AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
JONES INTERNATIONAL NETWORKS, LTD.
These Amended and Restated Articles of Incorporation amend and
restate in their entirety the Articles of Incorporation and Articles of
Amendment to the Articles of Incorporation of Jones International Networks,
Ltd. filed with the Colorado Secretary of State on May 28, 1998 and September
30, 1999, respectively, and were duly adopted in accordance with the
provisions of Sections 7-110-103 and 7-110-107 of the Colorado Business
Corporation Act. These Amended and Restated Articles of Incorporation contain
amendments that were adopted by the shareholders of Jones International
Networks, Ltd. on January 26, 2000, and the number of votes cast for the
amendments by each voting group entitled to vote separately on the amendments
was sufficient for approval by that voting group.
ARTICLE I
The name of the corporation is Jones International Networks, Ltd.
(the "Corporation").
ARTICLE II
The nature of the business or purposes of the Corporation is to
engage in the transaction of all lawful business and to pursue any other
lawful purpose or purposes for which a corporation may be organized under the
laws of the State of Colorado. The Corporation shall have, enjoy and exercise
all of the rights, powers and privileges conferred upon corporations
organized under the laws of the State of Colorado, whether now or hereafter
in effect, and whether or not herein specifically mentioned. The foregoing
enumeration of purposes and powers shall not limit or restrict in any manner
the exercise of other and further rights and powers that may now or hereafter
be allowed or permitted by law.
ARTICLE III
The period of duration of the Corporation shall be perpetual.
ARTICLE IV
The street address of the registered office of the Corporation shall
be 9697 E. Mineral Avenue, Englewood, Colorado 80112. The name of the
registered agent of the Corporation at such address shall be Lorri Ellis.
ARTICLE V
The address of the principal office of the Corporation shall be 9697
E. Mineral Avenue, Englewood, Colorado 80112.
ARTICLE VI
6.1. AUTHORIZED SHARES. The total number of shares of capital stock
that the Corporation shall have authority to issue is 104,149,400 shares,
consisting of three classes of capital stock:
(a) 100,000,000 shares of Class A Common Stock, par value
$.01 per share (the "Class A Shares");
(b) 2,231,400 shares of Class B Common Stock, par value
$.01 per share (the "Class B Shares; and, together with the Class A Shares,
the "Common Shares"); and
(c) 1,918,000 shares of Series A Convertible Preferred
Stock, par value $.01 per share (the "Preferred Stock").
6.2. DESIGNATIONS, PREFERENCES, ETC. The designations, preferences,
powers, qualifications and special or relative rights or privileges of the
capital stock of the Corporation shall be as set forth in Articles VII and
VIII below.
ARTICLE VII
7.1. IDENTICAL RIGHTS. Except as herein otherwise expressly provided
in this Article VII, all Common Shares shall be identical and shall entitle
the holders thereof to the same rights and privileges.
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7.2. DIVIDENDS.
(a) When, as and if dividends are declared by the
Corporation's Board of Directors, whether payable in cash, in property or in
securities of the Corporation, the holders of Common Shares shall be entitled
to share equally in and to receive, in accordance with the number of Common
Shares held by each such holder, all such dividends. The Board of Directors
of the Corporation may declare a dividend payable solely in Class A Shares to
holders of both Class A Shares and Class B Shares.
(b) Dividends payable under this Paragraph 7.2 shall be
paid to the holders of record of the outstanding Common Shares as their name
shall appear on the stock register of the Corporation on the record date
fixed by the Board of Directors in advance of declaration and payment of each
dividend. Any Common Shares issued as a dividend pursuant to this Paragraph
7.2 shall, when so issued, be duly authorized, validly issued, fully paid and
non-assessable, and free of all liens and charges. The Corporation shall not
issue fractions of Common Shares on payment of such dividend but shall issue
a whole number of shares to such holder of Common Shares rounded up or down
in the Corporation's sole discretion to the nearest whole number, without
compensation to the stockholder whose fractional share has been rounded down
or from any stockholder whose fractional share has been rounded up.
(c) Notwithstanding anything contained herein to the
contrary, no dividends on Common Shares shall be declared by the
Corporation's Board of Directors or paid or set apart for payment by the
Corporation at any time that such declaration, payment or setting apart is
prohibited by applicable law.
