**Exhibit 3.1**

 

**RESTATED ARTICLES**

**OF INCORPORATION**

**OF**

**K-TELINTERNATIONAL, INC.**

 

**ARTICLEI**

 

**NAME**

 

The name of this Corporation is:  K-tel International, Inc.

 

**ARTICLE II**

 

**REGISTERED OFFICE**

 

The registered office of this Corporation is locatedat 11311 K-tel Drive, Minnetonka, County of Hennepin, Minnesota 55343.

 

**ARTICLEIII**

 

**AUTHORIZED CAPITAL STOCK**

 

The authorized capital stock of this Corporation shallbe 7,500,000 shares of Common Stock with a par value of one cent ($.01) pershare (the “Common Stock”) and 4,000,000 shares of preferred stock (the“Preferred Stock”) in one or more series, with par value to be determined bythe Board of Directors as specified below. Each share of Preferred Stock shall have such par value and shallentitle the holder thereof to such rights, voting power, dividends, redemptionrights or privileges, rights on liquidation or dissolution, conversion rightsand privileges, sinking or purchase fund rights and other preferences,privileges and restrictions as may be fixed by the Board of Directors byresolution thereof filed in accordance with Chapter 302A of the MinnesotaStatutes.  This Corporation shall notissue nonvoting capital stock.

 

**ARTICLEIV**

 

**CUMULATIVE VOTING RIGHTS**

 

The stockholders of this Corporation shall not havecumulative voting rights.

 

**ARTICLE V**

 

**PREEMPTIVE RIGHTS**

 

No stockholder of this Corporation shall have anypreemptive rights to subscribe for, purchase or acquire any shares of theCorporation, whether unissued or now or hereafter authorized, or any obligationsor other securities convertible into or exchangeable for any such shares.

 

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**ARTICLEVI**

 

**STOCKHOLDER ACTIONS**

 

                The affirmativevote of the holders of a majority of the voting power of the shares representedand voting at a duly held meeting of the stockholders of this Corporation isrequired for an action of the stockholders, except where Minnesota StatutesSection 302A requires the affirmative vote of a majority of the voting power ofall voting shares.

 

**ARTICLEVII**

 

**VOTE REQUIRED FOR CERTAIN BUSINESS COMBINATIONS**

 

(a)               Forpurposes of this Article VII:

 

(i)                           “Affiliate”and “beneficial owner” are used herein as defined in Rule 12b-2 and Rule 13d-3,respectively, under the Securities Exchange Act of 1934 (“1934 Act”) as ineffect on the effective date (the “Effective Date”) of the Corporation’sAmended Plan of Reorganization (“Plan”). The term “Affiliate” as used herein shall exclude the Corporation, butshall include the definition of “Associate” as contained in said Rule 12b-2.

 

(ii)                        A“Control Stockholder” is a Person other than the Corporation who is(A) the beneficial owner of 10% or more of the stock of the Corporationentitled to vote for the election of directors (“Voting Stock”), or (B) anAffiliate of the Corporation and (1) at any time within a two - year periodprior to the record date to vote on a Business Combination was the beneficialowner of ten percent or more of the Voting Stock, or (2) at the completion ofthe Business Combination will be the beneficial owner of ten percent or more ofthe Voting Stock. For purposes of this Article VII, Philip Kives shall not beconsidered a Control Stockholder unless he, as a Person (as defined under thisArticle), holds more than 50% of the Voting Stock.

 

(iii)                     A “person” is a natural person ora legal entity of any kind, together with any Affiliate of such person orentity, or any person or entity with whom such person, entity or an Affiliatehas any agreement or understanding relating to acquiring, voting or holdingVoting Stock.

 

(iv)                    A“Disinterested Director” is a member of the Board of Directors of theCorporation (other than the Control Stockholder) who was a director prior tothe time the Control Stockholder became a Control Stockholder, or any directorwho was recommended for election by the Disinterested Director; provided,however, that if the Business Combination has a Control Stockholder as a partywho was a Control Stockholder on the Effective Date, then a “DisinterestedDirector” shall include any director who was not appointed by such ControlStockholder or its affiliates under the Plan.

 

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(v)                       A“Business Combination” is (A) a merger or consolidation of the Corporation orany of its subsidiaries with a Control Stockholder; or (B) the sale, lease,exchange, pledge, transfer or other disposition by the Corporation or any ofits subsidiaries of all or a Substantial Part of the Corporation’s Assets to aControl Stockholder for less than the fair market value of such assets asdetermined by the Disinterested Directors.

 

(vi)                    A“Substantial Part of the Corporation’s Assets” shall mean assets of theCorporation or any of its subsidiaries in an amount equal to 50% or more of thefair market value, as determined by the Disinterested Directors, of the totalconsolidated assets of the Corporation and its subsidiaries taken as a whole asof the end of its most recent fiscal year ended prior to the time thedetermination is made.

