SECOND AMENDED AND RESTATED ARTICLES OF INCORPORATION OF
TOUCHTUNES MUSIC CORPORATION
Pursuant to the provisions of Section 78.403 of the Nevada Revised
Statutes, the undersigned Corporation adopts the following Second Amended and
Restated Articles of Incorporation as of this date:
FIRST: The name of the Corporation is TOUCHTUNES MUSIC CORPORATION.
SECOND: The original Articles of Incorporation of the Corporation were
filed by the Secretary of State on the 9th day of August, 1990.
THIRD: The name and address of the original incorporator of the
Corporation was: LESLIE H. SHAW, 2760, So. Highland Dr. #300 Salt Lake City,
Utah 84106.
FOURTH: The board of directors of the Corporation, at a meeting duly
convened and held on the 19th day of April 2000, adopted a resolution
authorizing a further amendment and restatement of the original Articles of
Incorporation in order to increase the capital stock which the Corporation is
authorized to issue, from 50,000,000 shares of Class A voting common stock and
15,000,000 shares of Series A Preferred Stock to an aggregate of 50,000,000
shares of Class A voting common stock, 15,000,000 shares of Series A Preferred
Stock and 10,000,000 shares of Series B Preferred Stock. The rights,
privileges and preferences of each class of capital stock are set forth below
in ARTICLE SIXTH, containing the Amended and Restated Articles of Incorporation
in full.
FIFTH: The number of shares of the Corporation outstanding and entitled to
vote on an amendment to the Articles of Incorporation are 14,658,644 shares of
Class A voting common stock and 12,843,960 shares of Series A Preferred Stock,
voting as a single class. The changes and amendments made hereby, have been
consented to and approved in writing by stockholders holding 10,001,920 shares
of Class A voting common stock and 12,843,960 shares of Series A Preferred
Stock, being at least a majority of each such class, the only classes of stock
outstanding and entitled to vote thereon.
SIXTH: The Articles of Incorporation, as amended to the date of this
certificate, are hereby restated as follows:
1. NAME
1.1 The name of the Corporation is TOUCHTUNES MUSIC CORPORATION.
2. PRINCIPAL OFFICE
2.1 The initial principal office of the Corporation shall be located at 216
South Fourth Street, Las Vegas, Nevada, 89106, and/or such other place as
the directors shall designate.
3. DURATION
3.1 The period of duration of the Corporation is perpetual.
4. PURPOSES AND POWERS
4.1 The purposes for which the Corporation is organized are to engage in any
activity or business not in conflict with the laws of the State of Nevada
or of the United States of America, and without limiting the generality
of the foregoing, specifically, to have and to exercise all the powers
now or hereafter conferred by the laws of the State of Nevada upon
Corporations organized and any and all acts amendatory thereof and
supplemental thereto.
5. AUTHORIZED SHARES
5.1 The Corporation is authorized to issue three classes of stock to be
designated, respectively, "Class A voting common stock", "Series A
Preferred Stock" and "Series B Preferred Stock". The total number of
shares which the Corporation is authorized to issue is seventy-five
million (75,000,000) shares.
Fifty million (50,000,000) shares shall be Class A voting common stock,
each having a par value of one-tenth of one cent ($.001). Fifteen million
(15,000,000) shares shall be Series A Preferred Stock, each having a par
value of one tenth of one cent ($.001). Ten million (10,000,000) shares
shall be Series B Preferred Stock, each having a par value of one tenth
of one cent ($.001).
6. PRE-EMPTIVE RIGHTS
6.1 No stockholder of the Corporation shall, because of his ownership of
stock, have a pre-emptive or other right to purchase, subscribe for or
take part of any of the notes, debentures, bonds or other securities
convertible into or carrying options for warrants to purchase stock of
the Corporation issued, optioned or sold by it after its incorporation,
except as may be otherwise stated in an agreement between the Corporation
and stockholders or in these Second Amended and Restated Article of
Incorporation or by an amended certificate of said Articles duly filed,
may at any time be issued, optioned for sale and sold or disposed of by
the Corporation pursuant to the resolution of its Board of Directors to
such person, persons or organizations and upon such terms as may to such
Board of Directors seem proper.
THE RIGHTS, PREFERENCES, PRIVILEGES AND RESTRICTIONS GRANTED TO AND
IMPOSED UPON THE CLASS A VOTING COMMON STOCK, THE SERIES A PREFERRED
STOCK AND THE SERIES B PREFERRED STOCK ARE HEREINAFTER SET FORTH.
7. VOTING OF SHARES
7.1 Each outstanding share of the Class A voting common stock of the
Corporation shall be entitled to one vote on each matter submitted to a
vote at a meeting of the stockholders. Each shareholder shall be
entitled to vote his or its shares in person or by proxy, executed in
writing by such shareholder or by its duly authorized attorney in fact.
At each election for directors, every shareholder entitled to vote at
such election shall have the right to vote in person or by proxy, the
number of shares owned by him or it for as many persons as there are
directors to be elected and for whose election he or it has the right to
vote, but the shareholder shall have no right, whatsoever, to accumulate
his or its votes with regard to such election.
7.2 In addition to the voting rights otherwise provided for herein and by
law, the holder of each share of Series A Preferred Stock and of Series B
Preferred Stock shall be entitled to the number of votes equal to the
number of shares of Class A voting common stock into which such shares of
Series A Preferred Stock and Series B Preferred Stock could then be
converted, and with respect to such, shall have full voting rights and
powers equal to the voting rights and powers of the holders of Class A
voting common stock, voting together with the Class A voting common stock
as a single class, and shall be entitled to notice of any stockholders'
meeting in accordance with the By-laws of the Corporation. Fractional
votes shall not, however, be permitted and any fractional voting rights
resulting from the above formula (after aggregating all shares into which
shares of Series A Preferred Stock and Series B Preferred Stock held by
each holder could be converted) shall be rounded to the nearest whole
number (with one-half being rounded upward).
8. DIVIDEND PROVISIONS
8.1 The holders of Class A voting common stock and Series A Preferred Stock
are entitled to receive any dividend or any distribution declared by the
Corporation, on a share per share basis, without any distinction as to
Classes, as on an as-if-converted to Class A voting common stock basis as
for the Series A Preferred Stock.
8.2 The holders of Series B Preferred Stock are entitled to receive, during
each fiscal year of the Corporation, a cumulative and preferential
dividend of 9% on the full amount of the consideration received by the
Corporation for each share held, which is $2.25, which dividend shall
accrue daily from and after the date of issuance of each share but shall
only become payable from June 30, 2002. The holders of Series B
Preferred Stock shall not be entitled to receive any other dividend. No
dividend shall be declared or paid, during any fiscal year on any other
classes of shares issued by the Corporation unless said cumulative and
preferential dividend shall have been declared and paid to the holders of
Series B Preferred Stock.