7.3 STOCK SPLITS. Except as otherwise provided by Paragraph 7.2(a)
above, the Corporation shall not in any manner subdivide (by any stock split,
reclassification, stock dividend, recapitalization, or otherwise) or combine
the outstanding shares of one class of Common Shares unless the outstanding
shares of all classes of Common Shares shall be proportionately subdivided or
combined.
7.4. VOTING RIGHTS.
(a) On all matters submitted to the shareholders not
requiring a class vote under applicable Colorado law, the holders of the
Common Shares shall vote as a single class, with each Class A Share entitled
to one vote and each Class B Share entitled to ten votes, except with respect
to the election of the
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members of the Board of Directors for which there shall be class voting as
described in subparagraph (b) below.
(b) With respect to the election of directors, the holders
of the Class A Shares, voting as a separate voting group, shall be entitled
to elect that number of directors which constitutes 25% of the total
membership of the Board of Directors; and if such 25% is not a whole number,
then the holders of the Class A Shares shall be entitled to elect the nearest
higher whole number of directors which constitutes 25% of such membership.
The holders of the Class B Shares, voting as a separate voting group, shall
be entitled to elect the remaining directors.
(c) With respect to the removal of directors, the holders
of the Class A Shares, voting as a separate voting group, shall only be
entitled to vote on the removal, with or without cause, of any director
elected by the holders of the Class A Shares; and the holders of the Class B
Shares, voting as a separate voting group, shall only be entitled to vote on
the removal, with or without cause, of any director elected by the holders of
the Class B Shares.
(d) Any vacancy occurring in the Board of Directors created
by the death, resignation or removal of any director, whether elected by the
holders of the Class A Shares or the Class B Shares, may be filled by the
affirmative vote of a majority of the remaining directors, though less than a
quorum of the Board of Directors, unless the remaining directors elect to
call a special meeting of the shareholders for the purpose of filling such
vacancy. If permitted by the Bylaws of the Corporation, the Board of
Directors may increase the number of directors, and any vacancy so created
may be filled by the Board of Directors; provided that unless the conditions
set forth in subparagraph (e) below exist in respect of the next previous
meeting of shareholders at which directors have been elected, the number of
directors may be so increased by the Board of Directors only to the extent
that 25% of the enlarged board shall consist of directors elected by the
holders of the Class A Shares or by persons appointed to fill vacancies
created by the death, resignation or removal of persons elected by the
holders of the Class A Shares. Any director elected by the Board of Directors
to fill a vacancy shall serve until the next annual meeting of shareholders
and until his or her successor is elected and has qualified.
(e) The Class A Shares shall not have the right to elect
directors set forth in subparagraph (b) above if, on the record date for any
meeting of shareholders at which directors are to be elected, the number of
issued and outstanding Class A Shares (exclusive of any such shares held as
treasury stock)
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is less than 10% of the aggregated number of issued and outstanding Class A
Shares and Class B Shares (exclusive of any such shares held as treasury
stock). In such event, all directors to be elected at such meeting shall be
elected by holders of Class A Shares and Class B Shares voting together as a
single class, provided that with respect to said election the holders of
Class A Shares shall have one vote for each share and the holders of Class B
Shares shall have ten votes for each share.
7.5 NO PREEMPTIVE OR SUBSCRIPTION RIGHTS. No holder of Common Shares
shall be entitled to preemptive or subscription rights.
