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Exhibit 10.1  

 
 

IESI CORPORATION
  
  1999 Stock Option Plan
  As Amended March 17, 2003    
    

        1.    Purpose.    The purpose of the IESI Corporation 1999 Stock Option Plan (the "Plan") is to provide (i) key
employees of IESI Corporation (the "Company") and its subsidiaries, (ii) certain consultants and advisors who perform services for the Company or its subsidiaries, and (iii) members of
the Board of Directors of the Company (the "Board"), with the opportunity to acquire shares of the Class A Voting Common Stock of the Company ("Common Stock"). The Company believes that the
Plan will enhance the incentive for participants to contribute to the growth of the Company, thereby benefiting the Company and the Company's shareholders, and will align the economic interests of the
participants with those of the shareholders. 

        2.    Administration.    

        2.1    Committee.    The Plan shall be administered and interpreted by the Compensation Committee (the "Committee").
The Committee may consist of two or more members of the Board who are "outside directors" as defined under Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code") and
"non-employee directors" as defined under Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). 

        2.2    Authority of Committee.    The Committee has the sole authority, subject to the provisions of the Plan, to
(i) select the employees and other individuals to be granted options under the Plan ("Options"), (ii) determine the type, size and terms of the grant of Options to be made to each
individual selected, (iii) determine the time when Options will be granted and the duration of any applicable exercise period, including the criteria for exercisability and the acceleration of
exercisability and (iv) deal with any other matter arising under the Plan. The Committee is authorized to interpret the Plan and the Options granted under the Plan, to establish, amend and
rescind any rules and regulations relating to the Plan, and to make any other determination that it deems necessary or desirable for the
administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any inconsistency in the Plan or in any Option in the manner and to the extent the Committee deems
necessary or desirable. Any decision of the Committee in the interpretation and administration of the Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding
on all parties concerned. All powers of the Committee shall be executed in its sole discretion and need not be uniform as to similarly situated individuals. Any act of the Committee with respect to
the Plan may only be undertaken and executed with the affirmative consent of at least two-thirds of the members of the Committee. 

        2.3    Responsibility of Committee.    No member of the Board, no member of the Committee and no employee of the
Company shall be liable for any act or failure to act hereunder, except in circumstances involving his or her bad faith, gross negligence or willful misconduct, or for any act or failure to act
hereunder by any other member of the Committee or employee of the Company. The Company shall indemnify members of the Committee and any employee of the Company against any and all liabilities or
expenses to which they may be subjected by reason of any act or failure to act with respect to their duties under the Plan, except in circumstances involving his or her bad faith, gross negligence or
willful misconduct. 

        2.4    Delegation of Authority.    The Committee may delegate to an officer of the Company the authority to
(i) make grants under the Plan to employees of the Company and its subsidiaries who are not subject to the restrictions of Section 16(b) of the Exchange Act and who are not expected to
be subject to the limitations of Section 162(m) of the Code, and (ii) execute and deliver documents or take any other ministerial actions on behalf of the Committee with respect to
Options. The grant of authority under this Subsection 2.4 shall be subject to such conditions and 

 

limitations
as may be determined by the Committee. If the Chairman makes grants pursuant to the delegated authority under this Subsection 2.4, references in the Plan to the "Committee" as they relate
to making such grants shall be deemed to refer to the Chairman. 

        3.    Participants.    All employees, officers and directors of the Company and its subsidiaries (including members of
the Board who are not employees), as well as consultants and advisors to the Company or its subsidiaries, are eligible to participate in the Plan. Consistent with the purposes of the Plan, the
Committee shall have exclusive power to select the employees, officers, directors and consultants and advisors who may be granted Options under the Plan ("Optionees"). Eligible individuals may be
selected individually or by groups or categories, as determined by the Committee in its discretion, and designation as a person to receive Options in any year shall not require the Committee to
designate such a person as eligible to receive Options in any other year. 

        4.    Options under the Plan.    

        4.1    Common Stock Available for Options.    The aggregate number of shares of Common Stock that may be subject to
Options shall be 250,000 shares of Common Stock, which may be authorized and unissued or treasury shares, subject to any adjustments made in accordance with Section 5 hereof. The maximum number
of shares of Common Stock with respect to which Options may be granted to any individual Optionee shall be 100,000 shares. Any share of Common Stock subject to an Option that for any reason is
cancelled or terminated without having been exercised shall again be available for Options under the Plan; provided, however, that any such availability shall apply only for purposes of determining
the aggregate number of shares of Common Stock subject to Options and shall not apply for purposes of determining the maximum number of shares subject to Options that any individual Optionee may
receive. 