8.3 The holders of Class A voting common stock and of Series A Preferred
Stock are not entitled to receive any dividend, the payment of which
would reduce the net asset value of the Corporation to a value which
would be less than the redemption price of the issued and outstanding
shares of Series B Preferred Stock.
9. LIQUIDATION
9.1 Upon any liquidation, dissolution or winding-up of the Corporation,
whether voluntary or involuntary, holders of Class A voting common stock,
of Series A Preferred Stock and of Series B Preferred Stock are entitled
to share the residual assets of the Corporation on a share per share
basis without any distinction as to classes once the cumulative and
preferential dividend shall have been declared and paid on the Series B
Preferred Stock. For the purposes of this Section 9.1, the number of
Series A Preferred Stock and Series B Preferred Stock is calculated on an
as-if-converted to Class A voting common stock basis.
10. CONVERSION OF SERIES A PREFERRED STOCK
The holders of Series A Preferred Stock shall have conversion rights as
follows (the "Series A Conversion Rights"):
10.1 Right to Convert. Each share of Series A Preferred Stock shall be
convertible, at the option of the holder thereof, at any time and from
time to time, into such number of fully paid and non-assessable shares of
Class A voting common stock as is determined by dividing $1.50 (the
"Original Series A Issue Price") by the Series A Conversion Price (as
defined below) in effect at the time of conversion. The conversion price
at which shares of Class A voting common stock shall be deliverable upon
conversion of Series A Preferred Stock without payment of additional
consideration by the holder thereof (the "Series A Conversion Price")
shall initially be $1.50 per share. Such initial Series A Conversion
Price, and the rate at which shares of Series A Preferred Stock may be
converted into shares of Class A voting common stock, shall be subject to
adjustment as provided below.
In the event of a liquidation of the Corporation, the Series A Conversion
Rights shall terminate at the close of business on the first full day
preceding the date fixed for the payment of any amounts distributable on
liquidation to the holders of Series A Preferred Stock.
10.2 Fractional Shares. No fractional shares of Class A voting common stock
shall be issued upon conversion of Series A Preferred Stock. In lieu of
any fractional shares to which the holder would otherwise be entitled,
the Corporation shall pay cash equal to such fraction multiplied by the
then effective Series A Conversion Price.
10.3 Mechanics of Conversion
10.3.1 In order for a holder of Series A Preferred Stock to convert shares of
Series A Preferred Stock into shares of Class A voting common stock, such
holder shall surrender the certificate or certificates for such shares of
Series A Preferred Stock, at the office of the transfer agent for the
Series A Preferred Stock (or at the principal office of the Corporation
if the Corporation serves as its own transfer agent), together with
written notice that such holder elects to convert all or any number of
the shares of the Series A Preferred Stock represented by such
certificate or certificates. Such notice shall state such holder's name
or the names of the nominees in which such holder wishes the certificate
or certificates for shares of Class A voting common stock to be issued.
If required by the Corporation, certificates surrendered for conversion
shall be endorsed or accompanied by a written instrument or instruments
of transfer, in form satisfactory to the Corporation, duly executed by
the registered holder or his or its attorney duly authorized in writing.
The date of receipt of such certificates and notice by the transfer agent
(or by the Corporation if the Corporation serves as its own transfer
agent) shall be the conversion date (the "Series A Conversion Date"). The
Corporation shall, as soon as practicable after the Series A Conversion
Date, issue and deliver at such office to such holder of Series A
Preferred Stock, or to his or its nominees, a certificate or certificates
for the number of shares of Class A voting common stock to which such
holder shall be entitled, together with cash in lieu of any fraction of a
share and a certificate or certificates for the number of Class A
Preferred Stock not converted.
10.3.2 The Corporation shall at all times when the Series A Preferred Stock
shall be outstanding, reserve and keep available out of its authorized
but unissued stock, for the purpose of effecting the conversion of the
Series A Preferred Stock, such number of its duly authorized shares of
Class A voting common stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of Series A Preferred
Stock. Before taking any action which would cause an adjustment reducing
the Series A Conversion Price below the then par value of shares of Class
A voting common stock issuable upon conversion of the Series A Preferred
Stock, the Corporation will take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and non-assessable shares of Class A
voting common stock at such adjusted Series A Conversion Price.
10.3.3 On the Series A Conversion Date, all shares of Series A Preferred Stock
which shall have been surrendered for conversion as herein provided shall
no longer be deemed to be outstanding and all rights with respect to such
shares, including the rights, if any, to receive notices and to vote,
shall immediately cease and terminate on the Series A Conversion Date,
except only the right of the holders thereof to receive shares of Class A
voting common stock in exchange therefor.
10.4 Adjustments to Series A Conversion Price for Diluting Issues
10.4.1 Special Definitions. For purposes of this Section 10.4 only, the
following definitions shall apply:
10.4.1.1. "Option" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire Class A voting
common stock or Convertible Securities, excluding rights or
options to acquire shares of Class A voting common stock granted
to employees, directors or consultants of the Corporation
pursuant to the Corporation's stock purchase or stock option
plans or other arrangements that are approved by the Board of
Directors;
10.4.1.2. "Original Series A Issue Date" shall mean the date on which
a share of Series A Preferred Stock was first issued or deemed
to have been first issued. For the purposes hereof, a share of
Series A Preferred Stock shall be deemed to have been first
issued on the date on which the first "Class B" share of the
capital stock of Touchtunes Digital Jukebox Inc. is issued to
Societe Innovatech du Grand Montreal and Sofinov, Societe
financiere d'innovations Inc. pursuant to a Subscription
Agreement made and entered into in the City and District of
Montreal on March 14th, 1997;
10.4.1.3. "Convertible Securities" shall mean any evidences of
indebtedness, shares or other securities directly or indirectly
convertible into or exchangeable for Class A voting common
stock;
10.4.1.4. "Additional Shares of Class A voting common stock" shall
mean all shares of Class A voting common stock issued (or,
pursuant to Section 10.4.3 below, deemed to be issued) by the
Corporation after the Original Series A Issue Date, other than
shares of Class A voting common stock issued or issuable upon
conversion of shares of Series A Preferred Stock or Series B
Preferred Stock.