7.6 CONVERSION OF CLASS B SHARES. At any time, and from
time-to-time, a holder of shares of Class B shall be entitled to convert
Class B Shares to Class A Shares on a share for share basis. As promptly as
practicable after the surrender of any Class B Shares for conversion and the
receipt of a conversion notice relating thereto, the Corporation shall
deliver or cause to be delivered at said office or agency, to or upon the
written order of the holder of the Class B Shares so surrendered, a
certificate or certificates representing the number of fully paid and
non-assessable Class A Shares into which such Class B Shares (or portions
thereof) may be converted in accordance with the provisions of this Section
7.6, registered in such name or names as are specified in the conversion
notice. In case any Class B Shares shall be surrendered for partial
conversion, the Corporation shall deliver or cause to be delivered a
certificate or certificates representing the unconverted portion of the
surrendered Class B Shares. Such conversion shall be deemed to have been
effected at the close of business on the date when such Class B Shares shall
have been surrendered for conversion together with the conversion notice, so
that the rights of the holder of such Class B Shares as such holder shall
cease at such time and the person or persons entitled to receive the Class A
Shares upon conversion of such Class B Shares shall be treated for all
purposes as having becoming the record holder or holders of such Class A
Shares at such time; PROVIDED, HOWEVER, that no such surrender on any date
when the stock transfer books of the Corporation shall be closed shall be
effective to constitute the person or persons entitled to receive the Class A
Shares upon such conversion as the record holder or holders of such Class A
Shares on such date, but such surrender shall be effective to constitute the
person or persons entitled to receive such Class A Shares as the record
holder or holders thereof for all purposes at the opening of business on the
next succeeding business day on which such stock transfer books are open.
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ARTICLE VIII
8.1. DIVIDENDS. The holders of the Preferred Stock shall be entitled
to receive dividends when, as and if declared by the Board of Directors. No
dividends (in cash, property or shares of the Company) shall be paid on the
Common Shares unless and until equal dividends per share have been declared
and paid on the Preferred Stock.
8.2. LIQUIDATION PREFERENCE. In the event of any liquidation,
dissolution or winding up of the Company, the holders of the Preferred Stock
will be entitled to receive, prior and in preference to the holders of Common
Shares, $12.50 per share of Preferred Stock (as adjusted for any stock
dividends, combinations or splits with respect to the Preferred Stock), plus
any unpaid dividends, and no more. A merger of the Company in which the
Company is not the surviving entity (except a reincorporation merger or other
mere changes of form of the Company) or a sale of all or substantially all of
the Company's assets shall be deemed to be a liquidation, dissolution or
winding up for purposes of this Section 8.2.
8.3. AUTOMATIC CONVERSION. Each share of the Preferred Stock shall
be automatically converted into that number of shares of Class A Shares equal
to the Preferred Stock Conversion Rate (as defined in Section 8.4) upon the
completion by the Company of a public equity offering or a series of public
equity offerings raising aggregate gross proceeds of at least $20,000,000.
8.4. OPTIONAL CONVERSION. Upon compliance with the procedures of
this Section 8, each one share of Preferred Stock shall be convertible at the
option of the holder thereof at any time into that number of shares of Class
A Shares equal to the Preferred Stock Conversion Rate. The Preferred Stock
Conversation Rate shall be determined by dividing $12.50 (as may be adjusted
for any stock dividends, combinations or splits of the Preferred Stock) by
the "Conversion Price." The Conversion Price shall initially be $12.50,
subject to adjustment as hereinafter provided in this Section 8.4.
(a) If the Company shall at any time or from time to time
prior to September 30, 2000, issue any shares of Common Shares, or preferred
stock, warrants, options, rights, or other securities convertible into or
exchangeable or exercisable for shares of Common Shares (such event being
referred to hereinafter as a "Financing"), without consideration or for a
consideration per share less than the prevailing Conversion Price, then the
Conversion Price in effect immediately prior to each such issuance shall
forthwith be adjusted to a
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price equal to the consideration per share received or deemed received by the
Company for such shares or securities convertible or exercisable for shares,
provided, however, that this provision shall not apply to shares issued
pursuant to any option or right to purchase or acquire Common Shares
outstanding on September 30, 1999 or shares which the Company is
contractually bound to issue on such date, regardless of the actual date of
issuance. In the event of an adjustment, the number of shares of Common
Shares issuable upon conversion shall be increased to the number obtained by
dividing the product of the number of shares of Common Shares issuable upon
conversion before such adjustment, and the Conversion Price in effect
immediately prior to the issuance giving rise to this adjustment by the new
Conversion Price.
Notwithstanding anything contained in this Section 8.4, the
adjustment provided for in the immediately preceding paragraph shall not
apply to: (i) options to acquire shares of Common Shares at the fair market
value thereof at the date of grant and the shares of Common Shares subject to
such options; and (ii) shares of Class A Shares issued upon conversion of the
Preferred Stock.