        4.2    Options.    Options are awards from the Company that will enable an Optionee to purchase shares of Common
Stock, and they are not to be treated as "incentive stock options" within the meaning of Section 422(b) of the Code. Each Option shall be evidenced by an option agreement ("Option Agreement")
and shall be subject to the terms, conditions and restrictions consistent with the Plan as the Committee may impose from time to time, subject to the following limitations: 

        4.2.1    Exercise Price.    The price per share (the "Exercise Price") of Common Stock subject to an Option shall be
determined by the Committee and may be equal to or greater than the Fair Market Value (as defined below) of a share of Common Stock on the date the Option is granted. 

If
Common Stock is publicly traded, then the "Fair Market Value" per share shall be determined as follows: (x) if the principal trading market for the Common Stock is a national securities
exchange or the Nasdaq National Market, the last reported sale price thereof on the relevant date or (if there were no trades on that date) the latest preceding date upon which a sale was reported, or
(y) if the Common Stock is not principally traded on such exchange or market, the mean between the last reported "bid" and "asked" prices of Common Stock on the relevant date, as reported on
Nasdaq or, if not so reported, as reported by the National Daily Quotation Bureau, Inc. or as reported in a customary financial reporting service, as applicable and as the Committee determines.
If the Company Stock is not publicly traded or, if publicly traded, is not subject to reported transactions or "bid" or "asked" quotations as set forth above, the Fair Market Value per share shall be
as determined by the Committee. 

        4.2.2    Payment of Exercise Price.    The Exercise Price may be paid in cash or, in the discretion of the Committee,
by the delivery of shares of Common Stock that have been owned by the Optionee for at least six months, or by a combination of these methods. In the discretion of the Committee, payment may also be
made by delivering a properly executed 

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exercise
notice to the Company together with a copy of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds to pay the Exercise Price. To
facilitate the foregoing, the Company may enter into agreements for coordinated procedures with one or more brokerage firms. The Committee may prescribe any other method of paying the Exercise Price
that it determines to be consistent with applicable law and the purpose of the Plan, including, without limitation, in lieu of the exercise of an Option by delivery of shares of Common Stock of the
Company then owned by Optionee, providing the Company with a notarized statement attesting to the number of shares owned for at least six months, where upon verification by the Company, the Company
would issue to the Optionee only the number of incremental shares to which the Optionee is entitled upon exercise of the Option. 

        4.2.3    Exercise Period.    Options shall be exercisable at such time or times and subject to such terms and
conditions as shall be determined by the Committee; provided, however, that no Option shall be exercisable later than ten years after the date it is granted. All Options shall terminate at such
earlier times and upon such conditions or circumstances as the Committee shall in its discretion set forth in the Option Agreement at the date of grant. 

        4.3    Termination of Employment, Disability or Death.    

        4.3.1    Except
as provided below (or in an Option Agreement), an Option may only be exercised while the Optionee is employed by, or providing service to, the Company as an
employee, member of the Board or advisor or consultant. In the event that an Optionee ceases to be employed by, or provide service to, the Company for any reason other than Disability (as defined in
Paragraph (4.3.5) below), death or a termination for Cause (as defined in Paragraph (4.3.5) below), any Option which is otherwise exercisable by the Optionee shall terminate unless exercised within
90 days after the date on which the Optionee ceases to be employed by, or provide service to, the Company, but in any event no later than the date of expiration of the Option. Except as
otherwise provided by the Committee, any Optionee's Options which are not otherwise exercisable as of the date on which the Optionee ceases to be employed by, or provide service to, the Company shall
terminate as of such date. 

        4.3.2    In
the event the Optionee ceases to be employed by, or provide service to, the Company on account of a termination for Cause by the Company or a termination by the
Optionee, any Option held by the Optionee shall terminate as of the date the Optionee ceases to be employed by, or provide service to, the Company. In addition, notwithstanding any other provisions of
this Section 4, if the Committee determines that the Optionee has engaged in conduct that constitutes Cause at any time while the Optionee is employed by, or providing service to, the Company,
or after the Optionee's termination of employment or service, any Option held by the Optionee shall immediately terminate. In
the event the Committee determines that the Optionee has engaged in conduct that constitutes Cause, in addition to the immediate termination of all Options, the Optionee shall automatically forfeit
all shares underlying any exercised portion of an Option for which the Company has not yet delivered the share certificates, upon refund by the Company of the Exercise Price paid by the Optionee for
such shares (subject to any right of setoff by the Company). 

