RESTATED
ARTICLES
OF INCORPORATION
OF
YP
CORP.
1. Name.
The name of the corporation is YP Corp. (the “Corporation”).
2. Capital
Stock.
The Corporation is authorized to issue two classes of stock. One class of
stock
shall be Common Stock, par value, $0.001. The second class of stock shall
be
Preferred Stock, par value $0.001. This Corporation is authorized to issue
100,000,000 shares of Common Stock and 5,000,000 shares of Preferred
Stock.
2.1. Common
Stock.
Each share of Common Stock issued and outstanding shall be entitled to one
vote
on all matters. Shares of such Common Stock may be issued for such consideration
and for such corporate purposes as the Board of Directors may from time to
time
determine. Fully paid shares of Common Stock of this Corporation shall not
be
liable to any further call or assessment. Dividends may be declared and paid
on
the Common Stock only out of funds legally available therefore. Upon the
sale of
substantially all of the stock or assets of the Corporation in a non-public
transaction or dissolution, liquidation, or winding up of the Corporation,
whether voluntary or involuntary, after all liquidation preferences payable
to
any series of Preferred Stock entitled thereto have been satisfied, the
remaining net assets of the Corporation shall be distributed to the holders
of
Common Stock and any similarly situated stockholders who are not entitled
to any
liquidation preference (or, if there be an insufficient amount to pay all
such
stockholders, then ratably among such holders).
2.2. Preferred
Stock.
(a) The
Preferred Stock not so specifically designated may be designated in the future
by action of the Board of Directors of the Corporation and otherwise in
accordance with the applicable provisions of the NRS. The designated series
of
Preferred Stock shall have such powers, designations, preferences and relative,
participating or optional or other special rights and qualifications,
limitations or restrictions thereof as shall be expressed in the resolution
or
resolutions providing for the issue of such stock adopted by the Corporation’s
Board of Directors and may be made dependent upon facts ascertainable outside
such resolution or resolutions of the Board of Directors, provided that the
manner in which such facts shall operate upon such powers, designations,
preferences, rights and qualifications, limitations or restrictions of such
class or series of stock is clearly and expressly set forth in the resolution
or
resolutions providing for the issuance of such stock by the Board of Directors.
(b) The
shares of each class or series of the Preferred Stock may vary from the shares
of any other class or series thereof in any respect. The Board of Directors
may
increase the number of shares of the Preferred Stock designated for any existing
class or series by a resolution adding to such class or series authorized
and
unissued shares of the Preferred Stock not designated for any other class
or
series. The Board of Directors may decrease the number of shares of the
Preferred Stock designated for any existing class of series of the Preferred
Stock and the shares so subtracted shall become authorized, unissued and
undesignated shares of the Preferred Stock.
3. Designation
and Amount of Series E Convertible Preferred Stock.
In accordance with the foregoing Section
2.2,
the
Corporation has authorized a series of Preferred Stock, which shall be
designated as Series E Convertible Preferred Stock (the “Series E Preferred
Convertible Stock”). The number of shares constituting the Series E Preferred
Stock shall be 200,000, par value $0.001. The Series E Preferred Stock has
the
voting powers, preferences, relative, participating, limitations,
qualifications, optional and other special rights and the qualifications,
limitations and restrictions thereof that are set forth below.
3.1. Dividends.
(a) The
holders of outstanding shares of Series E Convertible Preferred Stock shall
be
equally entitled to receive preferential dividends in cash out of any funds
of
the Corporation legally available at the time for declaration of dividends,
at
the dividend rates applicable to each such series, as set forth herein, before
any dividend or other distribution will be paid or declared and set apart
for
payment on any shares of any Common Stock, or other class of stock presently
authorized or to be authorized (the Common Stock, and such other stock being
hereinafter collectively the “Junior Stock”) as follows: Series E Convertible
Preferred Stock shall receive dividends at the rate of 5% per annum on the
liquidation preference per shares, payable each March 31, June 30, September
30
and December 31, commencing with the first such date following the issuance
of
such stock. Dividends shall accumulate from the date of issuance, until the
first payment date, at which time all accumulated dividends and dividends
from
the date of issuance shall be paid if funds are legally available at such
time.
If funds are not legally available at such time, dividends shall continue
to
accumulate until they can be paid from legally available funds.
