-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, C3YAf0ZcQFfoZcVRZ9gKHGaq7BVoUZpQkH0rkT1AHcwIiw0XJQJ3J0FaDHfIcouf 8NXVE7+zI7b/Pr9lY0pc1w== 0000950148-99-002261.txt : 19991021 0000950148-99-002261.hdr.sgml : 19991021 ACCESSION NUMBER: 0000950148-99-002261 CONFORMED SUBMISSION TYPE: 8-A12G PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19991020 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FTM MEDIA INC CENTRAL INDEX KEY: 0001004991 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 840928022 STATE OF INCORPORATION: CO FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 8-A12G SEC ACT: SEC FILE NUMBER: 000-27745 FILM NUMBER: 99731358 BUSINESS ADDRESS: STREET 1: 6991 EAST CAMELBACK ROAD STREET 2: #D103 CITY: SCOTTSDALE, STATE: AZ ZIP: 85251 BUSINESS PHONE: 4804250099 MAIL ADDRESS: STREET 1: 11 SUNDIAL CIRCLE #17 STREET 2: P O BOX 3463 CITY: CAREFREE STATE: AZ ZIP: 85377 FORMER COMPANY: FORMER CONFORMED NAME: REDWOOD BROADCASTING INC DATE OF NAME CHANGE: 19961003 FORMER COMPANY: FORMER CONFORMED NAME: INTELLIGENT FINANCIAL HOLDING CORP DATE OF NAME CHANGE: 19951215 8-A12G 1 FORM 8-A 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 -------------- 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. - -------------------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) COLORADO 84-1295270 - ------------------------------------------------------- -------------------- (State of Incorporation or Organization) (I.R.S. Employer Identification no.) 6991 EAST CAMELBACK ROAD SUITE D-103 85231 SCOTTSDALE, ARIZONA - ------------------------------------------------------- -------------------- (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 --------------------------- (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 - -------------------------------- ------------------------------------------ - -------------------------------- ------------------------------------------ Securities to be registered pursuant to Section 12(g) of the Act: COMMON STOCK, PAR VALUE $0.04 - -------------------------------------------------------------------------------- (Title of Class) 2 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. 3 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.
EXHIBIT NO. DESCRIPTION ----------- ----------- 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.)
-3- 4 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 ------------------------------------------- Scott Manson Chief Financial Officer and General Counsel -4- 5 EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION ----------- ----------- 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.)
EX-3.1 2 EXHIBIT 3.1 1 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 2 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 -2- 3 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 -3- 4 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 -4- 5 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 -5- 6 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. -6- EX-3.2 3 EXHIBIT 3.2 1 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. 2 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 -2- 3 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. -3- 4 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. -4- 5 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 -5- 6 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 -6- 7 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. -7- 8 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 -8- 9 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 -9- 10 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. -10- 11 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. -11- 12 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; -12- 13 (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: -13- 14 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, -14- 15 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. -15- 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. -16- EX-4.1 4 EXHIBIT 4.1 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 - ------------------------------------------------------------------------------- EX-4.2 5 EXHIBIT 4.2 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. 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 -2- 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 -3- 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 -4- 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 -5- 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 -6- EX-4.3 6 EXHIBIT 4.3 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 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 -2- 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 -3- 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. -4- 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 -5- 6 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 -6- 7 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 ------------------------------------ Ron Conquest President -7- -----END PRIVACY-ENHANCED MESSAGE-----