10.4.2 No Adjustment of Series A Conversion Price. No adjustment in the number
of shares of Class A voting common stock into which the Series A
Preferred Stock is convertible shall be made, by adjustment to the
applicable Series A Conversion Price hereof:
10.4.2.1. unless the consideration per share (determined pursuant to
Section 10.4.5 for an Additional Share of Class A voting common
stock issued or deemed to be issued by the Corporation) is less
than the applicable Series A Conversion Price in effect on the
date of, and immediately prior to, the issue of such Additional
Shares of Class A voting common stock;
10.4.2.2. in the event that the Corporation issues and sells shares
of Series A Preferred Stock or Class A voting common stock to
the holders of Series A Preferred Stock or their affiliates at a
price equal to at least $1.50 per share (in the event that the
Corporation issues and sells shares of Series A Preferred Stock
or Class A voting common stock to the holders of Series A
Preferred Stock or their affiliates at a price that is less than
$1.50 per share, the adjustment in the number of shares of Class
A voting common stock into which the Series A Preferred Stock is
convertible shall be based upon the difference between $1.50 and
such lesser price per share);
10.4.2.3. in the event that the Corporation, in connection with the
initial public offering, issues to the underwriter or its
designee of the initial public offering, Options or Additional
Shares of Class A voting common stock in lieu of or in addition
to other compensation, including bridge loans with warrants;
provided, that the amount of such compensation is reasonable and
customary in the industry.
10.4.3 Issue of Securities, Deemed Issue of Additional Shares of Class A voting
common stock. If the Corporation at any time or from time to time after
the Original Series A Issue Date shall issue any Options or Convertible
Securities or shall fix a record date for the determination of holders of
any class of securities entitled to receive any such Options or
Convertible Securities, then the maximum number of shares of Class A
voting common stock (as set forth in the instrument relating thereto
without regard to any provision contained therein for a subsequent
adjustment of such number) issuable upon the exercise of such Options or,
in the case of Convertible Securities and Options therefor, the
conversion or exchange of such Convertible Securities, shall be deemed to
be Additional Shares of Class A voting common stock issued as of the time
of such issue or, in case such a record date shall have been fixed, as of
the close of business on such record date, provided that Additional
Shares of Class A voting common stock shall not be deemed to have been
issued unless the consideration per share (determined pursuant to Section
10.4.5 hereof) of such Additional Shares of Class A voting common stock
would be less than the applicable Series A Conversion Price in effect on
the date of and immediately prior to such issue, or such record date, as
the case may be, and provided further that in any such case in which
Additional Shares of Class A voting common stock are deemed to be issued:
10.4.3.1. no further adjustment in the Series A Conversion Price
shall be made upon the subsequent issue of Convertible
Securities or shares of Class A voting common stock upon the
exercise of such Options or conversion or exchange of such
Convertible Securities;
10.4.3.2. if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase
in the consideration payable to the Corporation, or decrease in
the number of shares of Class A voting common stock, issuable
upon the exercise, conversion or exchange thereof, the Series A
Conversion Price computed upon the original issue thereof (or
upon the occurrence of a record date with respect thereto), and
any subsequent adjustment based thereon, shall, upon any such
increase or decrease becoming effective, be recomputed to
reflect such increase or decrease insofar as it affects such
Options or the rights of conversion or exchange under such
Convertible Securities;
10.4.3.3. no readjustment pursuant to Section 10.4.3.2 above shall
have the effect of increasing the Series A Conversion Price to
an amount which exceeds the lower of (1) the Series A Conversion
Price on the original adjustment date, or (2) the Series A
Conversion Price that would have resulted from any issuance of
Additional Shares of Class A voting common stock between the
original adjustment date and such readjustment date;
10.4.3.4. if any Option or conversion privilege represented by a
Convertible Security shall expire or terminate without having
been exercised, the Series A Conversion Price adjusted upon the
issuance of such Option or Convertible Security shall be
readjusted to the Series A Conversion Price that would have been
in effect had the Option or Convertible Security not been
issued; provided, however, that nothing contained in this
Section 10.4.3.4 shall in any way whatsoever have an effect upon
any Class A voting common stock which has been issued upon
conversion of the Series A Preferred Stock;
10.4.3.5. in the event of any change in the number of shares of Class
A voting common stock issuable upon the exercise, conversion or
exchange of any Option or Convertible Security, including, but
not limited to a change resulting from the anti-dilution
provisions thereof, the Series A Conversion Price then in effect
shall forthwith be readjusted to such Series A Conversion Price
as would have been obtained had the adjustment which was made
upon the issuance of such Option or Convertible Security not
exercised or converted prior to such changes, been made upon the
basis of such change, but no further adjustment shall be made
for the actual issuance of Class A voting common stock upon the
exercise or conversion of any such Option or Convertible
Security.
10.4.4 Adjustment of Series A Conversion Price Upon Issuance of Additional
Shares of Class A voting common stock. Subject to the provisions of
Section 10.4.2 above, in the event the Corporation shall at any time
after the Original Series A Issue Date issue at least 1,000 Additional
Shares of Class A voting common stock (including Additional Shares of
Class A voting common stock deemed to be issued pursuant to Section
10.4.3, but excluding shares issued as a dividend or distribution as
provided in Section 10.6 or upon a stock split or combination as provided
in Section 10.5), without consideration or for a consideration per share
less than the Series A Conversion Price in effect on the date of and
immediately prior to such issue, then and in such event, such Series A
Conversion Price shall be reduced, concurrently with such issue to the
price at which such Additional Shares of Class A voting common stock are
issued.
Notwithstanding the foregoing, the applicable Series A Conversion Price
shall not be so reduced at such time if the amount of such reduction
would be an amount less than $.01, but any such amount shall be carried
forward and reduction with respect thereto made at the time of and
together with any subsequent reduction which, together with such amount
and any other amount or amounts so carried forward, shall aggregate $.01
or more.
10.4.5 Determination of Consideration. For purposes of this Section 10.4, the
consideration received by the Corporation for the issue of any Additional
Shares of Class A voting common stock shall be computed as follows:
10.4.5.1. Cash and Property. Such consideration shall:
10.4.5.1.1 insofar as it consists of cash, be computed at
the aggregate of cash received by the Corporation,
excluding amounts paid or payable for accrued interest
or accrued dividends;
10.4.5.1.2 insofar as it consists of property other than
cash, be computed at the fair market value thereof at
the time of such issue, as determined in good faith by
the Board of Directors; and
10.4.5.1.3 in the event Additional Shares of Class A voting
common stock are issued together with other shares or
securities or other assets of the Corporation for
consideration which covers both, be the proportion of
such consideration so received, computed as provided
in subparagraphs 10.4.5.1.1 and 10.4.5.1.2 above, as
determined in good faith by the Board of Directors.