(b) The
dividends on the Series E Convertible Preferred Stock at the rate provided
above
shall be cumulative whether or not earned so that, if at any time full
cumulative dividends at the rate aforesaid on all shares of the Series E
Convertible Preferred Stock then outstanding from the date from and after
which
dividends thereon are cumulative to the end of the quarterly dividend period
next preceding such time shall not have been paid or declared and set apart
for
payment, or if the full dividend on all such outstanding Series E Convertible
Preferred Stock for the then current dividend period shall not have been
paid or
declared and set apart for payment (but without interest thereon) before
any sum
shall be set apart for or applied by the Corporation or a subsidiary of the
Corporation to the purchase, redemption or other acquisition of any shares
of
any other class of stock ranking on a parity with the Series E Convertible
Preferred Stock (“Parity Stock”) and before any dividend or other distribution
shall be paid or declared and set apart for payment on any Junior Stock and
before any sum shall be set aside for or applied to the purchase, redemption
or
other acquisition of Junior Stock.
(c) Dividends
on all shares of the Series E Convertible Preferred Stock shall begin to
accrue
and be cumulative from and after the date of issuance thereof. A dividend
period
shall be deemed to commence on the day following a quarterly dividend payment
date herein specified and to end on the next succeeding quarterly dividend
payment date herein specified.
3.2. Liquidation
Preference.
Upon the sale of substantially all of the stock or assets of the
Corporation in a non-public transaction or dissolution, liquidation, or winding
up of the Corporation, whether voluntary or involuntary, the holders of the
Series E Convertible Preferred Stock shall be entitled to receive out of
the
assets of the Corporation, before any distribution or payment is made upon
the
Common Stock or any other series or Preferred Stock, an amount in cash equal
to
$.30 per share, plus any accrued but unpaid dividends (or, if there be an
insufficient amount to pay all Series E Convertible Preferred Stockholders,
then
ratably among such holders).
3.3. Voting
Rights.
The holders of shares of Series E Convertible Preferred Stock shall have
no
voting rights, except as required by law.
3.4. Conversion
of Series E Convertible Preferred Stock.
(a) Holder’s
Right to Convert.
(i) Conversion.
The
record Holder of the Series E Convertible Preferred Stock shall be entitled,
after two years from the initial issuance of the Series E Convertible Preferred
Stock and from time to time thereafter, at the office of the Corporation
or any
transfer agent for the Series E Convertible Preferred Stock, to convert all
or
portions of the Series E Convertible Preferred Stock held by such Holder,
on a
one for one basis into shares of the Common Stock, together with payment
by the
holder of $.045 per converted share.
(ii) Mechanics
of Conversion.
(1) In
order
to convert Series E Convertible Preferred Stock into full shares of Common
Stock, the holder shall (i) transmit a facsimile copy of the fully executed
notice of conversion in the form provided by the Corporation (“Notice of
Conversion”) to the Corporation, which notice shall specify the number of shares
of Series E Convertible Preferred Stock to be converted, prior to midnight,
New
York City time (the “Conversion Notice Deadline”), on the date of conversion
specified on the Notice of Conversion, and (ii) promptly surrender the original
certificate or certificates therefor, duly endorsed, and deliver the original
Notice of Conversion by either overnight courier or 2-day courier, to the
office
of the Corporation or of any transfer agent for the Series E Convertible
Preferred Stock, together with payment by certified or bank check for $.045
per
converted share; provided, however, that the Corporation shall not be obligated
to issue certificates evidencing such Series E Convertible Preferred Stock
unless either the certificates evidencing such Series E. Convertible Preferred
Stock are delivered to the Corporation or its transfer agent as provided
above
or the Holder notifies the Corporation or its transfer agent that such
certificates have been lost, stolen or destroyed. Upon receipt by the
Corporation of evidence of the loss, theft, destruction or mutilation of
the
certificate or certificates (“Stock Certificates”) representing shares of Series
E Convertible Preferred Stock and (in the case of loss, theft or destruction)
of
indemnity or security reasonably satisfactory to the Corporation, and upon
surrender and cancellation of the Stock Certificate(s), if mutilated, the
Corporation shall execute and deliver new Stock Certificate(s) of like tenor
and
date. No fractional shares of Common Stock shall be issued upon conversion
of
the Series E Convertible Preferred Stock. In lieu of any fractional share
to
which the Holder would otherwise be entitled, the Corporation shall pay cash
to
such Holder in an amount equal to such fraction multiplied by the value of
the
Common Stock as determined in good faith by the Corporation’s Board of
Directors. In the case of a dispute as to the calculation of the Conversion
Price, the Corporation’s calculation shall be deemed conclusive absent manifest
error.
