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STOCK PURCHASE AGREEMENT
BETWEEN
VIDEO JUKEBOX NETWORK, INC.,
AS SELLER,
AND
EMAP PLC.
AS PURCHASER
OCTOBER 30, 1996
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") dated October 30, 1996
between VIDEO JUKEBOX NETWORK, INC., a Florida corporation ("VJN"), and EMAP
PLC., an English company ("EMAP").
RECITALS:
A. VJN wishes to amend its Articles of Incorporation to authorize
the creation of 6% convertible redeemable preferred shares (the "Shares"), par
value $.15 per Share, the terms of which are as set forth in Exhibit "A"
hereto; and
B. VJN wishes to issue 1,666,667 Shares to EMAP, and EMAP wishes
to purchase such Shares from VJN, in exchange for US$2,500,000.50 (the
"Purchase Price");
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the
following meanings:
1.1 "Affiliate" means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person. "Control" (including the terms "controlling," "controlled by" and
"under common control with"), with respect to the relationship between or among
two or more Persons, means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the affairs or
management of a Person, whether through the ownership of voting securities, as
trustee or executor, by contract or otherwise, including, without limitation,
the ownership, directly or indirectly, of securities having the power to elect
a majority of the board of directors or similar body governing the affairs of
such Person.
1.2 "Bankruptcy" means: (a) an adjudication of bankruptcy under
the U.S. Bankruptcy Reform Act of 1978, as amended, or any successor statute;
(b) the specified Person stops payment of, is deemed unable (under Section 123
of the Insolvency Act of 1986 of the U.K. (the "Insolvency Act")) or otherwise
admits inability to pay, its debts or becomes or is deemed to be insolvent; (c)
the presentation of a petition for or the making of a winding up or
administration order in respect of the specified Person; (d) an assignment for
the benefit of creditors; (e) the specified Person either does, resolves to do
or commences negotiations with a view to doing any of the following: (i) makes
a general or special arrangement or composition (whether voluntary or
compulsory) with its creditors or any class of creditors, (ii) declares or
agrees to a moratorium, (iii) issues a notice convening a meeting to resolve to
do any of the foregoing (other than for the purpose of a solvent amalgamation
or reconstruction), or (iv) makes a proposal for a voluntary arrangement under
Section 1 of the Insolvency Act to be made in respect of the specified Person;
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(f) the filing of a voluntary petition in bankruptcy, winding-up or
reorganization or the passing of a resolution for voluntary liquidation,
reconstruction or winding up (other than for the purpose of a solvent
amalgamation or reconstruction); or (g) the failure to vacate the appointment
of a receiver, trustee, provisional liquidator or administrative receiver for
any part or all of the assets or property of a party within 60 days from the
date of such appointment.
1.3 "Board" means the Board of Directors of VJN.
1.4 "Business" means the television, cable and similar programming
and broadcasting services (interactive or non-interactive), marketing,
advertising, sales, concert and related music promotions, merchandising and
home shopping projects and all other promotions and ventures in which VJN is
engaged.
1.5 "Business Day" means any day that is not a Saturday or a
Sunday and on which banks are open for the conduct of normal banking business
in the city of Miami, Florida.
1.6 "Confidential Information"of any party means all data,
reports, interpretations, forecasts and records containing or otherwise
reflecting information concerning the transactions contemplated hereby which is
of a confidential nature, not available to the general public and which such
party provides or has previously provided to the other party at any time
pursuant to or in connection with this Agreement. "Confidential Information"
includes any information obtained by a meeting with personnel or representative
of a party or its subsidiaries, together with analyses, compilations, studies
or other documents prepared by the party obtaining the information, which
contain the Confidential Information. However, "Confidential Information" does
not include any information which: (a) at the time of disclosure or thereafter
is available to the public (other than as a result of a disclosure by a party
or its Representative in violation of the terms of this Agreement); or (b) was
or becomes available to a party or its Representatives (collectively, the
"Informed Party") from a source other than the other party, unless the Informed
Party knows that the source is bound by the terms of a confidentiality
agreement with the other party.
1.7 "Conversion Shares" means the shares of VJN's common stock,
par value $0.001 per share, into which the Shares are convertible.
1.8 "Encumbrance" means any security interest, pledge, mortgage,
lien (including, without limitation, environmental and tax liens), charge,
encumbrance, adverse claim, option, preferential arrangement or restriction of
any kind, including, without limitation, any restriction on the use, voting,
transfer, receipt of income or other exercise of any attributes of ownership.
1.9 "Escrow Agreement" shall have the meaning set forth in Section
2.3 hereof.
1.10 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
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1.11 "Governmental Authority" means any federal, state or local, or
foreign government, governmental, regulatory or administrative authority (or
subdivision thereof) and any agency or commission or any court, tribunal or
judicial or arbitral body that has jurisdiction over EMAP, the Business, VJN or
their respective assets.
1.12 "Governmental Order" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
1.13 "Intellectual Property" means: (a) inventions, whether or not
patentable, whether or not reduced to practice, and whether or not yet made the
subject of a pending patent application or applications; (b) ideas and
conceptions of potentially patentable subject matter, including, without
limitation, any patent disclosures, whether or not reduced to practice and
whether or not yet made the subject of a pending patent application or
applications; (c) national and multinational statutory invention registrations,
patents, patent registrations and patent applications (including all reissues,
divisions, continuations, continuations-in-part, extensions and reexaminations)
and all rights therein provided by international treaties or conventions and
all improvements to the inventions disclosed in each such registration, patent
or application; (d) trademarks, service marks, trade dress, logos, trade names
and corporate and partnership names, whether or not registered, including all
common law rights, and registrations and applications for registration thereof;
(e) copyrights (registered or otherwise) and registrations and applications for
registration thereof, and all rights therein provided by international treaties
or conventions; (f) moral rights (including, without limitation, rights of
paternity and integrity), and waivers of such rights by others; (g) trade
secrets and confidential, technical and business information; (h) copies and
tangible embodiments of all the foregoing, in whatever form or medium; (i) all
rights to obtain and rights to apply for patents, and to register trademarks
and copyrights; (j) all rights to ▇▇▇ or recover and retain damages and costs
and attorneys' fees for present and past infringement of any of the foregoing;
and (k) all goodwill associated with the foregoing.
1.14 "Law" means any federal, state, local or foreign statute, law,
ordinance, regulation, rule, code, order, other requirement or rule of law
issued by any Governmental Authority.
1.15 "Material Adverse Effect" means any circumstance, change in,
or effect on the business of any party hereto that could reasonably be expected
to have a materially adverse effect on the business, operations, assets or
liabilities, results of operations or the financial condition of such party.
1.16 "Person" means any individual, partnership, firm, corporation,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity, as well as any syndicate or group that would be
deemed to be a person under Section 13(d)(3) of the Securities Exchange Act of
1934, as amended.
1.17 "Purchase Price" shall have the meaning set forth in Recital
B hereof.
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1.18 "Representative" means, with respect to a party hereto, such
party's directors, officers, employees or attorneys, accountants and other
agents and representatives who have need to know Confidential Information of
the other party hereto, in order to perform their duties or services.
1.19 "Rights" means any options, warrants or other agreements for
the purchase of Voting Stock.
1.20 "SEC" means the United States Securities and Exchange
Commission.
1.21 "SEC Reports" means the following forms which were filed with
the SEC by VJN: (a) VJN's Form 10-KSB for the fiscal year ended December 31,
1995; (b) VJN's Form 10-QSBs for the quarters ended March 31, 1996 and June 30,
1996; and (c) VJN's Proxy Statement, dated August 30, 1996, regarding VJN's
1996 annual meeting of stockholders.
1.22 "Securities Act" means the Securities Act of 1933, as amended.