10.4.5.2. Options and Convertible Securities. The consideration per
share received by the Corporation for Additional Shares of Class
A voting common stock deemed to have been issued pursuant to
Section 10.4.3, relating to Options and Convertible Securities,
shall be determined by dividing:
(x) the total amount, if any, received or receivable by
the Corporation as consideration for the issue of such
Options or Convertible Securities, plus the minimum
aggregate amount of additional consideration (as set
forth in the instruments relating thereto, without
regard to any provision contained therein for a
subsequent adjustment of such consideration) payable
to the Corporation upon the exercise of such Options
or the conversion or exchange of such Convertible
Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange
of such Convertible Securities, by
(y) the maximum number of shares of Class A voting common
stock (as set forth in the instruments relating
thereto, without regard to any provision contained
therein for a subsequent adjustment of such number)
issuable upon the exercise of such Options or the
conversion or exchange of such Convertible Securities.
10.5 Adjustments for Stock Splits and Combinations. If the Corporation shall
at any time, or from time to time after the Original Series A Issue Date,
effect a subdivision of the outstanding Class A voting common stock, the
Series A Conversion Price then in effect immediately before that
subdivision shall be proportionately decreased. Conversely, if the
Corporation shall at any time, or from time to time after the Original
Series A Issue Date, combine the outstanding shares of Class A voting
common stock into a smaller number of shares, the Series A Conversion
Price then in effect immediately before the combination shall be
proportionately increased. Any adjustment under this subsection shall
become effective at the close of business on the date the subdivision or
combination becomes effective.
10.6 Adjustments for Certain Dividends and Distributions. In the event the
Corporation at any time, or from time to time after the Original Series A
Issue Date, shall make or issue, or fix a record date for the
determination of holders of Class A voting common stock or Series B
Preferred Stock entitled to receive, a dividend or other distribution
payable only in additional shares of Class A voting common stock, then
and in each such event the Series A Conversion Price then in effect shall
be decreased as of the time of such issuance or, in the event such a
record date shall have been fixed, as of the close of business on such
record date, by multiplying the Series A Conversion Price then in effect
by a fraction:
(x) the numerator of which shall be the total number of shares of
Class A voting common stock issued and outstanding immediately
prior to the time of such issuance or the close of business on
such record date; and
(y) the denominator of which shall be the total number of shares of
Class A voting common stock issued and outstanding immediately
prior to the time of such issuance or the close of business on
such record date plus the number of shares of Class A voting
common stock issuable in payment of such dividend or
distribution;
provided, however, that if such record date shall have been
fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the
Series A Conversion Price shall be recomputed accordingly as
of the close of business on such record date and thereafter
the Series A Conversion Price shall be adjusted pursuant to
this subsection to reflect the actual payment of such dividend
or distribution.
10.7 Adjustments for Other Dividends and Distributions. In the event the
Corporation at any time, or from time to time after the Original Series A
Issue Date, shall make or issue, or fix a record date for the
determination of holders of Class A voting common stock entitled to
receive, a dividend or other distribution payable in securities of the
Corporation other than shares of Class A voting common stock (other than
Class A voting common stock dividends paid under 10.6 hereof) or in cash,
then and in each such event provision shall be made so that the holders
of Series A Preferred Stock shall receive upon conversion thereof in
addition to the number of shares of Class A voting common stock
receivable thereupon, the amount of securities or cash of the Corporation
that they would have received had their Series A Preferred Stock been
converted into Class A voting common stock on the date of such event and,
in respect of such securities of the Corporation receivable by them, had
they thereafter, during the period from the date of such event to and
including the Series A Conversion Date, retained such securities
receivable by them as aforesaid during such period giving application to
all adjustments called for during such period under this paragraph with
respect to the rights of the holders of Series A Preferred Stock.
10.8 Adjustment for Reclassification, Exchange or Substitution. If the Class
A voting common stock issuable upon the conversion of the Series A
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 for above, or a
reorganization, merger, consolidation, or sale of assets provided for
below), then and in each such event the holder of each such share of
Series A 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 Class A voting common
stock into which such shares of Series A Preferred Stock might have been
converted immediately prior to such reorganization, reclassification, or
change, all subject to further adjustment as provided herein.
10.9 Adjustment for Merger or Reorganization, Etc. In case of any
consolidation or merger of the Corporation with or into another
corporation or the sale of all or substantially all of the assets of the
Corporation to another corporation each share of Series A Preferred Stock
shall thereafter be convertible into the kind and amount of shares of
stock or other securities or property to which a holder of the number of
shares of Class A voting common stock of the Corporation deliverable upon
conversion of such Series A Preferred Stock would have been entitled upon
such consolidation, merger or sale; and, in such case, appropriate
adjustment (as determined in good faith by the Board of Directors) shall
be made in the application of the provisions set forth in this Section 10
with respect to the rights and interest thereafter of the holders of
Series A Preferred Stock, to the end that the provisions set forth in
this Section 10 (including provisions with respect to changes in and
other adjustments of the Series A Conversion Price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of
stock or other property thereafter deliverable upon the conversion of the
Series A Preferred Stock.
10.10 No Impairment. The Corporation will not, by amendment of this Second
Restated Certificate of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation, but will at all times in good faith assist
in the carrying out of all the provisions of this Section 10 and in the
taking of all such actions as may be necessary or appropriate in order to
protect the Series A Conversion Rights of the holders of Series A
Preferred Stock against impairment.
10.11 Certificate as to Adjustments. Upon the occurrence of each adjustment of
the Series A Conversion Price pursuant to this Section 10, the
Corporation at its expense shall promptly compute such adjustment in
accordance with the terms hereof and a certificate setting forth such
adjustment, and showing in detail the facts upon which such adjustment is
based. The Corporation shall, upon the written request at any time of any
holder of Series A Preferred Stock, furnish or cause to be furnished to
such holder a similar certificate setting forth (i) such adjustments,
(ii) the Series A Conversion Price then in effect; (iii) the number of
shares of Class A voting common stock and the amount, if any, of other
property which then would be received upon the conversion of Series A
Preferred Stock.
10.12 Notice of Record Date. In the event:
10.12.1 that the Corporation declares a dividend (or any other distribution)
on its Class A voting common stock payable in Class A voting common stock
or other securities of the Corporation;
10.12.2 that the Corporation subdivides or combines its outstanding shares of
Class A voting common stock;
10.12.3 of any reclassification of the Class A voting common stock of the
Corporation (other than a subdivision or combination of its outstanding
shares of Class A voting common stock or a stock dividend or stock
distribution thereon), or of any consolidation or merger of the
Corporation into or with another corporation, or of the sale of all or
substantially all of the assets of the Corporation; or
10.12.4 of the involuntary or voluntary dissolution, liquidation or winding-
up of the Corporation;
then the Corporation shall cause to be filed at its principal office or
at the office of the transfer agent of the Series A Preferred Stock, and
shall cause to be mailed to the holders of Series A Preferred Stock at
their last addresses as shown on the records of the Corporation or such
transfer agent, at least ten (10) days prior to the record date specified
in 10.12.4.1 below or twenty (20) days before the date specified in
subparagraph 10.12.4.2 below, a notice stating:
10.12.4.1. the record date of such dividend, distribution, subdivision
or combination, or, if a record is not to be taken, the date as
of which the holders of Class A voting common stock of record to
be entitled to such dividend, distribution, subdivision or
combination are to be determined; or
10.12.4.2. the date on which such reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up is expected
to become effective, and the date as of which it is expected
that holders of Class A voting common stock of record shall be
entitled to exchange their shares of Class A voting common stock
for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution or
winding-up.