 

(b)              Theaffirmative vote of not less than 51% of the stock of the Corporation entitledto vote for the election of directors (“Voting Stock”), excluding the VotingStock of a Control Stockholder who is a party to the Business Combination,shall be required for the adoption or authorization of a Business Combination,unless the Disinterested Directors determine that:

 

(i)                           Thefair market value of the consideration per share to be received or retained bythe holders of each class or series of stock of the Corporation in a BusinessCombination is equal to or greater than the consideration per share (includingbrokerage commissions and soliciting dealer’s fees) paid by such ControlStockholder in acquiring the largest number of shares of such class of stockpreviously acquired in any one transaction or series of related transactions, whetherbefore or after the Control Stockholder became a Control Stockholder; and

 

(ii)                        TheControl Stockholder shall not have received the benefit, directly or indirectly(except proportionately as a stockholder), of any loans, advances, guarantees,pledges or other financial assistance provided by the Corporation inanticipation of or in connection with such Business Combination.

 

For purposes of subparagraph (b)(i) hereof, theconsideration per share paid by the Investors, as defined under the Plan, shallbe the amount determined by dividing (A) the amount of cash invested in theCorporation, up to the record date to vote on the Business Combination, by theInvestors pursuant to Article IX.E.  ofthe Plan, by (B) 2,400,000.

 

(c)                                  Inthe event any vote of holders of Voting Stock is required for the adoption orapproval of any Business Combination, a proxy or information statementdescribing the Business Combination and complying with the requirements of the1934 Act shall be mailed at a date determined by the Disinterested Directors toall stockholders of the Corporation whether or not such statement is requiredunder the 1934 Act.  The statement shallcontain any recommendations as to the advisability of the Business Combinationwhich the Disinterested Directors, or any of them, may choose to state and, ifdeemed advisable by the Disinterested Directors, an opinion of an investmentbanking firm as to the fairness of the terms of such Business Combination.  Such firm shall be selected by theDisinterested Directors and paid a fee for its services by the Corporation asapproved by the Disinterested Directors.

 

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**ARTICLEVIII**

 

**BOARD ACTION IN WRITING**

 

Any action required or permitted to be taken at ameeting of the Board of Directors of this Corporation not needing approval bythe stockholders under Minnesota Statutes, Section 302A, may be taken bywritten action signed by the number of directors that would be required to takesuch action at a meeting of the Board of Directors at which all directors werepresent.

 

 
|               | K-TEL  INTERNATIONAL, INC. |
|--------------------|----------------------------|
|               |                       |
|               |                       |
|               | By                         | /s/ Mickey  Elfenbein |   |
|               | Its                        | Executive Vice  President and Secretary |   |
|               |                       |
|               |                       |
| STATE OF MINNESOTA | )                          |   |   |   |
|               | )                          | ss: |   |   |
| COUNTY OF HENNEPIN | )                          |   |   |   |
|                    |                            |  |  |  |  |  |  |

 

 

I, the undersigned, a Notary Public in and for theState and County aforesaid, do hereby certify that on this 25th day of October,1985, personally appeared before me Mickey Elfenbein, who being by me firstduly sworn, declared that he is the Executive Vice President and Secretary ofK-tel International, Inc.; that he signed the foregoing instrument as saidofficer of said corporation; and that the statements contained therein aretrue.

 
|   |   | By                                  | /s/ Barbara A.  Sawina |   |
|--------|--------|-------------------------------------|------------------------|--------|
|   |   | Notary Public                       |
|   |   | My Commission  Expires Dec. 5, 1990 |

 

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**MODIFICATION OFSTATUTORY REQUIREMENTSOR AMENDMENT OF ARTICLES**

** **

CorporateName:  K-tel International, Inc.

 

Dateof Adoption of Amendments/Modifications: December 8, 1987

 

Amendments/ModificationsApproved by Corporate:  Shareholders

 

Pursuant to the provisions of Minnesota Statute302A.135, the following amendments of articles or modifications to thestatutory requirements regulating the above corporation were adopted:

 

“**ARTICLE IX**

 

**LIMITATIONON LIABILITY OF DIRECTORS**

 

No director of the corporation shall be personallyliable to the corporation or its shareholders for monetary damages for breachof fiduciary duty as a director; provided that this Article shall not eliminateor limit the liability of a director to the extent provided by applicable law(i) for any breach of the director’s duty of loyalty to the corporation or itsshareholders, (ii) for acts or omissions not in good faith or that involveintentional misconduct or a knowing violation of law, (iii) under Section302A.559 or 80A.23, Minnesota Statutes, (iv) for any transaction from which thedirector derived any improper personal benefit, or (v) for any act or omissionoccurring prior to the effective date of this Article.  No amendment to or repeal of this Articleshall apply to or have any effect on the liability or alleged liability of anydirector of the corporation for or with respect to any acts or omissions ofsuch director occurring prior to such amendment or repeal.”