        4.3.3    In
the event the Optionee ceases to be employed by, or provide service to, the Company because the Optionee is Disabled, any Option which is otherwise exercisable by
the Optionee shall terminate unless exercised within one year after the date on which the Optionee ceases to be employed by, or provide service to, the Company, but in any event no later than the date
of expiration of the Option. 

        4.3.4    If
the Optionee dies while employed by, or providing service to, the Company, any Option which is otherwise exercisable by the Optionee shall terminate unless
exercised within 

3

 

one
year after the date on which the Optionee ceases to be employed by, or provide service to, the Company, but in any event no later than the date of expiration of the Option. 

        4.3.5    For
purposes of this Section 4.3: 

        4.3.5.1    The
term "Company" shall mean the Company and its subsidiary corporations. 

        4.3.5.2    "Disability"
or "Disabled" shall mean an Optionee's becoming disabled within the meaning of Section 22(e)(3) of the Code. 

        4.3.5.3    "Cause"
shall mean, except to the extent specified otherwise by the Committee, a finding by the Committee that the Optionee (i) has breached any provision of
his or her employment or service contract with the Company, including without limitation covenants against competition, (ii) has engaged in any type of malfeasance or willful misconduct,
including, without limitation, fraud, embezzlement, theft, commission of a felony or proven dishonesty in the course of his or her employment or service, (iii) has engaged in the illegal use of
drugs or the excessive and recurring use of alcohol, (iv) has engaged in the willful violation of Company policy or a willful, material violation of applicable law, or (v) has disclosed
trade secrets or confidential information of the Company to persons not entitled to receive such information. 

        4.4    Interpretation of Options.    In the event of any conflict between the provisions of the Plan and the
provisions of any Option Agreement, the provisions of the Plan shall be controlling. 

        5.    Adjustments to the Options.    In the event of any change in the outstanding Common Stock of the Company by
reason of any stock split, stock dividend, split-up, split-off, spin-off, recapitalization, merger, consolidation, reorganization, combination or exchange of
shares, a sale by the Company of all or part of its assets, or in the event of any distribution to stockholders other than a normal cash dividend, or other extraordinary or unusual event, if the
Committee shall determine, in its discretion, that such change equitably requires an adjustment in the terms of any Option or the number of shares of Common Stock available for Options, such
adjustment may be made by the Committee and shall be final, conclusive and binding for all purposes of the Plan. 

        6.    Change in Control.    

        6.1    Effect.    Upon the occurrence of a Change in Control (as defined below), each outstanding Option on the date
of such Change in Control shall become exercisable in full (whether or not then exercisable). In its sole discretion, the Committee may determine that, upon the occurrence of a Change in Control, each
outstanding Option shall terminate within a specified number of days after notice to the Optionee thereunder, and each such Optionee shall receive, with respect to each share of Common Stock subject
to such Option, an amount equal to the excess of the Fair Market Value of such shares immediately prior to such Change in Control over the exercise price per share of such Option; such amount shall be
payable in cash, in one or more kinds of property (including the property, if any, payable in the transaction) or a combination thereof, as the Committee shall determine in its sole discretion. 

        6.2    Defined.    For purposes of this Plan, a Change in Control shall be deemed to have occurred if: 

        6.2.1    a
tender offer (or series of related offers) shall be made and consummated for the ownership of 50% or more of the outstanding voting securities of the Company; 

        6.2.2    the
Company shall be merged or consolidated with another corporation and as a result of such merger or consolidation less than 50% of the outstanding voting securities
of the surviving or resulting corporation shall be owned in the aggregate by the former 

4

 

shareholders
of the Company, any employee benefit plan of the Company or its subsidiaries, and their affiliates; 

        6.2.3    the
Company shall sell substantially all of its assets to another corporation that is not wholly owned by the Company; or 

        6.2.4    a
Person (as defined below) shall acquire 50% or more of the outstanding voting securities of the Company (whether directly, indirectly, beneficially or of record). 