10.13 Notices. Any notice required by the provisions of this Section 10 to be
given to the holders of shares of Series A Preferred Stock shall be
deemed given if deposited in the United States mail, postage prepaid, and
addressed to each holder of record at its address appearing on the books
of the Corporation.
11. CONVERSION OF SERIES B PREFERRED STOCK
The holders of Series B Preferred Stock shall have conversion rights as
follows (the "Series B Conversion Rights"):
11.1 Right to Convert. Each share of Series B Preferred Stock shall be
convertible, at the option of the holder thereof, at any time and from
time to time, into such number of fully paid and non-assessable shares of
Class A voting common stock as is determined by dividing $2.25 (the
"Original Series B Issue Price") by the Series B Conversion Price (as
defined below) in effect at the time of conversion. The conversion price
at which shares of Class A voting common stock shall be deliverable upon
conversion of Series B Preferred Stock without payment of additional
consideration by the holder thereof (the "Series B Conversion Price")
shall initially be $2.25 per share. Such initial Series B Conversion
Price, and the rate at which shares of Series B Preferred Stock may be
converted into shares of Class A voting common stock, shall be subject to
adjustment as provided below.
In the event of a liquidation of the Corporation, the Series B Conversion
Rights shall terminate at the close of business on the first full day
preceding the date fixed for the payment of any amounts distributable on
liquidation to the holders of Series B Preferred Stock.
11.2 Fractional Shares. No fractional shares of Class A voting common stock
shall be issued upon conversion of Series B Preferred Stock. In lieu of
any fractional shares to which the holder would otherwise be entitled,
the Corporation shall pay cash equal to such fraction multiplied by the
then effective Series B Conversion Price.
11.3 Mechanics of Conversion
11.3.1 In order for a holder of Series B Preferred Stock to convert shares of
Series B Preferred Stock into shares of Class A voting common stock, such
holder shall surrender the certificate or certificates for such shares of
Series B Preferred Stock, at the office of the transfer agent for the
Series B Preferred Stock (or at the principal office of the Corporation
if the Corporation serves as its own transfer agent), together with
written notice that such holder elects to convert all or any number of
the shares of the Series B Preferred Stock represented by such
certificate or certificates. Such notice shall state such holder's name
or the names of the nominees in which such holder wishes the certificate
or certificates for shares of Class A voting common stock to be issued.
If required by the Corporation, certificates surrendered for conversion
shall be endorsed or accompanied by a written instrument or instruments
of transfer, in form satisfactory to the Corporation, duly executed by
the registered holder or his or its attorney duly authorized in writing.
The date of receipt of such certificates and notice by the transfer agent
(or by the Corporation if the Corporation serves as its own transfer
agent) shall be the conversion date (the "Series B Conversion Date"). The
Corporation shall, as soon as practicable after the Series B Conversion
Date, issue and deliver at such office to such holder of Series B
Preferred Stock, or to his or its nominees, a certificate or certificates
for the number of shares of Class A voting common stock to which such
holder shall be entitled, together with cash in lieu of any fraction of a
share on the shares of Series B Preferred Stock being converted, the
accrued and unpaid dividend on the shares of Series B Preferred Stock
being converted and a share certificate or certificates for the number of
shares of Class B Preferred Stock not converted.
11.3.2 The Corporation shall at all times when the Series B Preferred Stock
shall be outstanding, reserve and keep available out of its authorized
but unissued stock, for the purpose of effecting the conversion of the
Series B Preferred Stock, such number of its duly authorized shares of
Class A voting common stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of Series B Preferred
Stock. Before taking any action which would cause an adjustment reducing
the Series B Conversion Price below the then par value of shares of Class
A voting common stock issuable upon conversion of the Series B Preferred
Stock, the Corporation will take any corporate action which may, in the
opinion of its counsel, be necessary in order that the Corporation may
validly and legally issue fully paid and non-assessable shares of Class A
voting common stock at such adjusted Series B Conversion Price.
11.3.3 On the Series B Conversion Date, all shares of Series B Preferred Stock
which shall have been surrendered for conversion as herein provided shall
no longer be deemed to be outstanding and all rights with respect to such
shares, including the rights, if any, to receive notices and to vote,
shall immediately cease and terminate on the Series B Conversion Date,
except only the right of the holders thereof to receive shares of Class A
voting common stock in exchange therefor.
11.4 Adjustments to Series B Conversion Price for Diluting Issues
11.4.1 Special Definitions. For purposes of this Section 11.4 only, the
following definitions shall apply:
11.4.1.1. "Option" shall mean rights, options or warrants to
subscribe for, purchase or otherwise acquire Class A voting
common stock or Convertible Securities, excluding rights or
options to acquire shares of Class A voting common stock granted
to employees, directors or consultants of the Corporation
pursuant to the Corporation's stock purchase or stock option
plans or other arrangements that are approved by the Board of
Directors;
11.4.1.2. "Original Series B Issue Date" shall mean the date on which
a share of Series B Preferred Stock was first issued or deemed
to have been first issued;
11.4.1.3. "Convertible Securities" shall mean any evidences of
indebtedness, shares or other securities directly or indirectly
convertible into or exchangeable for Class A voting common
stock;
11.4.1.4. "Additional Shares of Class A voting common stock" shall
mean all shares of Class A voting common stock issued (or,
pursuant to Section 11.4.3 below, deemed to be issued) by the
Corporation after the Original Series B Issue Date, other than
shares of Class A voting common stock issued or issuable upon
conversion of shares of Series A Preferred Stock of Series B
Preferred Stock.