(2) The
Corporation shall issue and deliver at the address of the Holder on the books
of
the Corporation (i) a certificate or certificates for the number of shares
of
Common Stock equal to the Conversion Number for the shares of Series E
Convertible Preferred Stock being so converted and (ii) a certificate
representing the balance of the shares of Series E Convertible Preferred
Stock
not so converted, if any. The date on which conversion occurs (the “Date of
Conversion”) shall be deemed to be the date set forth in such Notice of
Conversion, provided that the copy of the Notice of Conversion is faxed to
the
Corporation before midnight, New York City time, on the Date of Conversion.
The
person or persons entitled to receive the shares of Common Stock issuable
upon
such conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock on such date.
(b) Adjustment
to Conversion.
(i) If,
prior
to the conversion of all Series E Convertible Preferred Stock, there shall
be
any merger, consolidation, exchange of shares, recapitalization, reorganization
or other similar event, as a result of which shares of Common Stock of the
Corporation shall be changed into the same or a different number of shares
of
the same or another class or classes of stock or securities of the Corporation
or another entity, then the holders of Series E Convertible Preferred Stock
shall thereafter have the right to purchase and receive upon conversion of
Series E Convertible Preferred Stock, upon the basis and upon the terms and
conditions specified herein and in lieu of the shares of Common Stock
immediately theretofore issuable upon conversion, such shares of stock and/or
securities as may be issued or payable with respect to or in exchange for
the
number of shares of Common Stock immediately theretofore purchasable and
receivable upon the conversion of Series E Convertible Preferred Stock held
by
such holders had such merger, consolidation, exchange of shares,
recapitalization or reorganization not taken place, and in any such case,
appropriate provisions shall be made with respect to the rights and interests
of
the Holders of the Series E Convertible Preferred Stock to the end that the
provisions hereof (including, without limitation, provisions for adjustment
of
the number of shares issuable upon conversion of the Series E Convertible
Preferred Stock otherwise set forth in this Section (b)) shall thereafter
be
applicable, as nearly as may be practicable, in relation to any shares of
stock
or securities thereafter deliverable upon the exercise hereof. The Corporation
shall not effect any transaction described herein unless the resulting successor
or acquiring entity (if not the Corporation) assumes by written instrument
the
obligation to deliver to the holders of the Series E Convertible Preferred
Stock
such shares of stock and/or securities as, in accordance with the foregoing
provisions, the holders of the Series E Convertible Preferred Stock may be
entitled to purchase.
(ii) If
any
adjustment under this section would create a fractional share of Common Stock
or
a right to acquire a fractional share of Common Stock, such fractional shares
shall be disregarded, and the number of shares of Common Stock issuable upon
conversion shall be the next higher number of shares.
4. Perpetual
Existence.
The existence of the Corporation will be perpetual.
5. Board
of Directors.
The affairs of the Corporation shall be governed by a Board of Directors.
Subject to any rights to elect directors (“Preferred Stock Directors”) granted
to the holders of any series of Preferred Stock as set forth in the Certificate
of Designation for such series or class of Preferred Stock, the number of
persons to serve on the Board of Directors, and the number of directors in
each
class of directors, shall be fixed as set forth in the Bylaws and such number
may be increased or decreased from time to time in such manner as provided
by
the Bylaws, but the number of directors shall never be less than three.
Directors of the Corporation need not be residents of the State of Nevada
and
need not own shares of the Corporation's stock.
5.1. Terms
of Directors.
Beginning with the Corporation’s annual meeting of stockholders to be held in
2007, the directors shall be elected for terms lasting until the next annual
meeting of stockholders following their election, and until their successors
are
elected and qualified, subject to their earlier death, resignation or removal
from the board of directors.
5.2. Removal
of Directors.
Notwithstanding any other provision of these Amended and Restated Articles
of Incorporation or the Bylaws of the Corporation, any director of the
corporation may be removed at any time, but only for cause and only by the
affirmative vote of the holders of at least 66 2/3% of the voting power of
the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (considered for this purpose as one
class) cast at a meeting of the stockholders called for that purpose.
Notwithstanding the foregoing, whenever the holders of any one or more series
of
preferred stock of the Corporation shall have the right, voting separately
as a
class, to elect one or more directors of the Corporation, the preceding
provisions of this Article 5 shall not apply with respect to the director
or
directors elected by such holders of preferred stock.