        For
purposes of this Section 6.2, ownership of voting securities shall take into account and shall include ownership as determined by applying the provisions of
Rule 13d-3(d)(I)(i) (as in effect on the date hereof) under the Exchange Act. Also for purposes of this Subsection 6.2, Person shall have the meaning given in
Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof; however, a Person shall not include (1) the Company or any of its subsidiaries;
(2) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its subsidiaries; (3) an underwriter temporarily holding securities pursuant
to an offering of such securities; or (4) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportion as their ownership of stock of the
Company. 

        7.    Transferability of Options.    Except as provided below, an Optionee's rights under an Option may not be
transferred or encumbered, except by will or by the laws of descent and distribution or pursuant to a qualified domestic relations order (as defined under Section 414(p) the Code). 

        8.    Withholding.    All distributions made with respect to an Option shall be net of any amounts required to be
withheld pursuant to applicable federal, state and local tax withholding requirements. The Company may require an Optionee to remit to it or to the corporation that employs an Optionee an amount
sufficient to satisfy such tax withholding requirements prior to the delivery of any certificates for Common Stock. In lieu thereof, the Company or the employing corporation shall have the right to
withhold the amount of such taxes from any other sums due or to become due to the Optionee as the Company shall prescribe. The Committee may, in its discretion and subject to such rules as it may
adopt, permit an Optionee to pay all or a portion of the federal, state and local withholding taxes arising in connection with any Option exercise by electing to have the Company withhold shares of
Common Stock having a Fair Market Value equal to the amount of tax to be withheld. 

        9.    Shareholder Rights.    An Optionee shall not have any of the rights or privileges of a holder of Common Stock
for any Common Stock that is subject to an Option, including any rights regarding voting or the payment of dividends, unless and until a certificate representing such Common Stock has been delivered
to the Optionee. 

        10.    Tenure.    An Optionee's right, if any, to continue to serve the Company or its subsidiaries as a director,
officer, employee, consultant or advisor shall not be expanded or otherwise affected by his or her designation as an Optionee. 

        11.    No Fractional Shares.    No fractional shares of Common Stock shall be issued or delivered pursuant to the Plan
or any Option. The Committee shall determine whether cash shall be paid in lieu of fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated. 

        12.    Duration, Amendment and Termination.    No Option may be granted more than ten years after the Effective Date
(as described in Section 14 below). The Plan may be amended or suspended in whole or in part at any time and from time to time by the Board, but no amendment shall be effective unless and until
the same is approved by shareholders of the Company where the Amendment would (i) increase the total number of shares which may be issued under the Plan or (ii) increase the maximum
number of shares of Common Stock with respect to Options that may be granted to any 

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individual
Optionee. No amendment or suspension of the Plan shall adversely affect in a material manner any right of any Optionee with respect to any Option theretofore granted without such Optionee's
written consent. 

        13.    Governing Law.    This Plan, Options granted hereunder and actions taken in connection with the Plan shall be
governed by the laws of the State of Delaware regardless of the law that might otherwise apply under applicable principles of conflicts of laws. 

        14.    Effective Date.    This Plan shall be effective as of January 1, 1999, which is date as of which the
Plan was adopted by the Board. 

	APPROVED	 	 
	

	
 	

 
	
IESI CORPORATION	
 	

 
	

By:	
 	

 Charles F. Flood

President and Chief Executive Officer	
 	

 

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IESI CORPORATION 1999 Stock Option Plan As Amended March 17, 2003<PAGE>
                                                                  EXHIBIT 10.1

              CONVERSION AGREEMENT ENTERED INTO ON JUNE 10, 2003

BY AND AMONG:   CAISSE DE DEPOT ET PLACEMENT DU QUEBEC, a body politic duly
                constituted pursuant to the LOI SUR LA CAISSE DE DEPOT ET
                PLACEMENT DU QUEBEC (L.R.Q. c. C-2), having its principal
                place of business in the City of Montreal, Province of Quebec,

                (hereinafter referred to as "CDPQ")

AND:            TOUCHTUNES MUSIC CORPORATION, a corporation,  duly incorporated
                according to the laws of the State of Nevada,

                (hereinafter referred to as the "CORPORATION")

1.       PREAMBLE

1.1      WHEREAS Capital Communications CDPQ Inc. loaned to the Corporation the
sum of US$250,000 on July 5, 2001, the sum of US$250,000 on August 22, 2001, the
sum of US$250,000 on February 19, 2002, the sum of US$500,000 on March 27, 2002,
the sum of US$500,000 on April 10, 2002 and the sum of US$250,000 on May 22,
2002 (for a total principal amount outstanding of US$2,000,000), the whole as
evidenced by promissory notes issued by the Corporation to Capital
Communications CDPQ Inc. on such dates (the "COMMUNICATIONS PROMISSORY NOTES").