11.4.2 No Adjustment of Series B Conversion Price. No adjustment in the number
of shares of Class A voting common stock into which the Series B
Preferred Stock is convertible shall be made, by adjustment to the
applicable Series B Conversion Price hereof:
11.4.2.1. unless the consideration per share (determined pursuant to
Section 11.4.5 for an Additional Share of Class A voting common
stock issued or deemed to be issued by the Corporation) is less
than the applicable Series B Conversion Price in effect on the
date of, and immediately prior to, the issue of such Additional
Shares of Class A voting common stock;
11.4.2.2. in the event that the Corporation issues and sells shares
of Series B Preferred Stock or Class A voting common stock to
the holders of Series B Preferred Stock or their affiliates at a
price equal to at least $2.25 per share (in the event that the
Corporation issues and sells shares of Series B Preferred Stock
or Class A voting common stock to the holders of Series B
Preferred Stock or their affiliates at a price that is less than
$2.25 per share, the adjustment in the number of shares of Class
A voting common stock into which the Series B Preferred Stock is
convertible shall be based upon the difference between $2.25 and
such lesser price per share);
11.4.2.3. in the event that the Corporation, in connection with the
initial public offering, issues to the underwriter or its
designee of the initial public offering, Options or Additional
Shares of Class A voting common stock in lieu of or in addition
to other compensation, including bridge loans with warrants;
provided, that the amount of such compensation is reasonable and
customary in the industry.
11.4.3 Issue of Securities, Deemed Issue of Additional Shares of Class A voting
common stock. If the Corporation at any time or from time to time after
the Original Series B Issue Date shall issue any Options or Convertible
Securities or shall fix a record date for the determination of holders of
any class of securities entitled to receive any such Options or
Convertible Securities, then the maximum number of shares of Class A
voting common stock (as set forth in the instrument relating thereto
without regard to any provision contained therein for a subsequent
adjustment of such number) issuable upon the exercise of such Options or,
in the case of Convertible Securities and Options therefor, the
conversion or exchange of such Convertible Securities, shall be deemed to
be Additional Shares of Class A voting common stock issued as of the time
of such issue or, in case such a record date shall have been fixed, as of
the close of business on such record date, provided that Additional
Shares of Class A voting common stock shall not be deemed to have been
issued unless the consideration per share (determined pursuant to Section
11.4.5 hereof) of such Additional Shares of Class A voting common stock
would be less than the applicable Series B Conversion Price in effect on
the date of and immediately prior to such issue, or such record date, as
the case may be, and provided further that in any such case in which
Additional Shares of Class A voting common stock are deemed to be issued:
11.4.3.1. no further adjustment in the Series B Conversion Price
shall be made upon the subsequent issue of Convertible
Securities or shares of Class A voting common stock upon the
exercise of such Options or conversion or exchange of such
Convertible Securities;
11.4.3.2. if such Options or Convertible Securities by their terms
provide, with the passage of time or otherwise, for any increase
in the consideration payable to the Corporation, or decrease in
the number of shares of Class A voting common stock, issuable
upon the exercise, conversion or exchange thereof, the Series B
Conversion Price computed upon the original issue thereof (or
upon the occurrence of a record date with respect thereto), and
any subsequent adjustment based thereon, shall, upon any such
increase or decrease becoming effective, be recomputed to
reflect such increase or decrease insofar as it affects such
Options or the rights of conversion or exchange under such
Convertible Securities;
11.4.3.3. no readjustment pursuant to Section 11.4.3.2 above shall
have the effect of increasing the Series B Conversion Price to
an amount which exceeds the lower of (1) the Series B Conversion
Price on the original adjustment date, or (2) the Series B
Conversion Price that would have resulted from any issuance of
Additional Shares of Class A voting common stock between the
original adjustment date and such readjustment date;
11.4.3.4. if any Option or conversion privilege represented by a
Convertible Security shall expire or terminate without having
been exercised, the Series B Conversion Price adjusted upon the
issuance of such Option or Convertible Security shall be
readjusted to the Series B Conversion Price that would have been
in effect had the Option or Convertible Security not been
issued; provided, however, that nothing contained in this
Section 11.4.3.4 shall in any way whatsoever have an effect upon
any Class A voting common stock which has been issued upon
conversion of the Series B Preferred Stock;
11.4.3.5. in the event of any change in the number of shares of Class
A voting common stock issuable upon the exercise, conversion or
exchange of any Option or Convertible Security, including, but
not limited to a change resulting from the anti-dilution
provisions thereof, the Series B Conversion Price then in effect
shall forthwith be readjusted to such Series B Conversion Price
as would have been obtained had the adjustment which was made
upon the issuance of such Option or Convertible Security not
exercised or converted prior to such changes, been made upon the
basis of such change, but no further adjustment shall be made
for the actual issuance of Class A voting common stock upon the
exercise or conversion of any such Option or Convertible
Security.
11.4.4 Adjustment of Series B Conversion Price Upon Issuance of Additional
Shares of Class A voting common stock. Subject to the provisions of
Section 11.4.2 above, in the event the Corporation shall at any time
after the Original Series B Issue Date issue at least 1,000 Additional
Shares of Class A voting common stock (including Additional Shares of
Class A voting common stock deemed to be issued pursuant to Section
11.4.3, but excluding shares issued as a dividend or distribution as
provided in Section 11.6 or upon a stock split or combination as provided
in Section 11.5), without consideration or for a consideration per share
less than the Series B Conversion Price in effect on the date of and
immediately prior to such issue, then and in such event, such Series B
Conversion Price shall be reduced, concurrently with such issue to the
price at which such Additional Shares of Class A voting common stock are
issued.
Notwithstanding the foregoing, the applicable Series B Conversion Price
shall not be so reduced at such time if the amount of such reduction
would be an amount less than $.01, but any such amount shall be carried
forward and reduction with respect thereto made at the time of and
together with any subsequent reduction which, together with such amount
and any other amount or amounts so carried forward, shall aggregate $.01
or more.
11.4.5 Determination of Consideration. For purposes of this Section 11.4, the
consideration received by the Corporation for the issue of any Additional
Shares of Class A voting common stock shall be computed as follows:
11.4.5.1. Cash and Property. Such consideration shall:
11.4.5.1.1 insofar as it consists of cash, be computed at
the aggregate of cash received by the Corporation,
excluding amounts paid or payable for accrued interest
or accrued dividends;
11.4.5.1.2 insofar as it consists of property other than
cash, be computed at the fair market value thereof at
the time of such issue, as determined in good faith by
the Board of Directors; and
11.4.5.1.3 in the event Additional Shares of Class A voting
common stock are issued together with other shares or
securities or other assets of the Corporation for
consideration which covers both, be the proportion of
such consideration so received, computed as provided
in subparagraphs 11.4.5.1.1 and 11.4.5.1.2 above, as
determined in good faith by the Board of Directors.