(b) In the event of the issuance by the Company after
September 30, 2000 and prior to October 1, 2007, of any shares of Common
Shares, or preferred stock, warrants, options, rights of other securities
convertible into or exchangeable or exercisable for shares of Common Shares,
without consideration or for a consideration per share less than the
prevailing Conversion Price, then the Conversion Price in effect immediately
prior to each such issuance shall forthwith be adjusted to a price equal to
the quotient obtained by dividing (i) an amount equal to the sum of (a) the
total number of shares of Common Shares outstanding (including any shares of
Common Shares deemed to have been issued pursuant to subdivision (iii) of
clause (c) below, all of which shall be deemed to have been issued
immediately prior to such issuance) multiplied by the Conversion Price in
effect immediately prior to such issuance, plus (b) the consideration
received by the Company upon such issuance, by (ii) the total number of
shares of Common Shares outstanding (including any shares of Common Shares
deemed to have been issued pursuant to subdivision (iii) of clause (c) below,
all of which shall be deemed to have been issued).
(c) For the purposes of any adjustment of the Conversion
Price pursuant to clauses (a) and (b), the following provisions shall be
applicable:
(i) In the case of the issuance of Common Shares
for cash, the consideration shall be deemed to be the amount of cash
received
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by the Company therefor, before deduction for any fees or commissions
which may be paid in connection with any such issuance.
(ii) In the case of the issuance of Common Shares for
a consideration in whole or in part other than cash, the consideration
other than cash shall be deemed to be the fair value of such
consideration as determined in the good faith judgment of the Board of
Directors of the Company.
(iii) In the case of the issuance of (x) options to
purchase or rights to subscribe for Common Shares, (y) securities by
their terms convertible into or exchangeable for Common Shares or (z)
options to purchase or rights to subscribe for such convertible or
exchangeable securities:
(1) The aggregate maximum number of shares
of Common Shares deliverable upon exercise of such options to
purchase or rights to subscribe for Common Shares shall be
deemed to have been issued at the time such options or rights
were issued and for a consideration equal to the consideration
(determined in the manner provided in subdivisions (i) and
(ii) above), if any, received by the Company upon the issuance
of such options or rights plus the minimum purchase price
provided in such options or rights for the Common Shares
covered thereby;
(2) the aggregate maximum number of shares
of Common Shares deliverable upon conversion of or in exchange
for any such convertible or exchangeable securities or upon
the exercise of options to purchase or rights to subscribe for
such convertible or exchangeable securities and subsequent
conversion or exchange thereof shall be deemed to have been
issued at the time such securities were issued or such options
or rights were issued and for a consideration equal to the
consideration received by the Company for any such securities
and related options or rights (excluding any cash received on
account of accrued interest or accrued dividends), plus the
additional consideration, if any, to be received by the
Company upon the conversion or exchange of such securities or
the exercise of any related options or rights (the
consideration in each case to be determined in the manner
provided in subdivisions (i) and (ii) above);
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(3) on any change in the number of shares or
exercise price of Common Shares deliverable upon exercise of
any such options or rights or conversions of or exchange for
such convertible or exchangeable securities, other than a
change resulting from the antidilution provisions thereof, the
Conversion Price shall forthwith be readjusted to such
Conversion Price as would have obtained had the adjustment
made upon the issuance of such options, rights or securities
not converted prior to such change been made upon the basis of
such change; and
(4) on the expiration of any such options or
rights, the termination of any such rights to convert or
exchange or the expiration of any options or rights related to
such convertible or exchangeable securities, the Conversion
Price shall forthwith be readjusted to such Conversion Price
as would have obtained had such options, rights, securities or
options or rights related to such securities not been issued.
(d) If the number of shares of Common Shares outstanding at
any time hereafter is increased by a stock dividend payable in shares of
Common Shares or by a subdivision or split-up of shares of Common Shares,
then, following the record date fixed for the determination of holders of
Common Shares entitled to receive such stock dividend, subdivision or
split-up, such Conversion Price shall be appropriately decreased so that the
number of shares of Common Shares issuable on conversion shall be increased
in proportion to such increase in outstanding shares.
(e) If at any time hereafter the number of shares of Common
Shares outstanding is decreased by a combination of the outstanding shares of
Common Shares, then, following the record date for such combination, the
Conversion Price shall be appropriately increased so that the number of
shares of Common Shares issuable on conversion shall be decreased in
proportion to such decrease in outstanding shares.