 

I swear that the foregoing is true and accurate andthat I have the authority to sign this document on behalf of the corporation.

 
|               |   | Signed:   | /s/ Mickey  Elfenbein                   |
|--------------------|--------|-----------|-----------------------------------------|
|               |   |      | Mickey Elfenbein                        |
|               |   | Position: | Executive Vice President  and Secretary |   |
|               |   |      |
|               |   |      |
| STATE OF MINNESOTA | )      |      |                                    |
|               | )      | ss.       |                                    |
| COUNTY OF HENNEPIN | )      |      |                                    |
|                    |        |           |                                         |  |  |  |  |

 

The foregoing instrument was acknowledged before me onthis 21st day of April, 1988.

 
|   | /s/ Darlene O.  Parpart |   |
|--------|-------------------------|--------|
|   | Notary Public           |

 

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**K-TELINTERNATIONAL, INC.ARTICLES OF AMENDMENTINCIDENT TO STOCK SPLIT BYBOARD OF DIRECTORS**

** **

The undersigned, David Weiner, President of K-telInternational, Inc., a Minnesota corporation (the “Company”), hereby certifies:

 

1.                                       ArticleIII of the Company’s Articles of Incorporation has been amended to read in itsentirety as follows:

 

ARTICLE III

 

Theauthorized capital stock of this Corporation shall be 15,000,000 shares ofCommon Stock with a par value of one cent ($.01) per share (the “Common Stock”)and 4,000,000 shares of preferred stock (the “Preferred Stock) in one or moreseries, with par value to be determined by the Board of Directors as specifiedbelow.  Each share of Preferred Stockshall have such par value and shall entitle the holder thereof to such rights,voting power, dividends, redemption rights or privileges, rights on liquidationor dissolution, conversion rights and privileges, sinking or purchase fundrights and other preferences, privileges and restrictions as may be fixed bythe Board of Directors by resolution thereof filed in accordance with Chapter302A of the Minnesota Statutes.  ThisCorporation shall not issue nonvoting common stock.

 

2.                                       Suchamendment (i) has been adopted in accordance with the requirements of, andpursuant to, Chapter 302A of the Minnesota Statutes, (ii) was adopted pursuantto Section 302A.402 of the Minnesota Statutes in connection with a division ofthe Company’s Common Stock; and (iii) will not adversely affect the rights orpreferences of the holders of outstanding shares of any class or series of theCompany and will not result in the percentage of authorized shares that remainsunissued after such division exceeding the percentage of authorized shares thatwere unissued before the division.

 

3.                                       Thedivision giving rise to the amendment set forth above concerns a two for onesplit of the Common Stock of the Company in the form of a stock dividend.  Such division is being effected as follows:

 

(a)                                 onthe date these Articles of Amendment are filed with the Secretary of State ofthe State of Minnesota (the “Effective Date”), each share of Common Stock thenoutstanding will be split and converted into two (2) shares of Common Stock ofthe Company (the “Stock Split”); and

 

(b)                                assoon as practicable after the Effective Date, the Company’s transfer agent andregistrar will sign and register a certificate or certificates representing oneshare of the authorized but unissued Common Stock of the Company for everyshare of Common Stock held of record by each common stockholder of record as ofthe Effective Date (without giving effect to the Stock Split), and will deliveror mail such certificates to each holder.

 

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INWITNESS WHEREOF, I have subscribed my name this 1st day of May,1998.

 

 
|   | /s/ David Weiner |
|--------|------------------|
|   | David Weiner     |
|   | President        |

 

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**ARTICLES OFAMENDMENT**

**TO THE AMENDED ANDRESTATED**

**ARTICLES OFINCORPORATION OF**

**K-TELINTERNATIONAL, INC.**

** **

**THEUNDERSIGNED**, Steven A. Kahn, the Chief Financial Officer ofK-tel International, Inc., a Minnesota corporation (the “Corporation”), for thepurposes of amending the Corporation’s Amended and Restated Articles of Incorporation under the provisions ofMinnesota Statutes, Section 302A.135, hereby states that:

 

**FIRST:****                               **Thename of the Corporation is K-tel International, Inc.

 

**SECOND:****               **Article III ofthe Amended and Restated Articles of Incorporation is hereby amended to read inits entirety as follows:

 

**ARTICLE III**

** **

The authorized capital stock of this Corporation shallbe 50,000,000 shares of Common Stock with a par value of one cent ($.01) pershare (the “Common Stock”) and 4,000,000 shares of preferred stock (the“Preferred Stock”) in one or more series, with par value to be determined bythe Board of Directors as specified below. Each share of Preferred Stock shallhave such par value and shall entitle the holder thereof to such rights, votingpower, dividends, redemption rights or privileges, rights on liquidation ordissolution, conversion rights and privileges and restrictions as may be fixedby the Board of Directors by resolution thereof filed in accordance withChapter 302A of the Minnesota Statutes. This Corporation shall not issuenonvoting common stock.