1.23 "Shares" shall have the meaning set forth in Recital A hereof.
1.24 "Tax" or "Taxes" means any and all taxes, stamp duties, fees,
levies, duties, tariffs, imposts, and other charges of any kind (together with
any and all interest, penalties, additions to tax and additional amounts
imposed with respect thereto) imposed by any Governmental Authority or taxing
authority, including, without limitation: taxes or other charges on or with
respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation, or net worth; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer,
value added, or gains taxes; license, registration and documentation fees; and
customs duties, tariffs, and similar charges.
1.25 "VJNIL" means Video Jukebox Network International Limited, an
English company.
1.26 "Voting Stock" means any class of capital stock of VJN with
general voting rights for the election of directors.
ARTICLE II
PURCHASE AND SALE
2.1 Closing. Except as otherwise agreed upon in writing by VJN
and EMAP, the closing of the purchase and sale of the Shares (the "Closing")
shall take place at the offices of VJN as soon as reasonably practicable after
the end of the Escrow Period, as such term is defined in the Escrow Agreement
(the "Closing Date").
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2.2 Purchase and Sale. Subject to fulfillment of the conditions
precedent, and based upon the representations and warranties, set forth herein,
at the Closing EMAP shall purchase from VJN, and VJN shall sell and issue to
EMAP, the Shares free and clear of any and all Encumbrances other than those
restrictions imposed by this Agreement or by applicable United States federal
and state securities laws. In consideration of and in full payment for the
Shares, EMAP, at Closing shall pay the Purchase Price to VJN, by wire transfer
of immediately available funds.
2.3 Escrow of Purchase Price. Following the execution of this
Agreement by the parties hereto and as promptly as practicable after the
satisfaction of the conditions specified in Sections 6.2 (c) and (d) hereof,
EMAP shall deposit the full Purchase Price by wire transfer of immediately
available funds into an escrow account controlled by ▇▇▇▇▇▇ ▇▇▇▇ (the Escrow
Agent"), pursuant to an Escrow Agreement (the "Escrow Agreement") substantially
in the form of Exhibit "B" attached hereto, which shall be duly and validly
executed by VJN, EMAP and the Escrow Agent on or prior to the date of this
Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
OF VJN
As of the date hereof and as of the Closing Date, VJN represents and
warrants to EMAP as follows:
3.1 Organization, Qualification, Etc. of VJN. VJN is a duly
organized and validly existing corporation under the Laws of the State of
Florida and has all necessary corporate power and authority to own, operate or
lease the properties and assets now owned, operated or leased by it and to
carry on its business as it has been, is currently and is anticipated to be
conducted. VJN is duly licensed or qualified to do business and is in good
standing in each jurisdiction in which the properties owned or leased by it or
the operation of its business makes such licensing or qualification necessary,
except where the failure to be so licensed, qualified or in good standing does
not have a Material Adverse Effect. All material corporate actions taken by
VJN have been duly authorized and VJN has not taken any action that in any
respect conflicts with, constitutes a default under or results in a violation
of any provision of its Articles of Incorporation or Bylaws (collectively, the
"Articles of Incorporation").
3.2 Authority of VJN. Except for the stockholder approval
referred to in Section 6.3(b) hereof, VJN has all necessary power and authority
to enter into this Agreement, to carry out its obligations hereunder and to
consummate the transactions contemplated hereby. This Agreement has been duly
executed and delivered by VJN and (assuming due authorization, execution and
delivery by EMAP) constitutes the legal, valid and binding obligation of VJN,
enforceable against VJN in accordance with its terms, except as such
enforcement may be subject to (a) Bankruptcy or other similar laws now or
hereafter in effect relating to creditors' rights generally and (b) general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law).
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3.3 No Conflict. Except as set forth on Schedule 3.3, the
execution, delivery and performance of this Agreement by VJN and the
consummation of the transactions contemplated hereby do not and will not: (a)
conflict with or violate any Law or Governmental Order applicable to VJN, which
violation or conflict would, individually or in the aggregate, have a Material
Adverse Effect on VJN, the Business or on the transactions contemplated hereby;
or (b) conflict with, result in any breach of, constitute a default (or an
event which with the giving of notice or lapse of time, or both, would become a
default) under, require any consent under, or give to others any rights of
termination, amendment, acceleration, suspension, revocation or cancellation
of, or result in the creation of any Encumbrance on any of the assets or
properties of VJN or the Business pursuant to, any note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license, permit, franchise or
other instrument, agreement or arrangement to which VJN is a party or by which
any of such assets or properties is bound or affected, which conflict or
violation would, individually or in the aggregate, have a Material Adverse
Effect on the ability of VJN to consummate the transactions contemplated hereby
or on the Business.
3.4 The Shares. All of the Shares delivered to EMAP are duly
authorized and validly issued, fully paid, non-assessable, with all documentary
stamp taxes of any kind prepaid and free and clear of all Encumbrances, other
than those restrictions imposed by this Agreement or by applicable United
States federal and state securities laws. All of the Conversion Shares are
duly authorized and, when issued, shall be fully paid, non-assessable, with all
documentary stamp taxes of any kind prepaid and free and clear of all
Encumbrances, other than those restrictions imposed by this Agreement or by
applicable United States federal and state securities laws.
3.5 Registration of Shares. Assuming that EMAP's representations
and warranties contained herein are true and correct, the offering, issuance,
sale and delivery of the Shares and the Conversion Shares are and shall be
exempt from the registration requirements of the Securities Act.
3.6 Consents and Approvals. Except as set forth on Schedule 3.6,
the execution, delivery and performance of this Agreement by VJN do not and
will not require any consent, approval, authorization or other order of, action
by, filing with or notification to any Governmental Authority or any third
party.
3.7 Securities and Exchange Commission Filings.
(a) The SEC Reports (i) were prepared in accordance with
the requirements of the Securities Act and the Exchange Act, as the case may
be, and the rules and regulations thereunder and (ii) did not at the time they
were filed, and presently do not, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements made therein, in the light of the
circumstances under which they were made, not misleading.
(b) Each of the financial statements (including, in each
case, any notes thereto) contained in the SEC Reports was prepared in
accordance with generally accepted accounting
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principles applied on a consistent basis throughout the periods indicated
(except as may be indicated in the notes thereto) and each fairly presented the
consolidated financial position, results of operations and cash flows of VJN
and the consolidated VJN subsidiaries, as the case may be, as at the respective
dates thereof and for the respective periods indicated therein (subject, in the
case of unaudited statements, to normal and recurring year-end adjustments
which were not and are not expected, individually or in the aggregate, to be
material in amount).
(c) Except as and to the extent set forth in this
Agreement and the SEC Reports, VJN and VJN's subsidiaries do not have any
liability or obligation of any nature (whether accrued, absolute, contingent or
otherwise) other than liabilities and obligations arising in the ordinary
course of business or which would not, individually or in the aggregate, have a
Material Adverse Effect.
3.8 Litigation. No claims or proceedings are pending or, to the
knowledge of VJN, threatened by or against VJN which, if adversely determined,
could reasonably be expected to have a Material Adverse Effect or could
reasonably be expected to affect the legality, validity or enforceability of
this Agreement or the consummation of the transactions contemplated hereby.
3.9 Property Title. VJN has good and marketable title to, and
valid and enforceable leasehold estates in, all items of real and personal
property, tangible or intangible, that are material to the conduct of the
Business. All such properties are free and clear of all Encumbrances, other
than those Encumbrances that do not have a Material Adverse Effect.