11.4.5.2. Options and Convertible Securities. The consideration per
share received by the Corporation for Additional Shares of Class
A voting common stock deemed to have been issued pursuant to
Section 11.4.3, relating to Options and Convertible Securities,
shall be determined by dividing:
(v) the total amount, if any, received or receivable by the
Corporation as consideration for the issue of such Options
or Convertible Securities, plus the minimum aggregate
amount of additional consideration (as set forth in the
instruments relating thereto, without regard to any
provision contained therein for a subsequent adjustment of
such consideration) payable to the Corporation upon the
exercise of such Options or the conversion or exchange of
such Convertible Securities, or in the case of Options for
Convertible Securities, the exercise of such Options for
Convertible Securities and the conversion or exchange of
such Convertible Securities, by
(w) the maximum number of shares of Class A voting common stock
(as set forth in the instruments relating thereto, without
regard to any provision contained therein for a subsequent
adjustment of such number) issuable upon the exercise of
such Options or the conversion or exchange of such
Convertible Securities.
11.5 Adjustments for Stock Splits and Combinations. If the Corporation shall
at any time, or from time to time after the Original Series B Issue Date,
effect a subdivision of the outstanding Class A voting common stock, the
Series B Conversion Price then in effect immediately before that
subdivision shall be proportionately decreased. Conversely, if the
Corporation shall at any time, or from time to time after the Original
Series B Issue Date, combine the outstanding shares of Class A voting
common stock into a smaller number of shares, the Series B Conversion
Price then in effect immediately before the combination shall be
proportionately increased. Any adjustment under this subsection shall
become effective at the close of business on the date the subdivision or
combination becomes effective.
11.6 Adjustments for Certain Dividends and Distributions. In the event the
Corporation at any time, or from time to time after the Original Series B
Issue Date, shall make or issue, or fix a record date for the
determination of holders of Class A voting common stock or Series A
Preferred Stock entitled to receive, a dividend or other distribution
payable in additional shares of Class A voting common stock, then and in
each such event the Series B Conversion Price then in effect shall be
decreased as of the time of such issuance or, in the event such a record
date shall have been fixed, as of the close of business on such record
date, by multiplying the Series B Conversion Price then in effect by a
fraction:
(x) the numerator of which shall be the total number of shares of
Class A voting common stock issued and outstanding immediately
prior to the time of such issuance or the close of business on
such record date; and
(y) the denominator of which shall be the total number of shares of
Class A voting common stock issued and outstanding immediately
prior to the time of such issuance or the close of business on
such record date plus the number of shares of Class A voting
common stock issuable in payment of such dividend or
distribution;
provided, however, that if such record date shall have been
fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the
Series B Conversion Price shall be recomputed accordingly as
of the close of business on such record date and thereafter
the Series B Conversion Price shall be adjusted pursuant to
this subsection to reflect the actual payment of such dividend
or distribution.
11.7 Adjustments for Other Dividends and Distributions. In the event the
Corporation at any time, or from time to time after the Original Series B
Issue Date, shall make or issue, or fix a record date for the
determination of holders of Class A voting common stock or Series A
Preferred Stock entitled to receive, a dividend or other distribution
payable in securities of the Corporation other than shares of Class A
voting common stock (other than Class A voting common stock dividends
paid under 11.5 hereof) or in cash, then and in each such event provision
shall be made so that the holders of Series B Preferred Stock shall
receive upon conversion thereof in addition to the number of shares of
Class A voting common stock receivable thereupon, the amount of
securities or cash of the Corporation that they would have received had
their Series B Preferred Stock been converted into Class A voting common
stock on the date of such event or had they held shares of Series A
Preferred Stock instead of their shares of Series B Preferred Stock and,
in respect of such securities of the Corporation receivable by them, had
they thereafter, during the period from the date of such event to and
including the Series B Conversion Date, retained such securities
receivable by them as aforesaid during such period giving application to
all adjustments called for during such period under this paragraph with
respect to the rights of the holders of Series B Preferred Stock.
11.8 Adjustment for Reclassification, Exchange or Substitution. If the Class
A voting common stock issuable upon the conversion of the Series B
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 for above, or a
reorganization, merger, consolidation, or sale of assets provided for
below), then and in each such event the holder of each such share of
Series B 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 Class A voting common
stock into which such shares of Series B Preferred Stock might have been
converted immediately prior to such reorganization, reclassification, or
change, all subject to further adjustment as provided herein.
11.9 Adjustment for Merger or Reorganization, Etc. In case of any
consolidation or merger of the Corporation with or into another
corporation or the sale of all or substantially all of the assets of the
Corporation to another corporation each share of Series B Preferred Stock
shall thereafter be convertible into the kind and amount of shares of
stock or other securities or property to which a holder of the number of
shares of Class A voting common stock of the Corporation deliverable upon
conversion of such Series B Preferred Stock would have been entitled upon
such consolidation, merger or sale; and, in such case, appropriate
adjustment (as determined in good faith by the Board of Directors) shall
be made in the application of the provisions set forth in this Section 11
with respect to the rights and interest thereafter of the holders of
Series B Preferred Stock, to the end that the provisions set forth in
this Section 11 (including provisions with respect to changes in and
other adjustments of the Series B Conversion Price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares of
stock or other property thereafter deliverable upon the conversion of the
Series B Preferred Stock.
11.10 No Impairment. The Corporation will not, by amendment of this Second
Restated Certificate of Incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Corporation, but will at all times in good faith assist
in the carrying out of all the provisions of this Section 11 and in the
taking of all such actions as may be necessary or appropriate in order to
protect the Series B Conversion Rights of the holders of Series B
Preferred Stock against impairment.
11.11 Certificate as to Adjustments. Upon the occurrence of each adjustment of
the Series B Conversion Price pursuant to this Section 11, the
Corporation at its expense shall promptly compute such adjustment in
accordance with the terms hereof and a certificate setting forth such
adjustment, and showing in detail the facts upon which such adjustment is
based. The Corporation shall, upon the written request at any time of any
holder of Series B Preferred Stock, furnish or cause to be furnished to
such holder a similar certificate setting forth (i) such adjustments,
(ii) the Series B Conversion Price then in effect; (iii) the number of
shares of Class A voting common stock and the amount, if any, of other
property which then would be received upon the conversion of Series B
Preferred Stock.