 

**THIRD:****                            **ThisArticle of Amendment to the Amended and Restated Articles of Incorporation ofthe Corporation was approved by the Board of Directors at a Special Meeting ofthe Board of Directors on November 10, 1999, and by the shareholders of theCorporation at their Annual Meeting on January 14, 2000.

 

**FOURTH:****                **In additionto the foregoing, the Amendment set forth herein has been adopted pursuant toMinnesota Statutes, Chapter 302A.

 

**INWITNESS WHEREOF**, the undersigned has executed these Articlesof Amendment to the Amended and Restated Articles of Incorporation inMinneapolis, Minnesota on February 17, 2000.

 
|   | K-tel International, Inc.:    |
|--------|-------------------------------|
|   |                          |
|   | By:                           | /s/  Steven A. Kahn |   |
|   |                          | Steven  A. Kahn |
|   | Its: Chief Financial  Officer |

 

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**ARTICLES OF AMENDMENT**

**TO THE AMENDED ANDRESTATED**

**ARTICLES OFINCORPORATION OF**

**K-TELINTERNATIONAL, INC.**

** **

**THE UNDERSIGNED,** Kenneth P. Onstad,President of K-tel International, Inc., a Minnesota corporation (the“Corporation”), for the purposes of amending the Corporation’s Amended andRestated Articles of Incorporation under the provisions of Minnesota Statutes,Section 302A.135, hereby states that:

 

**FIRST:  **The name of theCorporation is K-tel International, Inc.

 

**SECOND:  **Article IXof the Amended and Restated Articles of Incorporation is hereby added to readin its entirety as follows:

 

**ARTICLE IX**

** **

**CONTROL SHAREACQUISITION ACT**

** **

Section 302A.671 of the Minnesota Statutes Annotated(entitled “Control Share Acquisition Act”) or any successor shall not apply tothis Corporation or its shareholders.

 

**THIRD:  **This Article of Amendmentto the Amended and Restated Articles of Incorporation of the Corporation wasapproved by the Board of Directors at a Meeting of the Board of Directors onOctober 20, 2000 and by the shareholders of the Corporation at their AnnualMeeting on November 30, 2000.

 

**FOURTH:  **In addition to theforegoing, the Amendment set forth herein has been adopted pursuant toMinnesota Statutes, Chapter 302A.

 

**IN WITNESS WHEREOF,** the undersigned hasexecuted these Articles of Amendment to the Amended and Restated Articles ofIncorporation in Minneapolis, Minnesota on December 22, 2000.

 
|   | K-tel  International, Inc. |
|--------|----------------------------|
|   |                       |
|   | By:                        | /s/ Kenneth P. Onstad |   |
|   |                       |  Kenneth P. Onstad |
|   |                       |  Its:   President |

 

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**AMENDMENT TOARTICLES OF INCORPORATION**

** **

**OF**

** **

**K-TELINTERNATIONAL, INC.**

** **

Pursuant to Minnesota Statutes, Chapter 302A, K-telInternational, Inc., a Minnesota corporation, (the “Corporation”), herebyadopts the following Amendment to its Articles of Incorporation.

 

1.                                       Thename of the Corporation is K-tel International, Inc.

 

The Articles of Incorporation of the Corporation arehereby amended by changing Article II thereof in its entirety and inserting thefollowing:

 

**ARTICLE II**

**REGISTERED OFFICE**

** **

The registered office of the Corporation is located at2655 Cheshire Lane North, Suite 100, Plymouth, MN 55447.

 

2.                                       Exceptas specifically provided herein, the Corporation’s Articles of Incorporationshall remain unamended and shall continue in full force and effect.

 

3.                                       Thisamendment to the Articles of Incorporation of the Corporation were unanimouslyapproved by the directors of the Corporation pursuant to Minnesota StatutesChapter 302A and the undersigned is authorized to execute same.

 

**INWITNESS WHEREOF**, the undersigned has executed this Amendmentto the Articles of Incorporation on this 30th day of April, 2002.

 
|   | K-tel  International, Inc. |
|--------|----------------------------|
|   |                       |
|   | By:                        | /s/ Philip Kives |   |
|   |                       | Philip Kives,  Chief Executive Officer |
|        |                            |  |  |  |

 

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