3.10 Taxes.
(a) All returns and reports (the "Returns") in respect of
all Taxes required to be filed with respect to VJN or the Business have been
timely filed and all Taxes required to be shown on the Returns have been timely
paid. All Returns are true, correct and complete and no adjustment relating to
the Returns has been proposed by any tax authority and no basis exists for any
such adjustment. There are no pending or threatened actions or proceedings for
the assessment or collection of Taxes against VJN. All Taxes required to be
withheld, collected or deposited by or with respect to VJN or the Business have
been timely withheld, collected or deposited, as the case may be, and, to the
extent required, have been paid to the relevant taxing authority.
(b) There are no: (i) outstanding waivers or agreements
extending the statute of limitations for any period with respect to any Tax to
which VJN may be subject; and (ii) no proposed reassessments of any property
owned by VJN or other proposals that could increase the amount of any Tax to
which VJN would be subject. VJN has not granted a power of attorney that is
currently in force, with respect to any matter relating to Taxes that could
affect VJN.
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3.11 Intellectual Property.
(a) VJN has full ownership of all of the Intellectual
Property used in the Business, or the right to use all such rights, in each
case except to the extent heretofore disclosed in writing to EMAP, and VJN has
no knowledge that the conduct of the Business as now operated, conflicts with,
misappropriates or infringes, or has been alleged to infringe, any Intellectual
Property rights or franchises of any person (including patents, trade secrets
or other proprietary rights of any third party).
(b) To VJN's knowledge, none of the Intellectual Property
owned by VJN is being infringed by any Person.
3.12 Compliance with Laws. Except for such noncompliance as would
not have a Material Adverse Effect, VJN has conducted and continues to conduct
its business in all material respects in accordance with all Laws and all
Governmental Orders entered by or with any Governmental Authorities, and VJN is
in compliance with all such Laws or Governmental Orders.
3.13 Conduct of Business in the Ordinary Course. Since June 30,
1996, VJN has conducted the Business only in the ordinary course and consistent
with past practice.
3.14 Approval of Stockholders. As soon as reasonably practicable
after the signing hereof, VJN shall attempt to obtain the approval by the
holders of a majority of VJN's common stock, par value $0.001 per share, of
the amendment to the Articles of Incorporation of VJN to permit the issuance of
the Shares.
3.15 Appointment to Board of Directors. At the Closing, the Board
shall appoint a designated person (the "Designated Person") to the Board. VJN
makes no warranty or representation that VJN's stockholders will reelect the
Designated Person to the Board at the next annual meeting of VJN's
stockholders.
3.16 Full Disclosure. No representation or warranty with respect
to VJN contained in this Agreement contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the statements
contained herein or therein not misleading.
3.17 Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of VJN, except an aggregate of $125,000 payable by VJN to
Communications Equity Associates, Inc., which $125,000 shall be paid at the
Closing solely by VJN.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF EMAP
As of the date hereof and as of the Closing Date, EMAP represents and
warrants to VJN as follows:
4.1 Organization, Qualification, Etc. of EMAP. EMAP is a duly
organized and validly existing company under the Laws of England and Wales and
has all necessary corporate power and authority to own, operate or lease the
properties and assets now owned, operated or leased by it and to carry on its
business as it has been, is currently and is anticipated to be conducted. EMAP
is duly licensed or qualified to do business and is in good standing in each
jurisdiction in which the properties owned or leased by it or the operation of
its business makes such licensing or qualification necessary, except where the
failure to be so licensed, qualified or in good standing does not have, or
could not reasonably be expected to have, a Material Adverse Effect.
4.2 Authority of EMAP. EMAP has all necessary corporate power and
authority to enter into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by EMAP, the performance by EMAP of its obligations
hereunder and the consummation by EMAP of the transactions contemplated hereby
have been duly authorized by all requisite corporate action on the part of
EMAP. This Agreement has been duly executed and delivered by EMAP and
(assuming due authorization, execution and delivery by VJN) constitutes the
legal, valid and binding obligation of EMAP, enforceable against EMAP in
accordance with its terms, except as such enforcement may be subject to: (a)
Bankruptcy or other similar laws now or hereafter in effect relating to
creditors' rights generally; and (b) general principles of equity (regardless
of whether such enforcement is considered in a proceeding in equity or at law).
4.3 No Conflict. Assuming the making and obtaining of all
filings, notifications, consents, approvals, authorizations and other actions
referred to herein, the execution, delivery and performance of this Agreement
by EMAP and the consummation of the transactions contemplated hereby do not and
will not: (a) violate, conflict with or result in the breach of any provision
of EMAP's Memorandum or Articles of Association; or (b) conflict with or
violate any Law or Governmental Order applicable to EMAP, which violation or
conflict could, individually or in the aggregate, have a Material Adverse
Effect on EMAP.
4.4 Consents and Approvals. The execution, delivery and
performance of this Agreement by EMAP do not and will not require any consent,
approval, authorization or other order of, action by, filing with, or
notification to, any Governmental Authority or any third party.
4.5 Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of EMAP.
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4.6 Investor Status. EMAP is a sophisticated investor and has
such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of an investment in VJN represented
by the Shares and the Conversion Shares. EMAP is an "accredited investor" as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
4.7 Investment Intent and Restriction on Transfer. EMAP is
acquiring the Shares and when and if issued, the Conversion Shares for its own
account and for investment and not with a view towards, or for sale in
connection with, any distribution thereof, nor with any present intention of
distributing or selling the Shares or, if applicable, the Conversion Shares.
However, VJN understands that the disposition of any of EMAP's property is
within its discretion.
4.8 Due Diligence. EMAP has received and examined the SEC Reports.
4.9 Access to Information. EMAP will, prior to Closing, be
afforded an opportunity to discuss the Business and VJN's management and
financial affairs with VJN's management and will have an opportunity to ask
questions of and receive answers from VJN's officers relating to the subject
matter of this Agreement.
4.12 Non U.S. Person. EMAP is not a U.S Person ("U.S. Person"), as
such term is defined in Rule 902(o) under Regulation S promulgated under the
Securities Act.
4.13 Offshore Transaction. No offer of the Shares was made to EMAP
in the United States. At the time the offer for the Shares was made, EMAP was
located outside the United States.
4.14 Restrictions on Transfer. EMAP understands that neither the
Shares nor the Conversion Shares have been registered under the Securities Act.
During the period commencing on the Closing Date and terminating on the day 40
days after the Closing Date (the "Restricted Period"), EMAP shall not offer or
sell the Shares or the Conversion Shares in the United States, to a U.S. Person
or for the account or benefit of a U.S. Person. After the expiration of the
Restricted Period, EMAP may offer, sell, pledge or otherwise transfer the
Shares and the Conversion Shares only if registered under the Securities Act or
if, in the opinion of counsel reasonably satisfactory to the Company, an
exemption from registration is available.
4.15 No Scheme to Avoid Registration. The transactions
contemplated by this Agreement: (i) have not been pre-arranged with a purchaser
that is located in the United States or is a U.S. Person; and (ii) are not part
of a plan or scheme to evade the registration provisions of the Securities Act.
