (the "Transfer Agent", which may be the Corporation), of
the certificate for such shares of Series B Convertible Preferred Stock to be
converted accompanied by a written notice (the "Conversion Notice") stating that
such holder elects to convert all or a specified whole number of such shares in
accordance with the provisions of this subsection 5(a) and specifying the name
or names in which such holder wishes the certificate or certificates for shares
of Common Stock to be issued. (The date upon which such items are surrendered to
the Corporation is the "Conversion Notice Date").
(ii) In case the Conversion Notice shall specify a name or names
other than that of such holder, such notice shall be accompanied by payment of
all transfer taxes payable upon the issuance of shares of Common Stock in such
names or names. As promptly as practicable after the surrender of such
certificate or certificates and the receipt of such Conversion Notice relating
thereto and, if applicable, payment of all transfer taxes (or the demonstration
to the satisfaction of the Corporation that such taxes have been paid), the
Corporation shall deliver or cause to be delivered (i) certificates representing
the number of validly issued, fully paid and nonassessable full shares of Common
Stock to which the
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<PAGE> 4
holder of the shares of Series B Convertible Preferred Stock being converted
shall be entitled, and (ii) if less than the full number of shares of Series B
Convertible Preferred Stock evidenced by the surrendered certificate or
certificates is being converted, a new certificate or certificates, of like
tenor, for the number of shares of Series B Convertible Preferred Stock
evidenced by such surrendered certificate or certificates less the number of
shares of Series B Convertible Preferred Stock being converted. The rights of
the holder of shares of Series B Convertible Preferred Stock as to the shares
being converted shall cease as of the Conversion Notice Date except for (i) the
right to receive shares of Common Stock in accordance herewith upon surrender of
the certificate or certificates representing the shares of Series B Convertible
Preferred Stock to be converted, and (ii) the right to receive any accrued and
unpaid dividends thereon. In the event of any conversion pursuant to Section
5(a), any accrued and unpaid dividends with respect to the shares of Series B
Convertible Preferred Stock converted shall be paid, at the option of the
Company (i) by issuing an additional number of shares of Common Stock to each
holder equal to the aggregate amount of accrued and unpaid dividends with
respect to such shares divided by the Conversion Price in effect as of the
Conversion Notice Date, (ii) by paying such dividends (either in cash or in
Common Stock, as permitted pursuant to Section 3) on or before the date which is
30 days after the Conversion Notice Date, or (iii) any combination of (i) and
(ii). The person entitled to receive the shares of Common Stock shall be treated
for all purposes as having become the record holder of such shares of Common
Stock at the time of such surrender.
(b) The Corporation's Election to Cause Conversion. The Corporation
may, at its election, cause each share of Series B Convertible Preferred Stock
to be automatically converted into a number of fully paid and nonassessable
share(s) of Common Stock equal to the Conversion Rate (as defined below) then in
effect as of any date (an "Automatic Conversion Date") on which the Closing
Price for each of the twenty trading days preceding such date equals or exceeds
$8.35 per share. The Corporation shall effectuate the election described in the
preceding sentence by mailing notice of the Corporation's election to cause the
conversion of the Series B Convertible Preferred Stock to the holders of record
thereof not less than five (5) days following the Automatic Conversion Date.
Notwithstanding the foregoing, in no event shall such shares be converted
pursuant to this Section 5(b) prior to the first anniversary of the Series B
Issue Date or at any time when there are any accrued and unpaid dividends
outstanding on the Series B Convertible Preferred Stock. Effective immediately
upon such conversion, the rights of the holders of shares of Series B
Convertible Preferred Stock as to all such shares shall cease, except for (i)
the right to receive shares of Common Stock in accordance herewith upon
surrender of the certificate or certificates representing the shares of Series B
Convertible Preferred Stock to be converted, and (ii) the right to receive any
accrued and unpaid dividends thereon. The person entitled to receive the shares
of Common Stock shall be treated for all purposes as having become the record
holder of such shares of Common Stock at the Automatic Conversion Date. Upon
surrender by the holders of Series B Convertible Preferred Stock of their
certificate(s) representing such stock, and, if applicable, payment of all
transfer taxes (or the demonstration to the satisfaction of the Corporation that
such taxes have been paid), the Corporation shall deliver or cause to be
delivered certificates representing the number of validly issued, fully paid and
nonassessable full shares of Common Stock to which such holder is entitled.