6. Action
by Written Consent.
No action that is required or permitted to be taken by the stockholders of
the Corporation at any annual or special meeting of stockholders may be effected
by written consent of stockholders in lieu of a meeting of stockholders,
unless
the action to be effected by written consent of stockholders and the taking
of
such action by such written consent have expressly been approved in advance
by
the Board of Directors of the Corporation.
7. Cumulative
Voting.
There shall be no cumulative voting by stockholders of any class or series
in
the election of directors of the Corporation.
8. Distributions
to Stockholders.
Except as set forth in these Amended and Restated Articles or the Certificate
of
Designations for any series or class of Preferred Stock, the Board of Directors
of the Corporation may, from time to time, distribute to its stockholders
a
portion of its assets in cash or property, whether or not the distribution,
after giving it effect, would cause the Corporation’s total assets to be less
than the sum of the total liabilities plus the amount that would be needed,
if
dissolution were to occur at the time of distribution, to satisfy the
preferential rights upon dissolution of stockholders whose preferential rights
are superior to those receiving the distribution. The Board of Directors
may
base a determination that a distribution is permitted hereunder on (i) financial
statements prepared on the basis of accounting practices that are reasonable
under the circumstances; (ii) a fair valuation, including, but not limited
to,
unrealized appreciation and depreciation; or (iii) any other method that
is
reasonable in the circumstances.
9. Director
and Officer Liability.
A
director and officer of the Corporation shall not be personally liable to
the
Corporation or its stockholders for damages for breach of fiduciary duty
as a
director or officer, except for liability (i) for acts or omissions that
involve
intentional misconduct, fraud or a knowing violation of law, or (ii) for
authorizing any distribution in violation of Section 78.300 of the NRS. If
the
NRS is amended after approval by the stockholders of this Article to authorize
corporate action further eliminating the personal liability of directors
or
officers, then the liability of a director or officer of the Corporation
shall
be eliminated or limited to the fullest extent permitted by the NRS, as so
amended. Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director or officer of the Corporation existing at the time
of
such repeal or modification. No amendment to the NRS that further limits
the
acts, omissions or transactions for which elimination or limitation of liability
is permitted shall affect the liability of a director or officer for any
act,
omission or transaction which occurs prior to the effective date of such
amendment.
10. Indemnification.
The Corporation shall, to the fullest extent permitted by Section 78.75 of
the
NRS, as the same may be amended, supplemented or replaced from time to time,
indemnify any and all persons whom it shall have power to indemnify under
said
section from and against any and all of the expenses, liabilities or other
matters referred to in or covered by said section, and the indemnification
provided for herein shall not be deemed exclusive of any other rights to
which
those indemnified may be entitled under any Bylaw, agreement, vote of
stockholders or disinterested directors or otherwise, both as to action in
his
official capacity and as to action in another capacity while holding such
office, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person. Pursuant to said Section 78.751
of the NRS, the expenses of officers and directors incurred in defending
a civil
or criminal action, suit or proceeding must be paid by the Corporation as
they
are incurred and in advance of the final disposition of the action, suit
or
proceeding, upon receipt of an undertaking by or on behalf of the director
or
officer to repay the amount if it is ultimately determined by a court of
competent jurisdiction that he is not entitled to be indemnified by the
Corporation.
11. Amendment
of Articles of Incorporation.
Subject to the provisions hereof, the Corporation reserves the right to repeal,
alter, amend or rescind any provision contained in these Restated Articles
in
the manner now or hereafter prescribed by law, and all rights conferred on
stockholders herein are granted subject to this reservation. Notwithstanding
the
foregoing at any time and from time to time, the provisions set forth in
Article
5 (Classified Board) and Article 6 (Action by Written Consent) may be repealed,
altered, amended or rescinded in any respect only if the same is approved
by the
affirmative vote of the holders of not less than 66 2/3% of the voting
power of the outstanding shares of capital stock of the Corporation entitled
to
vote generally in the election of directors (considered for this purpose
as a
single class) cast at a meeting of the stockholders called for that purpose
(provided that notice of such proposed adoption, repeal, alteration, amendment
or rescission is included in the notice of such meeting).
IN
WITNESS WHEREOF, the undersigned President and Chief Executive Officer has
executed these Restated Articles as of December 11, 2006.
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YP
CORP., a Nevada corporation
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/s/
Daniel L. Coury, Sr.
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Daniel
L. Coury, Sr.
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President
and Chief Executive Officer
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