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ARTICLE V
LEGEND ON SHARES; REGISTRATION AND PREEMPTIVE RIGHTS
5.1 Legend on Shares. EMAP understands that a legend, in
substantially the following form, will be placed on the certificate
representing the Shares and the Conversion Shares:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). PRIOR TO THE
EXPIRATION OF THE FORTY (40) DAY RESTRICTED PERIOD (AS DEFINED BY RULE
902(m) ADOPTED UNDER REGULATION S OF THE ACT), THESE SECURITIES CANNOT
BE OFFERED OR SOLD IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED
BY RULE 902(o) ADOPTED UNDER REGULATION S OF THE ACT), UNLESS THE
SECURITIES ARE REGISTERED UNDER THE ACT, OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT IS AVAILABLE. PRIOR TO THE
EXPIRATION OF THE FORTY (40) DAY RESTRICTED PERIOD, THE PURCHASER OF
THE SECURITIES (WHO IS NOT A DISTRIBUTOR, DEALER, OR SUBUNDERWRITER)
MAY RESELL THE SHARES ONLY IN A TRANSACTION EFFECTED OUTSIDE OF THE
UNITED STATES AND PROVIDED THE PURCHASER DOES NOT SOLICIT PURCHASERS
IN THE UNITED STATES OR OTHERWISE ENGAGE IN SELLING EFFORTS IN THE
UNITED STATES. AFTER THE FORTY (40) DAY RESTRICTED PERIOD EXPIRES,
THE SECURITIES CAN BE SOLD IN THE UNITED STATES ONLY IF REGISTERED OR
IF, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY,
AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
5.2 Registration Rights. EMAP shall have demand registration
rights regarding the Conversion Shares under the terms of that certain
Registration Rights Agreement (the "Registration Agreement") between EMAP and
VJN of even date herewith, a copy of which is attached hereto as Exhibit 5.2.
5.3 Preemptive Rights.
(a) Grant of Right. If, at any time after the Closing
and prior to the fifth anniversary of the issuance of the Shares, VJN proposes
to and does issue (the "Third Party Issuance") additional shares of Voting
Stock or any Rights to acquire Voting Stock, to a Person, other than EMAP, its
Affiliates or any director, officer, employee or consultant of VJN, then EMAP
shall have the right (the "Preemptive Right") to purchase shares of Voting
Stock or Rights, as the case may be, so that, immediately after such purchase
and the Third Party Issuance, EMAP shall own the same percentage of shares of
VJN's issued and outstanding Voting Stock (or the right to own such
percentage), as it had owned prior to the proposed Third Party Issuance.
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(b) Procedure. VJN shall give EMAP ten (10) Business
Day's prior written notice of any proposed issuance of Voting Stock or Rights
which would entitle EMAP to exercise the Preemptive Right. Upon receipt of
such notice, EMAP shall have five (5) Business Days (the "Exercise Period") to
exercise the Preemptive Right. If by the expiration of the Exercise Period,
EMAP notifies VJN that it does not wish to exercise the Preemptive Right or has
failed to give a notice to VJN, then the Company may continue with the proposed
Third Party Issuance. If EMAP chooses to exercise the Preemptive Right during
the Exercise Period, VJN shall take all actions reasonably necessary to issue
such Voting Shares or Rights to EMAP in accordance with this Section.
(c) Exercise Price. In connection with the exercise of
the Preemptive Right: (i) the exercise price shall be the same price at which
the shares of Voting Stock or Rights are being issued pursuant to the Third
Party Issuance; and (ii) the terms and conditions of the purchase shall be, as
nearly as reasonably practicable, the same as the terms and conditions of the
third party issuance. If all or part of the Third Party Issuance offering
price consists of any consideration other than cash, then the per share, or per
Right, price at which EMAP shall be offered the Preemptive Right shall be the
amount determined by dividing the total number of Voting Stock or Rights which
are the subject of the Third Party Issuance into the sum of (i) the aggregate
amount of cash, if any, proposed to be paid for such securities; and (ii) the
aggregate fair market value of the non-cash consideration proposed to be paid
for such securities (taking into account, in determining such fair market
value, any liabilities associated with such non-cash consideration).
(d) Exceptions.
(i) Debt/Equity Financing. If the Third Party
Issuance involves the borrowing of money from the proposed purchaser, then EMAP
shall not have the Preemptive Right with regard to such Third Party Issuance
unless EMAP agrees to participate in such debt financing, on a pro rata basis
and pursuant to the same terms and conditions.
(ii) Existing Rights. EMAP shall not have a
Preemptive Right to purchase Voting Stock which is to be issued to satisfy
Rights which were previously issued and as to which Rights, EMAP had the right
and opportunity to exercise a Preemptive Right.
(iii) Threshold Ownership. The Preemptive Right
granted hereunder shall terminate if EMAP ceases to own less than 1% of all
issued and outstanding Voting Stock, after giving effect to all exercised
Preemptive Rights.
ARTICLE VI
DELIVERIES AND CONDITIONS
6.1 Deliveries by EMAP. On or prior to the Closing, EMAP shall
execute (where necessary) and deliver or cause to be delivered to VJN the
following documents, certificates and agreements:
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(a) Purchase Price. The Escrow Agent shall pay to VJN
the Purchase Price and all accrued interest thereon by wire transfer of
immediately available funds to a bank account specified in writing by VJN; and
(b) Registration Agreement. The Registration Agreement,
executed by a duly authorized officer of EMAP.
6.2 Deliveries by VJN. On or prior to the Closing, VJN shall
execute or cause to be executed and deliver or cause to be delivered to EMAP
the following documents, certificates and agreements:
(a) Stock Certificate. A certificate representing all of
the Shares, together with stock transfer forms duly executed to effect transfer
of the Shares to EMAP on the books and records of VJN;
(b) Representations and Warranties. A certificate
executed by a duly authorized officer of VJN certifying that the
representations and warranties relating to VJN contained in this Agreement are
true and correct in all material respects as of the Closing, except for any
representations or warranties that relate solely to an earlier date (in which
case such representations and warranties were true and correct as of such
earlier date);
(c) Legal Opinion. A legal opinion of the law firm of
▇▇▇▇▇, Mandler, Croland, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, P.A., in the form agreed upon by
the parties hereto;
(d) Resolutions of VJN. A true and complete copy,
certified by the President of VJN, of the resolutions duly and validly adopted
by the Board evidencing its authorization of the execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby;
(e) Incumbency Certificate of VJN. A certificate of the
Secretary of VJN certifying the names and signatures of the officers of VJN
authorized to sign this Agreement and the other documents to be delivered
hereunder on behalf of VJN; and
(f) Registration Agreement. The Registration Agreement,
executed by a duly authorized officer of VJN.
6.3 Conditions Precedent to the Parties' Obligations to Close.
The obligations of each of VJN and EMAP hereunder to consummate the
transactions contemplated hereby are subject to the satisfaction or, in each
party's sole discretion, waiver on or before the Closing of each of the
following conditions:
(a) Deliveries. Receipt by the appropriate parties of
the items enumerated in Sections 6.1 and 6.2 hereof.
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(b) Stockholder Approval. The holders of a majority of
VJN's common stock shall have approved this Agreement and the transactions
contemplated hereby.
(c) Amendment of VJN Articles of Incorporation. VJN's
Articles of Incorporation shall have been amended so as to authorize the
issuance of the Shares.
(d) No Proceeding or Litigation. No action, proceeding
or litigation shall have been commenced or threatened by any Governmental
Authority seeking to restrain or materially alter the transaction contemplated
hereby which, in the reasonable good faith determination of VJN or EMAP, is
likely to render it impossible or unlawful, or otherwise render inadvisable the
parties' intent, to consummate the transactions contemplated hereby.
ARTICLE VII
INDEMNIFICATION
7.1 Survival. All representations and warranties contained herein
and made in writing by or on behalf of the parties hereto in connection with
the transactions contemplated hereby shall survive the execution and delivery
of this Agreement and the Closing for a period of twelve (12) months following
the Closing Date, regardless of any investigation made at any time with respect
to any of the foregoing or any information the parties may have in respect
thereto.