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<PAGE> 5
(c) "Conversion Rate" The "Conversion Rate" shall equal, subject to
the adjustments set forth in Section 5(f) and 5(g), an amount equal to $5.85
divided by the Conversion Price. The "Conversion Price" shall equal, at any
time, (i) $5.85 minus (ii) (x) the aggregate amount of accrued dividends per
share which are then unpaid (excluding any dividends that accrued less than
fifteen (15) days prior to such time), times (y) 0.64103; provided, however, for
the purposes of computing the Conversion Price with respect to any conversion
pursuant to Section 5(a) or 5(b), any dividends that are paid on or before the
date which is thirty (30) days after the Conversion Notice Date shall be treated
as having been paid immediately prior to the time of such conversion.
(d) The Corporation shall at all times reserve and keep available
for issuance upon the conversion of the Series B Convertible Preferred Stock,
free from any preemptive rights, such number of its authorized but unissued
shares of Common Stock as will from time to time be sufficient to permit the
conversion of all outstanding shares of Series B Convertible Preferred Stock,
and shall take all action required to increase the authorized number of shares
of Common Stock (if necessary) to permit the conversion of all outstanding
shares of Series B Convertible Preferred Stock.
(e) In connection with the conversion of any shares of Series B
Convertible Preferred Stock, no fractions of shares of Common Stock shall be
issued, but in lieu thereof the Corporation shall pay a cash adjustment in
respect of such fractional interest in an amount equal to such fractional
interest multiplied by the Average Fair Market Value as of the Conversion Notice
Date (or date of conversion pursuant to Section 5(b)).
(f) Adjustments. In the event this Corporation subdivides the
outstanding shares of Common Stock, or issues additional shares of Common Stock
as a dividend on shares of Common Stock, the Conversion Rate shall be
proportionately increased, and in the event the Corporation combines the
outstanding shares of Common Stock, the Conversion Rate shall be proportionately
decreased.
(g) Effect of Certain Transactions.
(i) In case of any capital reorganization or reclassification of
outstanding shares of Common Stock or in case of any merger of the Corporation
with or into another corporation, or in case of any sale or conveyance to
another corporation of all or substantially all of the assets or property of the
Corporation (each of the foregoing being referred to as a "Transaction"), each
share of Series B Convertible Preferred Stock then outstanding shall thereafter
be convertible into, in lieu of the Common Stock issuable upon such conversion
prior to consummation of such Transaction, the kind and amount of shares of
stock and other securities and property receivable (including cash) upon the
consummation of such Transaction by a holder of that number of shares of Common
Stock into which one share of Series B Convertible Preferred Stock was
convertible immediately prior to such Transaction; provided, however, that, if
in connection with the Transaction a tender or exchange offer shall have been
made and there shall have been acquired pursuant thereto more than 50% of the
outstanding shares of Common Stock, each share of Series B Convertible Preferred
Stock then outstanding shall thereafter be convertible into the kind and amount
of shares of stock and other securities and property (including cash) receivable
by a holder of Series B Convertible Preferred Stock had the holder thereof (i)
immediately
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prior to such tender or exchange offer converted that portion of the shares of
Series B Convertible Preferred Stock equal to the percentage of shares of the
then outstanding Common Stock so purchased in the tender or exchange offer and
accepted such offer and sold therein all of such shares of Common Stock obtained
upon such conversion and (ii) converted the remaining portion of the Series B
Convertible Preferred Stock into shares of Common Stock immediately prior to the
consummation of such Transaction. In any such case, if necessary, appropriate
adjustment (as determined by the Board of Directors) shall be made in the
application of the provisions set forth in this Section 5(g) with respect to
rights and interests thereafter of the holders of shares of Series B Convertible
Preferred Stock to the end that the provisions set forth herein for the
protection of the conversion rights of the Series B Convertible Preferred Stock
shall thereafter be applicable, as nearly as reasonably may be, to any such
other shares of stock and other securities and property (other than cash)
deliverable upon conversion of the shares of Series B Convertible Preferred
Stock remaining outstanding (with such adjustments in the conversion price and
number of shares issuable upon conversion and such other adjustments in the
provisions hereof as the Board of Directors shall determine to be appropriate).