(f) If at any time hereafter any reorganization,
reclassification of the capital stock of the Corporation (other than a change
in par value or from par value to no par value or from no par value to par
value or as a result of a stock dividend or subdivision, split-up or
combination of shares), consolidation, merger (including a merger in which
the Company is the surviving entity) or a sale or other disposition of all or
substantially all of the Company's assets shall occur, then each share of
Preferred Stock shall (in lieu of or, in respect of sales
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of all or substantially all assets, in addition to, being exercisable for
shares of Common Shares) after such reorganization, reclassification,
consolidation, merger, sale or other disposition be exercisable into the kind
and number of shares of stock or other securities or property (including
cash) of the Company or of the corporation resulting from such consolidation
or surviving such merger or to which such properties and assets shall have
been sold or otherwise disposed to which the holder of the number of shares
of Common Shares deliverable (immediately prior to the time of such
reorganization, reclassification, consolidation, merger, sale or other
disposition) upon conversion would have been entitled upon such
reorganization, reclassification, consolidation, merger, sale or other
disposition. The provisions of this Section shall similarly apply to
successive reorganizations, reclassifications and other transactions
contemplated above.
(g) All calculations under this Section 8.4 shall be made
to the nearest cent ($.01) or to the nearest one-tenth of a share, as the
case may be. No fractional shares or scrip representing fractions of shares
shall be issued upon conversion of any Preferred Stock. Instead, the number
of shares of Class A Shares received upon conversion shall either be rounded
up or down to the appropriate number of full shares, depending on whether the
applicable fraction of a share is half or less. If the fraction is less than
half the number of shares shall be rounded down. If the fraction is half or
more, the number of shares shall be rounded up.
(h) In any case in which the provisions of this Section 8.4
shall require that an adjustment of the Conversion Price shall become
effective immediately after a record date for an event, the Company may,
until the occurrence of such event, defer issuing to the holder of any
Preferred Stock converted after such record date and before the occurrence of
such event the additional shares of capital stock issuable upon such exercise
by reason of the adjustment required by such event over and above the shares
of capital stock issuable upon exercise before giving effect to such
adjustment; provided, however, the Company shall deliver to such holder a due
bill or other appropriate instrument evidencing such holder's right to
receive such additional shares upon the occurrence of the event requiring
such adjustment.
(i) Whenever the Conversion Price shall be adjusted as
provided in Section 8.4, the Company shall forthwith file, at its principal
office or at such other place as may be designated by the Company, a
statement, signed by its president or chief financial officer and by its
treasurer, showing in detail the facts requiring such adjustment and the
Conversion Price that shall be in
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effect after such adjustment. The Company shall cause a copy of such
statement to be sent by first-class, certified mail, return receipt
requested, postage prepaid, to each holder of the Preferred Stock at such
holder's address appearing in the Company's records.
(j) In the event the Company shall propose to take any
action of the types described in clause (f) of Section 8.4, the Company shall
give notice to each holder of the Preferred Stock, which notice shall specify
the record date, if any, with respect to any such action and the date on
which such action is to take place. Such notice shall also set forth such
facts with respect thereto as shall be reasonably necessary to indicate the
effect of such action (to the extent such effect may be known at the date of
such notice) on the Preferred Stock and the number, kind or class of shares
or other securities or property which shall be deliverable or purchasable
upon the occurrence of such action or deliverable upon conversion of the
Preferred Stock. In the case of any action that would require the fixing of a
record date, such notice shall be given at least 10 days prior to the date so
fixed, and in case of all other action, such notice shall be given at least
15 days prior to the taking of such proposed action. Failure to give such
notice, or any defect therein, shall not affect the legality or validity of
any such action.
(k) The Company will not, by amendment of its Articles of
Incorporation or bylaws or through any reorganization, transfer of assets,
reclassification, merger, dissolution, issue or sale of securities or
otherwise, avoid or seek to avoid the observance or performance of any of the
terms to be observed or performed by the Company hereunder but will at all
times in good faith assist in the carrying out of all the provisions hereof
and in the taking of all such actions as may be necessary or appropriate in
order to protect the rights of the holders of the Warrants against impairment.