7.2 EMAP's Right to Indemnification. Subject to the provisions of
this Article VII and in addition to any other rights and remedies available to
EMAP under applicable law, VJN shall indemnify and hold harmless EMAP and any
of its officers, directors, shareholders, employees, agents, representatives,
attorneys, successors, predecessors and assigns from and against: (a) any and
all losses, obligations, liabilities, damages, claims, deficiencies, costs and
expenses (including, but not limited to, the amount of any settlement entered
into pursuant hereto and all reasonable legal and other expenses incurred in
connection with the investigation, prosecution or defense of the matter)
(collectively "Claims"), which may be asserted against or sustained or incurred
by EMAP in connection with, arising out of, or relating to (i) any breach of
any, or any false, incorrect or misleading, representation or warranty that is
made by VJN herein or in any Exhibit, Schedule, certificate or other document
delivered to EMAP by VJN in connection with this Agreement, or (ii) any breach
of any agreements and covenants made by VJN herein or in any Exhibit, Schedule,
certificate or other document delivered to EMAP by VJN in connection with this
Agreement; and (b) any and all costs and expenses incurred by EMAP in
connection with the enforcement of its rights under this Agreement. However,
VJN shall not be liable for any Claims that result solely from a decline in the
value of the Shares below the Purchase Price if such decline is not directly
related to and does not directly result from the fact, event or circumstance
giving rise to any inaccuracy in or breach of any of the representations and
warranties, covenants or agreements made by VJN herein. Furthermore, the
aggregate liability of VJN to EMAP under this Article VII shall not exceed the
Purchase Price.
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7.3 VJN's Right to Indemnification. Subject to the provisions of
this Article VII and in addition to any other rights and remedies that may be
available to VJN under applicable law, EMAP shall indemnify and hold harmless
VJN and any of its officers, directors, shareholders, employees, agents,
representatives, attorneys, successors, predecessors and assigns from and
against: (a) Claims which may be asserted against or sustained or incurred by
VJN in connection with, arising out of, or relating to (i) any breach of any,
or any false, incorrect or misleading, representation or warranty that is made
by EMAP herein or in any Exhibit, Schedule, certificate or other document
delivered to VJN by EMAP in connection with this Agreement, or (ii) any breach
of any agreements and covenants made by EMAP herein or in any Exhibit,
Schedule, certificate or other document delivered to VJN by EMAP in connection
with this Agreement; and (b) any and all costs and expenses incurred by VJN in
connection with the enforcement of its rights under this Agreement. However,
EMAP's aggregate liability under this Article VII shall not exceed the Purchase
Price.
7.4 Procedure for Claims.
(a) Notice of Claim. Promptly, but in any event within
30 days after obtaining knowledge of any claim or demand which may give rise
to, or could reasonably give rise to, a claim for indemnification hereunder
(any such claim an "Indemnification Claim"), the party or parties entitled to
indemnification hereunder (the "Indemnified Party") shall give written notice
to the party or parties subject to indemnification obligations therefor (the
"Indemnifying Party") of such Indemnification Claim (a "Notice of Claim"). A
Notice of Claim shall be given with respect to all Indemnification Claims.
However, the failure to timely give a Notice of Claim to the Indemnifying Party
shall not relieve the Indemnifying Party from any liability that it may have to
the Indemnified Party hereunder to the extent that the Indemnifying Party is
not prejudiced by such failure. Subject to Section 7.1, no Indemnified Party
shall be entitled to give a Notice of Claim with respect to any representation
and warranty after the first anniversary of the Closing Date. The Notice of
Claim shall set forth the amount (or a reasonable estimate) of the loss, damage
or expense suffered, or which may be suffered, by the Indemnified Party as a
result of such Indemnification Claim and a brief description of the facts
giving rise to such Indemnification Claim. The Indemnified Party shall furnish
to the Indemnifying Party such information (in reasonable detail) as the
Indemnified Party may have with respect to such Indemnification Claim
(including copies of any summons, complaint or other pleading which may have
been served on it and any written claim, demand, invoice, billing or other
document evidencing or asserting the same).
(b) Third Party Claims.
(i) If the claim or demand set forth in
the Notice of Claim is a claim or demand asserted by a third party (a "Third
Party Claim"), the Indemnifying Party shall have 15 days (or such shorter
period if an answer or other response or filing with respect to the pleadings
served by the third party is required prior to the 15th day) after the date of
receipt by the Indemnifying Party of the Notice of Claim (the "Notice Date") to
notify the Indemnified Party
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in writing of the election by the Indemnifying Party to defend the Third Party
Claim on behalf of the Indemnified Party.
(ii) If the Indemnifying Party elects to
defend a Third Party Claim on behalf of the Indemnified Party, the Indemnified
Party shall make available to the Indemnifying Party and its agents and
representatives all records and other materials in its possession which are
reasonably required in the defense of the Third Party Claim and the
Indemnifying Party shall pay any expenses payable in connection with the
defense of the Third Party Claim as they are incurred (whether incurred by the
Indemnified Party or Indemnifying Party).
(iii) In no event may the Indemnifying
Party settle or compromise any Third Party Claim without the Indemnified
Party's consent, which shall not be unreasonably withheld.
(iv) If the Indemnifying Party elects to
defend a Third Party Claim, the Indemnified Party shall have the right to
participate in the defense of the Third Party Claim, at the Indemnified Party's
expense (and without the right to indemnification for such expense under this
Agreement). However, the reasonable fees and expenses of counsel retained by
the Indemnified Party shall be at the expense of the Indemnifying Party if: (A)
the use of the counsel chosen by the Indemnifying Party to represent the
Indemnified Party would present such counsel with a conflict of interest; (B)
the parties to such proceeding include both the Indemnified Party and the
Indemnifying Party and there may be legal defenses available to the Indemnified
Party which are different from or additional to those available to the
Indemnifying Party; (C) within 10 days after being advised by the Indemnifying
Party of the identity of counsel to be retained to represent the Indemnified
Party, the Indemnified Party objects to the retention of such counsel for valid
reasons (which shall be stated in a written notice to Indemnifying Party), and
the Indemnifying Party does not retain different counsel reasonably
satisfactory to the Indemnified Party; or (D) the Indemnifying Party authorizes
the Indemnified Party to retain separate counsel at the expense of the
Indemnifying Party.
(v) If the Indemnifying Party does elect
to defend a Third Party Claim, or does not defend a Third Party Claim in good
faith, the Indemnified Party may, in addition to any other right or remedy it
may have hereunder, at the sole and exclusive expense of the Indemnifying
Party, defend such Third Party Claim. However, such expenses shall be payable
by the Indemnifying Party only if and when such Third Party Claim becomes
payable.
(vi) To the extent that an Indemnified
Party recovers on a Third Party Claim, the amount of such recovery (after
deduction of all costs and expenses incurred in connection with such Third
Party Claim) shall reduce, dollar-for-dollar, the indemnification obligation
otherwise owing by the Indemnifying Party.
(c) Cooperation in Defense. The Indemnified Party shall
cooperate with the Indemnifying Party in the defense of a Third Party Claim.
Subject to the foregoing, (i) the
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Indemnified Party shall not have any obligation to participate in the defense
of or to defend any Third Party Claim, and (ii) the Indemnified Party's defense
of or its participation in the defense of any Third Party Claim shall not in
any way diminish or lessen its right to indemnification as provided in this
Agreement.
ARTICLE VIII
CONFIDENTIAL INFORMATION
8.1 Each party shall keep confidential all Confidential
Information obtained from the other party hereto in connection with the
negotiation of this Agreement and the transactions contemplated hereby. Except
as expressly permitted by VJN in writing, neither EMAP nor any of its
Affiliates shall use VJN's Confidential Information to develop or operate a
programming service which is directly competitive with the Business as operated
by VJN or any of its Affiliates.
8.2 Notwithstanding the restrictions of Section 8.1, any party
(the "Disclosing Party") may disclose the other party's Confidential
Information: (a) to the Disclosing Party's Representatives so long as the
Representatives are informed of the confidential nature of the Confidential
Information; (b) if in the opinion of the Disclosing Party's legal counsel,
disclosure is required pursuant to any applicable Law, including the
Securities Act and the Exchange Act; (c) if legally compelled by Governmental
Order, judicial or administrative order, deposition, interrogatory, request for
documents, subpoena, investigative demand or other discovery process. However,
in the case of the foregoing clause (c), the Disclosing Party shall use its
reasonable best efforts to prevent disclosure of the Confidential Information
by legal means including, if applicable, attempting to obtain a protective
order.