11.12 Notice of Record Date. In the event:
11.12.1 that the Corporation declares a dividend (or any other distribution)
on its Class A voting common stock payable in Class A voting common stock
or other securities of the Corporation;
11.12.2 that the Corporation subdivides or combines its outstanding shares of
Class A voting common stock;
11.12.3 of any reclassification of the Class A voting common stock of the
Corporation (other than a subdivision or combination of its outstanding
shares of Class A voting common stock or a stock dividend or stock
distribution thereon), or of any consolidation or merger of the
Corporation into or with another corporation, or of the sale of all or
substantially all of the assets of the Corporation; or
11.12.4 of the involuntary or voluntary dissolution, liquidation or winding-
up of the Corporation;
then the Corporation shall cause to be filed at its principal office or
at the office of the transfer agent of the Series B Preferred Stock, and
shall cause to be mailed to the holders of Series B Preferred Stock at
their last addresses as shown on the records of the Corporation or such
transfer agent, at least ten (10) days prior to the record date specified
in 11.12.4.1 below or twenty (20) days before the date specified in
subparagraph 11.12.4.2 below, a notice stating:
11.12.4.1. the record date of such dividend, distribution, subdivision
or combination, or, if a record is not to be taken, the date as
of which the holders of Class A voting common stock of record to
be entitled to such dividend, distribution, subdivision or
combination are to be determined; or
11.12.4.2. the date on which such reclassification, consolidation,
merger, sale, dissolution, liquidation or winding-up is expected
to become effective, and the date as of which it is expected
that holders of Class A voting common stock of record shall be
entitled to exchange their shares of Class A voting common stock
for securities or other property deliverable upon such
reclassification, consolidation, merger, sale, dissolution or
winding-up.
11.13 Redemption by the Corporation
11.13.1 Subject to the provisions of the Nevada Revised Statutes, the issued
and outstanding shares of Series B Preferred Stock shall be redeemable,
at their redemption price, at the option of the Corporation, (in whole
and not in part) at the earliest of June 30, 2002 or the date on which
the Corporation shall have delivered at least 7,000 juke-boxes to clients
or operators having purchased or leased such juke-boxes;
11.13.2 The Corporation shall, at least thirty (30) days before the date
fixed for redemption, give to each holder of shares of Series B Preferred
Stock, a written notice of the intention of the Corporation to redeem
such shares. Such notice shall be sent to each such holder at his
address as it appears in the books of the Corporation, or at the last
known address of the said holder. However, during said thirty (30) day
period, a holder of shares of Series B Preferred Stock may elect to
convert said shares into shares of Class A voting common stock as per the
terms of this Section 11 at which time, the redemption right of the
Corporation shall become null and void;
11.14 Obligation to redeem
11.14.1 Subject to the provisions of the Nevada Revised Statutes, the
Corporation must redeem, at their redemption price, the shares of Series
B Preferred Stock of a holder which requests the Corporation to do so in
writing, in the proportion set forth by said holder. However, said
redemption right may not be exercised prior to January 1, 2004;
11.15 Redemption price
11.15.1 The redemption price of each share of Series B Preferred Stock,
whether it is redeemed at the option of the Corporation or of the holder
thereof, shall be equal to its subscription price plus a premium which
will cause each holder thereof to earn the equivalent of a 20% yearly
return, including all dividends, from the date at which such share shall
have been issued;
11.16 Notices. Any notice required by the provisions of this Section 11 to be
given to the holders of shares of Series B Preferred Stock shall be
deemed given if deposited in the United States mail, postage prepaid, and
addressed to each holder of record at its address appearing on the books
of the Corporation.
12. RESTRICTIONS AND LIMITATIONS
12.1 The Corporation shall not, without the vote or written consent by the
holders of more than 50% of the then outstanding shares of the Series A
Preferred Stock and of the Series B Preferred Stock ("Preferred Stock")
voting together as a single class:
12.1.1 amend, repeal or waive any provision of, or add any provision to, the
Corporation's Certificate of Incorporation or Bylaws if such action would
alter or change the preferences, rights, privileges or powers of, or the
restrictions provided for the benefit of, the Preferred Stock;
12.1.2 authorize or issue, or obligate itself to issue, any other equity
security senior to or on a parity with the Preferred Stock as to dividend
or redemption rights, liquidation preferences, conversion rights, voting
rights or otherwise, or create any obligation or security convertible
into or exchangeable for, or having any option rights to purchase, any
such equity security which is senior to or on a parity with the Preferred
Stock;
12.1.3 effect any sale, lease, assignment, transfer or other conveyance of all
or substantially all of the assets of the Corporation or any of its
subsidiaries, or any consolidation or merger involving the Corporation or
any of its subsidiaries, or any reclassification or other change of any
stock, or any recapitalization of the Corporation;
12.1.4 increase the authorized number of shares of Preferred Stock; or
12.1.5 do any act or thing which would result in taxation of the holders of
shares of the Preferred Stock under Section 305 of the Internal Revenue
Code of 1954, as amended (or any comparable provision of the Internal
Revenue Code as hereafter from time to time amended).
13. RESIDUAL RIGHTS
All rights accruing to the outstanding shares of the Corporation not
otherwise expressly provided for in this Restated Certificate of
Incorporation shall be vested in the Class A voting common stock.
14. DIRECTORS
14.1 The governing board of this Corporation shall be called directors, and
number of directors may from time to time be specified by the By-laws of
the Corporation at not less than one, nor more than fifteen. When the
By-laws do not specify the number of directors, the number of directors
shall be three (3), or equal to the number of shareholders should there
be less than three initial shareholders. The names of the directors are:
NAME ADDRESS
GUY NATHAN 1, rue Jeanne D'Arc
91330 YERRES
FRANCE
TONY MASTRONARDI 4973 Felix Mclernan
PIERREFONDS, QUEBEC
CANADA H8Y 3L2
TONINO LATTANZI 12 rue Dubois
CLAMART 92140
PARIS, FRANCE
SOPHIE FOREST 175 Bedbrook
MONTREAL WEST, QUEBEC
CANADA H4X 1R7
CAROLINE SINGLETON 4551, Madison
MONTREAL, QUEBEC
CANADA H4B 2V5
JACQUES BOURQUE 1707 Aird Boulevard
TOWN OF MOUNT ROYAL
QUEBEC, CANADA
H3P 2V1
which directors shall hold office until the next annual meeting of the
shareholders of the Corporation and until their successors have been duly
elected and qualified. Directors need not be residents of the State of
Nevada or shareholders of the Corporation.
15. REGISTERED AGENT
15.1 The designated resident agent and its street address in Nevada, where
process may be served is: The Corporation Trust Company of Nevada, One
East First Street, Suite 1411, Reno, Nevada 89501.
That Mr. Tony Mastronardi is the president of TouchTunes Music
Corporation and that Mr. Jacques Bourque is the assistant secretary of
said Corporation; that they have been authorized to execute the foregoing
certificate by resolution of the board of directors, adopted at a meeting
of the directors duly called; that such meeting was held on the
April 19th, 2000; and that the foregoing certificate sets forth the text
of the Articles of Incorporation as amended to the date of the
certificate.
Dated: May 2, 2000.
TOUCHTUNES MUSIC
/s/ TONY MASTRONARDI
----------------------
By: Tony Mastronardi
/s/ JACQUES BOURQUE
----------------------
and: Jacques Bourque, Assistant-
Secretary