(l) The Company shall at all time reserve and keep
available for issuance upon the conversion of the shares of Preferred Stock
such number of its authorized but unissued shares of Class A Shares, free
from all preemptive rights therein, as is reasonably anticipated to be
sufficient to permit the conversion of all outstanding shares of Preferred
Stock into Class A Shares and shall take all action required to increase the
authorized number of shares of Class A Shares if at any time there shall be
insufficient authorized but unissued shares of Class A Shares to permit such
reservation or to permit the conversion of all outstanding shares of
Preferred Stock.
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8.5. PROCEDURE. In order to exercise the conversion right, the
holder of each share of Preferred Stock to be converted shall surrender the
certificate representing such share, duly endorsed or assigned to the Company
or in blank, at the office of the Company, accompanied by written notice that
the holder thereof elects to convert Preferred Stock or a specified portion
thereof. Unless the shares issuable on conversion are to be issued in the
same name as the name in which such share of Preferred Stock is registered,
each share surrendered for conversion shall be accompanied by instruments of
transfer, in form satisfactory to the Company, duly executed by the holder or
such holder's duly authorized attorney-in-fact. As promptly as practicable
after the surrender of certificates for shares of Preferred Stock, the
Company shall issue and shall deliver to such holder a certificate or
certificates for the number of full shares of Class A Shares issuable upon
the conversion of such shares in accordance with the provisions of this
Section 8. Each conversion shall be deemed to have been effected immediately
prior to the close of business on the date of which the certificates for
shares of Preferred Stock shall have been surrendered and such notice
received as aforesaid.
8.6. VOTING RIGHTS. The holders of the Preferred Stock shall have
one vote for each Class A Shares-equivalent share and shall vote with holders
of the Common Shares (as a single voting group) on all matters brought before
the shareholders, except as otherwise required by law or these Articles of
Incorporation.
8.7. REDEMPTION RIGHTS. The holders of a majority of the outstanding
shares of Preferred Stock may elect, at any time and from time to time on and
after October 1, 2007, to have the Company redeem all then outstanding
Preferred Stock at $12.50 per share (as adjusted for any stock dividends,
combinations or splits with respect to the Preferred Stock), plus all
cumulative and unpaid dividends and any declared, but unpaid, dividends. The
Company may also elect to redeem any or all of such shares on the same basis.
If the Company elects to redeem less than all such shares, it shall do so on
a prorata basis among the holders of such shares.
8.8. NO REISSUANCE. All shares of Preferred Stock redeemed or
converted pursuant to this Section 8 shall be canceled, shall not be reissued
and shall be eliminated from the shares which the Company is authorized to
issue.
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ARTICLE IX
The Corporation reserves the right to amend or repeal any provisions
contained in these Amended and Restated Articles of Incorporation from time
to time and at any time in the manner now or hereafter prescribed in these
Amended and Restated Articles of Incorporation and by the laws of the State
of Colorado, and all rights herein conferred upon shareholders are granted
subject to such reservation.
ARTICLE X
Any action proposed to be taken by the shareholders which, but for
this Article X, would require a greater vote under the Colorado Business
Corporation Act, as amended from time to time, may be taken by a majority of
the votes to which the then outstanding shares, or any class or series
thereof, are entitled.
ARTICLE XI
The business and affairs of the Corporation shall be managed by a
Board of Directors, the members of which shall be elected at the annual
meeting of the shareholders, or at a special meeting called for that purpose.
The number of directors shall be as stated in the Corporation's Bylaws and
the number of directors may be increased or decreased from time to time in
the manner provided in the Bylaws of the Corporation, but no decrease shall
have the effect of shortening the term of any incumbent director.
ARTICLE XII
Shareholders of the Corporation shall not have cumulative voting
rights.
ARTICLE XIII
The following provisions are inserted for the management of the
business and for the conduct of the affairs of the Corporation, and the same
are in furtherance of and not in limitation or exclusion of the powers
conferred by law.