8.3 If this Agreement is terminated, the parties shall, and shall
cause their Representatives to, return the other party's Confidential
Information (and all copies thereof) to the other party.
8.4 Each party shall be responsible for a breach of this Article
VIII by its Representatives.
ARTICLE IX
TERMINATION
9.1 Grounds for Termination. This Agreement may be terminated at
any time prior to Closing:
(a) upon the written mutual consent of VJN and EMAP;
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(b) immediately, by VJN if EMAP breaches any material
representation, warranty or covenant contained herein and such breach has not
been cured prior to the Closing Date, after giving written notice by VJN to
EMAP;
(c) immediately, by EMAP if VJN breaches any material
representation, warranty or covenant contained herein and such breach has not
been cured prior to the Closing Date, after giving written notice by EMAP to
VJN;
(d) by either VJN or EMAP if the conditions contained in
Section 6.3 hereof have not been satisfied or waived by the Closing Date.
9.2 Effect of Termination. If this Agreement is terminated
pursuant to this Article IX:
(a) this Agreement shall become void, except for the
terms and conditions of Article VIII hereof, which shall survive such
termination;
(b) neither party shall have any liability unless such
party breached a material representation, warranty or covenant contained
herein, which breach resulted in reasonable, quantifiable and verifiable
damages to the other party hereto.
ARTICLE X
GENERAL PROVISIONS
10.1 Expenses. Except as otherwise specified in this Agreement,
all costs and expenses, including, without limitation, fees and disbursements
of counsel, financial advisors and accountants, incurred in connection with
this Agreement and the transactions contemplated hereby shall be paid by the
party incurring such costs and expenses.
10.2 Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made) upon the earliest to occur of
(a) receipt, if made by personal service, (b) three days after dispatch, if
made by reputable overnight courier service, (c) upon the delivering party's
receipt of a written confirmation of a transmission made by cable, by telecopy,
by telegram, or by telex or (d) seven days after being mailed by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 10.2):
(a) if to EMAP:
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: The Company Secretary
Telecopy: (01733) 312115
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(b) if to VJN:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇, Mandler, Croland, ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
10.3 Public Announcements. Except as required by Law or any
applicable Governmental Authority, no party to this Agreement shall make, or
cause to be made, any press release or public announcement in respect of this
Agreement or the transactions contemplated hereby or otherwise communicate with
any news media without the prior written consent of the other party. Except to
the extent prohibited by applicable law, the parties shall cooperate as to the
timing and contents of any such press release or public announcement.
10.4 Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
10.5 Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.
10.6 Entire Agreement. This Agreement, including all of the
Exhibits and Schedules attached hereto which are incorporated herein by this
reference, constitutes the entire agreement of the parties hereto with respect
to the subject matter hereof and thereof and supersedes all prior agreements
and undertakings, both written and oral, between VJN and EMAP with respect to
the subject matter hereof and thereof.
10.7 Assignment. This Agreement and the rights and duties
hereunder may not be assigned or assumed by operation of law or otherwise
without the express prior written consent of the other parties hereto (which
consent may be granted or withheld in the sole discretion of such other
parties, as applicable).
10.8 Amendment; Waiver. This Agreement may not be amended or
modified except by an instrument in writing signed by, or on behalf of, each
party hereto. Each party to this Agreement may: (a) extend the time for the
performance of any of the obligations or other acts
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of the other parties; (b) waive any inaccuracies in the representations and
warranties of the other parties contained herein or in any document delivered
by the other party pursuant hereto; or (c) waive compliance with any of the
agreements or conditions of the other parties contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument in
writing signed by all of the other parties to be bound thereby. Any waiver of
any term or condition shall not be construed as a waiver of any subsequent
breach or a subsequent waiver of the same term or condition, or a waiver of any
other term or condition, of this Agreement. The failure of any party to assert
any of its rights hereunder shall not constitute a waiver of any of such rights.
10.9 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Florida (without regard
to its principles regarding conflicts of law).
10.10 Choice of Forum. All actions or proceedings initiated by any
party hereto and arising directly or indirectly out of this Agreement which are
brought to judicial proceedings shall be litigated in the United States
District Court for the Southern District of Florida or, if such court cannot
or will not exercise jurisdiction, in the Florida State Circuit Court sitting
in Dade County, Florida. Each of the parties hereto expressly submits to the
exclusive jurisdiction of the above-referenced courts.
10.11 Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all of which
taken together shall constitute one and the same agreement.
10.12 Attorneys' Fees. If any legal action or other proceeding is
brought for the enforcement of this Agreement, or because of an alleged
dispute, breach, default or misrepresentation in connection with any of the
provisions of this Agreement, the prevailing party shall be entitled to recover
reasonable attorneys' fees and other costs incurred in that action or
proceeding, in addition to any other relief to which it may be entitled.
10.13 Further Action. Each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things reasonably necessary, proper or advisable under
applicable Law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and consummate and
make effective the transactions contemplated by this Agreement.
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IN WITNESS WHEREOF, VJN and EMAP have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
VIDEO JUKEBOX NETWORK, INC. EMAP PLC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------- -------------------------------------
Name: Name:
------------------------------ -----------------------------------
Title: Title:
----------------------------- ----------------------------------
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SCHEDULE 3.3
No Conflict
Pursuant to the terms of a Stock Purchase Agreement, dated as of
November 21, 1990, between VJN and TCI Liberty, Inc. ("TCI"), TCI or its
assigns have preemptive rights regarding any original issuance of VJN stock.
On October 17, 1996, VJN notified TCI's present assignee, Liberty VJN, Inc.
("Liberty") of the proposed issuance of the Shares to EMAP. In doing so, VJN
requested that Liberty waive any preemptive rights which it may have with
respect to the issuance of the Shares and the Conversion Shares. As of the
date of this Agreement, Liberty has not advised VJN whether it will waive such
preemptive rights.
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SCHEDULE 3.6
Consents and Approvals
Pursuant to Section 14c-2 of the Exchange Act, VJN must file an
Information Statement with the SEC with respect to the amendment to VJN's
Articles of Incorporation to be approved by the written consent of the holders
of at least a majority of VJN's shares of common stock, par value $0.001 per
share. Upon the later of ten days after the filing of the Information
Statement with the SEC or the completion by the staff of the SEC of its review
of the Information Statement, VJN is required to mail a copy of the Information
Statement to its stockholders. The amendment to the Articles of Incorporation
may not be effectuated with the State of Florida until 20 calendar days after
the Information Statement is first distributed to VJN's stockholders.
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EXHIBIT "A"
ARTICLES OF AMENDMENT AND RESTATEMENT
OF
VIDEO JUKEBOX NETWORK, INC.
Pursuant to the provisions of Sections 607.1006 and 607.1007 of the
Florida Business Corporation Act, the undersigned corporation adopts: (i) the
amendment to its Third Amended and Restated Articles of Incorporation; and (ii)
the Fourth Amended and Restated Articles of Incorporation set forth below.
(a) The name of the corporation is Video Jukebox Network, Inc.
(the "Corporation").
(b) The amendment to the Third Amended and Restated Articles of
Incorporation set forth in paragraphs 3 and 4 below: (i) was duly adopted by
the Board of Directors of the Corporation on October 30, 1996; (ii) was
approved by written consent by stockholders of the Corporation holding a
sufficient number of voting shares to approve the amendment; and (iii) shall be
effective upon acceptance for filing by the Florida Department of State.