In case securities or property (including cash) other than Common Stock shall be
issuable or deliverable upon conversion as aforesaid, then all references in
this Section 5(g) shall be deemed to apply, so far as appropriate and as nearly
as may be, to such other securities or property.
(ii) Notwithstanding anything contained herein to the contrary,
the Corporation will not effect any Transaction unless, prior to the
consummation thereof, the surviving or resulting person (if not the Corporation)
thereof shall assume, by written instrument delivered to each holder of shares
of Series B Convertible Preferred Stock, the obligation to deliver to such
holder such cash or other securities to which, in accordance with the foregoing
provisions, such holder is entitled.
6. Liquidation, Dissolution or Winding Up.
(a) If the Corporation shall commence a voluntary case under the
United States bankruptcy laws or any other applicable United States or state
bankruptcy, insolvency or similar law, or consent to the entry of an order for
relief in an involuntary case under such law or to the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation, or of any substantial part of its
property, or make an assignment for the benefit of its creditors, or admit in
writing its inability to pay its debts generally as they become due, or if a
decree or order for relief in respect of the Corporation shall be entered by a
court having jurisdiction in the premises in an involuntary case under the
United States or state bankruptcy, insolvency or similar law, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or other
similar official) of the Corporation or of any substantial part of its property,
or ordering the winding up or liquidation of its affairs, and on account of such
event the Corporation shall liquidate, dissolve or wind up, or if the
Corporation shall otherwise liquidate, dissolve or wind up, no distribution
shall be made (i) to the holders of shares of Junior Stock unless, prior
thereto, the holders of shares of Series B Convertible Preferred Stock shall
have received the Liquidation Value with respect to each share, or (ii) to the
holders of shares of Parity Stock unless the holders of shares of Series B
Convertible Preferred Stock shall have received distributions made ratably to
the holders of the Series B Convertible Preferred Stock and the Parity Stock in
proportion to the sum of the total Liquidation Value of all outstanding shares
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of Series B Convertible Preferred Stock and the total amounts to which the
holders of all shares of Parity Stock would be entitled upon such liquidation,
dissolution or winding up.
(b) Neither the consolidation, merger or other business combination
of the corporation with or into any other entity nor the sale of all or
substantially all of the assets of the Corporation shall be deemed to be a
liquidation, dissolution or winding up of the corporation for purposes of this
Section 6.
7. No Preemptive Rights.
No holder of the Series B Convertible Preferred Stock of the Corporation
shall be entitled, as of right, to purchase or subscribe for any part of any
unissued stock of the Corporation or of any stock of the Corporation to be
issued by reason of any increase of the authorized capital stock of the
Corporation, or to purchase or subscribe for any bonds, certificates of
indebtedness, debentures or other securities convertible into or carrying
options or warrants to purchase stock or other securities of the Corporation or
to purchase or subscribe for any stock of the Corporation purchased by the
Corporation or its nominee or nominees, or to have any other preemptive rights
now or hereafter defined by the laws of the State of Colorado.
8. Reacquired Shares.
Any shares of Series B Convertible Preferred Stock acquired by the
Corporation by reason of purchase, conversion or otherwise shall be retired and
cancelled promptly after the acquisition thereof. All such shares of Series B
Convertible Preferred Stock shall, upon their cancellation, become authorized
but unissued shares of preferred stock of the Corporation, $.004 par value.
IN WITNESS WHEREOF, REDWOOD BROADCASTING, INC., has caused this
Certificate of Designation, Rights and Preferences of Series B Convertible
Preferred Stock to be duly executed by its President this 28th day of May, 1999.
REDWOOD BROADCASTING, INC.
/s/ Ron Conquest
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Ron Conquest
President
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