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13.1. CONFLICTING INTEREST TRANSACTIONS. As used in this paragraph,
"conflicting interest transaction" means any of the following: (i) a loan or
other assistance by the Corporation to a director of the Corporation or to an
entity in which a director of the Corporation is a director or officer or has
a financial interest; (ii) a guaranty by the Corporation of an obligation of
a director of the Corporation or of an obligation of an entity in which a
director of the Corporation is a director or officer or has a financial
interest; or (iii) a contract or transaction between the Corporation and a
director of the Corporation or between the Corporation and an entity in which
a director of the Corporation is a director or officer or has a financial
interest. No conflicting interest transaction shall be void or voidable, be
enjoined, be set aside, or give rise to an award of damages or other
sanctions in a proceeding by a shareholder or by or in the right of the
Corporation, solely because the conflicting interest transaction involves a
director of the Corporation or any entity in which a director of the
Corporation is a director or officer or has a financial interest, or solely
because the director is present at or participates in the meeting of the
Corporation's board of directors or of the committee of the board of
directors which authorizes, approves or ratifies a conflicting interest
transaction, or solely because the director's vote is counted for such
purpose, so long as such transaction satisfies one or more of the conditions
set forth in Section 7-108-501(2) of the Colorado Business Corporation Act.
Common or interested directors may be counted in determining the presence of
a quorum at a meeting of the board of directors or of a committee which
authorizes, approves or ratifies the conflicting interest transaction.
13.2. INDEMNIFICATION. The Corporation shall indemnify, to the
maximum extent permitted by law, any person who is or was a director,
officer, agent, fiduciary or employee of the Corporation against any claim,
liability or expense arising against or incurred by such person made party to
a proceeding because he or she is or was a director, officer, agent,
fiduciary or employee of the Corporation or because he or she is or was
serving another entity as a director, officer, partner, trustee, employee,
fiduciary or agent at the Corporation's request. The Corporation shall
further have the authority to the maximum extent permitted by law to purchase
and maintain insurance providing such indemnification.
13.3. LIMITATION OF DIRECTOR'S LIABILITY. No director of the
Corporation shall have any personal liability for monetary damages to the
Corporation or its shareholders for breach of his or her fiduciary duty as a
director, except that this provision shall not eliminate or limit the
personal liability of a director to the Corporation or its shareholders for
monetary damages for: (i) any breach of the
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directors' duty of loyalty to the Corporation or its shareholders; (ii) acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) voting for or assenting to a distribution in
violation of Section 7-106-401 of the Colorado Business Corporation Act or
the articles of incorporation if it is established that the director did not
perform his or her duties in compliance with Section 7-108-401 of the
Colorado Business Corporation Act, provided that the personal liability of a
director in this circumstance shall be limited to the amount of the
distribution which exceeds what could have been distributed without violation
of Section 7-106-401 of the Colorado Business Corporation Act or the articles
of incorporation; or (iv) any transaction from which the director directly or
indirectly derives an improper personal benefit. If the Colorado Business
Corporation Act hereafter is amended to eliminate or limit further the
liability of a director, then, in addition to the elimination and limitation
of liability provided by the preceding sentence, the liability of each
director shall be eliminated or limited to the fullest extent permitted by
the Colorado Business Corporation Act as so amended. Nothing contained herein
will be construed to deprive any director of his or her right to all defenses
ordinarily available to a director nor will anything herein be construed to
deprive any director of any right he or she may have for contribution from
any other director or other person.
13.4. NEGATION OF EQUITABLE INTERESTS IN SHARES OR RIGHTS. Unless a
person is recognized as a shareholder through procedures established by the
Corporation pursuant to Section 7-107-204 of the Colorado Business
Corporation Act or any similar law, the Corporation shall be entitled to
treat the registered holder of any shares of the Corporation as the owner
thereof for all purposes permitted by the Colorado Business Corporation Act,
including without limitation all rights deriving from such shares, and the
Corporation shall not be bound to recognize any equitable or other claim to,
or interest in, such shares or rights deriving from such shares on the part
of any other persons, including without limitation a purchaser, assignee or
transferee of such shares, unless and until such other person becomes the
registered holder of such shares or is recognized as such, whether or not the
Corporation shall have either actual or constructive notice of the claimed
interest of such other person.
Executed this 27th day of January, 2000.
/s/ Lorri Ellis
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Lorri Ellis
Corporate Secretary
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I hereby consent to my appointment as the registered agent for Jones
International Networks, Ltd.
/s/ Lorri Ellis
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Lorri Ellis
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