(c) Article III of the Third Amended and Restated Articles of
Incorporation is amended in its entirety to read as follows:
SECTION 1. Authorized Stock. The maximum number of
shares of stock which this Corporation is authorized to have at any time is:
(a) 40,000,000 shares of common stock, having a par value
of $.001 per share (the "Common Stock");
(b) 200,000 shares of 8% convertible preferred stock,
having a par value of $1.00 per share (the "8% Preferred Stock"); and
(c) 1,800,000 shares of 6% convertible redeemable
preferred stock, having a par value of $.15 per share (the "6% Preferred
Stock").
SECTION 2. Voting. The holders of shares of Common Stock, the 8%
Preferred Stock and the 6% Preferred Stock are entitled to cast one vote per
share at all stockholders meetings for all purposes. Except as otherwise
required by the Florida Business Corporation Act, the shares of 6% Preferred
Stock and the shares of 8% Preferred Stock (collectively, the "Preferred
Stock") shall vote with the shares of Common Stock as one voting class.
SECTION 3. Conversion. The holders of shares of Preferred Stock shall
have the following rights of conversion:
(a) Each share of 8% Preferred Stock shall be
convertible, at the election of the holder thereof, into three shares of Common
Stock.
(b) Each share of 6% Preferred Stock shall be convertible, at
the election of the holder thereof, into one share of Common Stock. In the
event that there are any accrued and
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unpaid dividends due on the 6% Preferred Stock at the time of conversion, then
the accrued and unpaid dividends shall automatically be converted into shares
of Common Stock at a rate of one share of Common Stock for each $1.50 of
accrued and unpaid dividends, rounded to the nearest whole share. Subject to
the provisions of Section 6 of this Article III, the right of conversion shall
be available at any time.
SECTION 4. Dividends. The holders of shares of Preferred Stock shall
be entitled to the following dividends:
(a) The holders of the shares of 8% Preferred Stock shall
be entitled to receive cumulative cash dividends, which shall accrue at the
rate of 8% per annum of the aggregate par value of the outstanding shares of 8%
Preferred Stock. No cash dividends shall be declared or paid on any shares of
Common Stock until all accrued and unpaid cash dividends are paid on the shares
of 8% Preferred Stock.
(b) The holders of the shares of 6% Preferred Stock shall
be entitled to receive cumulative cash dividends, which shall accrue at the
rate of $.09 per share of 6% Preferred Stock per annum. No cash dividends
shall be declared or paid on any shares of Common Stock or the 8% Preferred
Stock until all accrued and unpaid dividends are paid on the shares of 6%
Preferred Stock. All dividends on the 6% Preferred Stock shall cease to accrue
on the Election Date, as such term is defined in Section 6 of this Article III.
SECTION 5. Liquidation. Upon the liquidation, dissolution or winding
up of the Corporation, the holders of shares of Preferred Stock shall be
entitled to the following rights:
(a) the holders of the shares of 6% Preferred Stock shall
be entitled upon liquidation, dissolution or winding up to receive a payment
equal to $1.50 per share of 6% Preferred Stock, plus all accrued and unpaid
dividends thereon before any payment shall be made to the holders of the 8%
Preferred Stock or the Common Stock. The holders of the shares of 6% Preferred
Stock shall not be entitled to any further distribution of the assets of the
Corporation.
(b) the holders of the shares of 8% Preferred Stock shall
be entitled upon liquidation, dissolution or winding up to receive all accrued
and unpaid dividends before any distribution of payment to the holders of
Common Stock, which distribution or payment would then be made on a pro rata
basis between holders of the shares of 8% Preferred Stock and the Common Stock.
SECTION 6. Redemption. Five years after the date of issuance of the
6% Preferred Stock (the "Election Date"), each share of 6% Preferred Stock
shall, at the election of each holder thereof, either be redeemed for cash in
accordance with this Section 6 or converted into shares of Common Stock in
accordance with Section 3 of this Article III. If a holder elects to redeem
the 6% Preferred Stock, such holder shall be entitled to receive a cash payment
equal to $1.50 per share of 6% Preferred Stock, together with the amount, as of
the Election Date, of all accrued and unpaid dividends. No right of redemption
shall exist prior to the Election Date or if the Corporation is then insolvent
or would become insolvent as a result of such redemption. Each holder of 6%
Preferred Stock shall give written notice, via facsimile and reputable
overnight courier service, to the Secretary of the Corporation of its election
to either have the 6% Preferred Stock redeemed for cash or converted into
shares of Common Stock within 30 days of the
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Election Date. If the Corporation does not timely receive such notice from any
holder of the 6% Preferred Stock, the Corporation shall have the right to
determine whether such 6% Preferred Stock is redeemed in accordance with this
Section 6 or converted into shares of Common Stock in accordance with Section 3
of this Article III.
SECTION 7. Other Rights. Except as otherwise expressly
stated herein, the consideration for the issuance of the Common Stock and
Preferred Stock of this Corporation, and the dividends, the voting rights, the
rights of redemption and the relative rights and preferences of such stock are
to be established by the Board of Directors.
4. Article V of the Third Amended and Restated Articles of
Incorporation is amended in its entirety to read as follows:
ARTICLE V
The post office address of the principal office of the Corporation
shall be ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, but other offices for
the transaction of business may be located wherever the Board of Directors may
deem necessary or appropriate.
5. The Fourth Amended and Restated Articles of Incorporation
adopted is as follows:
FOURTH AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
VIDEO JUKEBOX NETWORK, INC.
ARTICLE I
The name of this Corporation is VIDEO JUKEBOX NETWORK, INC.
ARTICLE II
This Corporation is organized for the purpose of transacting any or
all lawful business for which corporations may be organized under the laws of
the United States and the Florida Business Corporation Act, except a commercial
banking, safe deposit, trust, insurance, surety, express, railroad, canal,
telegraph, telephone or cemetery company, a building and loan association,
mutual fire insurance association, cooperative association, fraternal benefit
society, state fair or exposition, unless prior regulatory approval is
obtained, and to engage in any business or transaction deemed necessary,
convenient or incidental to carrying out any such business within or without
the United States.
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ARTICLE III
SECTION 1. Authorized Stock. The maximum number of shares of
stock which this Corporation is authorized to have at any time is:
(a) 40,000,000 shares of common stock, having a par value
of $.001 per share (the "Common Stock");
(b) 200,000 shares of 8% convertible preferred stock,
having a par value of $1.00 per share (the "8% Preferred Stock"); and
(c) 1,800,000 shares of 6% convertible redeemable
preferred stock, having a par value of $.15 per share (the "6% Preferred
Stock").
SECTION 2. Voting. The holders of shares of Common Stock, the 8%
Preferred Stock and the 6% Preferred Stock are entitled to cast one vote per
share at all stockholders meetings for all purposes. Except as otherwise
required by the Florida Business Corporation Act, the shares of 6% Preferred
Stock and the shares of 8% Preferred Stock (collectively, the "Preferred
Stock") shall vote with the shares of Common Stock as one voting class.
SECTION 3. Conversion. The holders of shares of Preferred Stock shall
have the following rights of conversion:
(a) Each share of 8% Preferred Stock shall be convertible, at
the election of the holder thereof, into three shares of Common Stock.
(b) Each share of 6% Preferred Stock shall be convertible, at
the election of the holder thereof, into one share of Common Stock. In the
event that there are any accrued and unpaid dividends due on the 6% Preferred
Stock at the time of conversion, then the accrued and unpaid dividends shall
automatically be converted into shares of Common Stock at a rate of one share
of Common Stock for each $1.50 of accrued and unpaid dividends, rounded to the
nearest whole share. Subject to the provisions of Section 6 of Article III
hereof, the right of conversion shall be available at any time.
SECTION 4. Dividends. The holders of shares of Preferred Stock shall
be entitled to the following dividends:
(a) The holders of the shares of 8% Preferred Stock shall
be entitled to receive cumulative cash dividends, which shall accrue at the
rate of 8% per annum of the aggregate par value of the outstanding shares of 8%
Preferred Stock. No cash dividends shall be declared or paid on any shares of
Common Stock until all accrued and unpaid cash dividends are paid on the shares
of 8% Preferred Stock.
(b) The holders of the shares of 6% Preferred Stock shall
be entitled to receive cumulative cash dividends, which shall accrue at the
rate of $.09 per share of 6% Preferred Stock
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per annum. No cash dividends shall be declared or paid on any shares of Common
Stock or the 8% Preferred Stock until all accrued and unpaid dividends are paid
on the shares of 6% Preferred Stock. All dividends on the 6% Preferred Stock
shall cease to accrue on the Election Date, as such term is defined in Section
6 of this Article III.
SECTION 5. Liquidation. Upon the liquidation, dissolution or winding
up of the Corporation, the holders of shares of Preferred Stock shall be
entitled to the following rights:
(a) the holders of the shares of 6% Preferred Stock shall
be entitled upon liquidation, dissolution or winding up to receive a payment
equal to $1.50 per share of 6% Preferred Stock, plus all accrued and unpaid
dividends thereon before any payment shall be made to the holders of the 8%
Preferred Stock or the Common Stock. The holders of the shares of 6% Preferred
Stock shall not be entitled to any further distribution of the assets of the
Corporation.
(b) the holders of the shares of 8% Preferred Stock shall
be entitled upon liquidation, dissolution or winding up to receive all accrued
and unpaid dividends before any distribution of payment to the holders of
Common Stock, which distribution or payment would then be made on a pro rata
basis between holders of the shares of 8% Preferred Stock and the Common Stock.
SECTION 6. Redemption. Five years after the date of issuance of the
6% Preferred Stock (the "Election Date"), each share of 6% Preferred Stock
shall, at the election of each holder thereof, either be redeemed for cash in
accordance with this Section 6 or converted into shares of Common Stock in
accordance with Section 3 of this Article III. If a holder elects to redeem
the 6% Preferred Stock, such holder shall be entitled to receive a cash payment
equal to $1.50 per share of 6% Preferred Stock, together with the amount, as of
the Election Date, of all accrued and unpaid dividends. No right of redemption
shall exist prior to the Election Date or if the Corporation is then insolvent
or would become insolvent as a result of such redemption. Each holder of 6%
Preferred Stock shall give written notice, via facsimile and reputable
overnight courier service, to the Secretary of the Corporation of its election
to either have the 6% Preferred Stock redeemed for cash or converted into
shares of Common Stock within 30 days of the Election Date. If the Corporation
does not timely receive such notice from any holder of the 6% Preferred Stock,
the Corporation shall have the right to determine whether such 6% Preferred
Stock is redeemed in accordance with this Section 6 or converted into shares of
Common Stock in accordance with Section 3 of this Article III.
SECTION 7. Other Rights. Except as otherwise expressly stated herein,
the consideration for the issuance of the Common Stock and Preferred Stock of
this Corporation, and the dividends, the voting rights, the rights of
redemption and the relative rights and preferences of such stock are to be
established by the Board of Directors.
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ARTICLE IV
This Corporation shall have permanent and perpetual existence.
ARTICLE V
The post office address of the principal office of the Corporation
shall be ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, but other offices for
the transaction of business may be located wherever the Board of Directors may
deem necessary or appropriate.
ARTICLE VI
SECTION 1. Number, Election and Term of Office. The business of the
Corporation shall be managed by a Board of Directors who need not be
stockholders of the Corporation. The number of directors shall be at least
three (3), which number may be increased or decreased from time to time by
resolution of the majority of the Board of Directors, but shall not be less
than three (3) nor more than fifteen (15).
SECTION 2. Removal. Any director or the entire Board of Directors may
be removed; however, such removal must be for cause and must be approved as set
forth in this Section. Except as may otherwise be provided by law, cause for
removal shall be construed to exist only if: (1) the director whose removal is
proposed has been convicted of a felony by a court of competent jurisdiction;
or (2) such director has been adjudicated by a court of competent jurisdiction
to be liable for negligence or misconduct in the performance of his duty to the
Corporation in a matter of substantial importance to the Corporation and such
adjudication is no longer subject to direct appeal.
Removal for cause, as defined in (1) and (2) above,
must be approved by at least a majority of the shares of the Corporation then
entitled to vote at an election for that director or by at least a majority of
the total number of directors. Any action for the removal of a director must
be brought within one year of such conviction or adjudication.
SECTION 3. Vacancies. Any vacancies in the Board of Directors
resulting from death, resignation, retirement, removal from office, the
creation of a new directorship by an increase in the authorized number of
directors, or otherwise shall be filled by a majority vote of the directors
then in office, though less than a quorum of the entire Board of Directors.
Directors so chosen to fill any vacancy shall hold office for a term expiring
at the Annual Meeting of Stockholders at which the term of the class to which
they have been elected expires.
SECTION 4. Amendment, Alteration, Repeal, Etc.. Notwithstanding
anything contained in these Articles of Incorporation to the contrary, the
affirmative vote of the holders of at least 67% of the shares of the
Corporation then entitled to vote in the election of directors
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shall be required to amend, alter or repeal, or to adopt any provision
inconsistent with, this Article VI.
ARTICLE VII
No stockholders of the Corporation shall, because of his ownership of
stock, have a preemptive or other right to purchase, subscribe for, or take any
part of any stock or any part of the notes, debentures, bonds, or other
securities convertible into or carrying options or warrants to purchase stock
of the Corporation issued, optioned, or sold by it after its incorporation.
Any part of the capital stock and any part of the notes, debentures, bonds or
other securities convertible into or carrying options or warrants to purchase
stock of the Corporation authorized by these Articles of Incorporation, or by
amended articles duly filed, may at any time be issued, optioned for sale, and
sold or disposed of by the Corporation pursuant to resolution of the Board of
Directors to such persons and upon such terms as may to such Board seem proper
without first offering such stock or securities or any part thereof to existing
stockholders.
ARTICLE VIII
The fiscal year of this Corporation shall be based on the calendar
year ending on the 31st day of December of each year.
ARTICLE IX
In addition to any affirmative note required by law or these Articles
of Incorporation:
(1) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of transactions) by the
Corporation of all or substantially all of its assets,
(2) the adoption of any plan or proposal for the
liquidation, dissolution or winding up of the Corporation, or
(3) any reclassification of securities or
recapitalization of the Corporation, or any merger or consolidation of the
Corporation, shall require the affirmative vote of the holders of at least
seventy-five (75%) of the then-outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class. Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a lesser
percentage may be specified, by law or in any agreement with any national
securities exchange or otherwise.
Notwithstanding anything contained in these Articles of Incorporation
to the contrary, the affirmative vote of the holders of at least seventy-five
percent (75%) of the shares of the Corporation then entitled to vote in the
election of directors shall be required to amend, alter or repeal, or to adopt
any provision inconsistent with, this Article IX.
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IN WITNESS WHEREOF, the undersigned has executed these Articles of
Amendment and Restatement as of the ____ day of _________, 1996.
VIDEO JUKEBOX NETWORK, INC.
By:
-------------------------------------
STATE OF )
)
COUNTY OF )
The foregoing instrument was acknowledged before me this ___ day of
_________, 1996 by ____________________________ of _________________________, a
Florida corporation, on behalf of the corporation. He is personally known to
me or has produced _________________ as identification and did take an oath.
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NOTARY PUBLIC
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Type or Print Name
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