1.2      WHEREAS Capital Technologies CDPQ Inc. loaned to the Corporation the
sum of US$250,000 on July 6, 2001, the sum of US$250,000 on August 22, 2001, the
sum of US$500,000 on November 15, 2001 (which sum of US$500,000 was reimbursed
with interest on November 28, 2001), the sum of US$500,000 on December 20, 2001,
the sum of US$250,000 on February 20, 2002 and the sum of US$250,000 on April
11, 2002 (for a total principal amount outstanding of US$1,500,000), the whole
as evidenced by promissory notes issued by the Corporation to Capital
Technologies CDPQ Inc. on such dates (the "TECHNOLOGIES PROMISSORY NOTES").

1.3      WHEREAS Capital Communications CDPQ Inc. and Capital Technologies CDPQ
Inc. each loaned to the Corporation the sum of US$400,000 on December 20, 2002,
the whole as evidenced by convertible debentures issued by the Corporation to
each of Capital Communications CDPQ Inc and Capital Technologies CDPQ Inc. on
December 20, 2002 (the "DEBENTURES") having a maturity date of June 30, 2003.

1.4      WHEREAS Capital Communications CDPQ Inc. and Capital Technologies Inc.
have assigned, on the date hereof, all the Communications Promissory Notes,
Technologies Promissory Notes, Debentures (collectively, the "NOTES") and all
the shares held by them in the capital stock of the Corporation to CDPQ.
<PAGE>
                                      -2-

1.5      WHEREAS CDPQ holds the following number and class of shares of the
Corporation as of the date hereof:

<Table>
<Caption>
INVESTOR                                 NUMBER AND CLASS
--------                                 ----------------
<S>                                      <C>
CDPQ                                     9,235,774 Series A Preferred Shares
                                         8,888,889 Series B Preferred Shares
</Table>

1.6      WHEREAS The Second Amended and Restated Articles of Incorporation of
the Corporation provided that the holders of Series B Preferred Shares are
entitled to receive, during each fiscal year of the Corporation, a cumulative
and preferential dividend of 9% on the full amount of the consideration received
by the Corporation for each share held, which is $2.25, which dividend shall
accrue daily from and after the date of issuance of each share.

1.7      WHEREAS The Second Amended and Restated Articles of Incorporation of
the Corporation will be further amended and Third Amended and Restated Articles
of Incorporation will be duly filed by the Corporation (the "THIRD AMENDED
CHARTER").

1.8      WHEREAS The Third Amended Charter creates Series C Preferred Stock and
provides that if shares of Class A voting common stock or Series C Preferred
Stock of the Corporation are issued for a per share price that is lower than the
conversion price of the Series A Preferred Shares or the Series B Preferred
Shares, then the respective conversion prices of the Series A Preferred Shares
and/or the Series B Preferred Shares, as the case may be, shall be adjusted to
such lower price.

1.9      WHEREAS On the date hereof, the Corporation owes CDPQ the following
amounts pursuant to the Notes (including principal, accrued interest calculated
up to and including December 31, 2002 and accrued dividends on the Series B
Preferred Shares):

<Table>
<Caption>
INVESTOR                                                 AMOUNT DUE
--------                                                 ----------
<S>                                                    <C>
CDPQ                                                   US$ 15,003,123
</Table>

1.10     WHEREAS Following the amendments to the capital stock of the
Corporation as provided in the Third Amended Charter and in consideration
thereof, the Corporation and CDPQ have agreed to convert the principal and
accrued interest on the Notes as well as all accrued dividends on the Series B
Preferred Shares into Series C Preferred Shares, the whole on the terms and
conditions set out in this Conversion Agreement.

NOW, THEREFORE, THIS AGREEMENT WITNESSETH:

2.       INTERPRETATION

2.1      In this Agreement:

2.1.1    "CLOSING" has the meaning ascribed thereto in subsection 4.1;

2.1.2    "COMMON SHARES" means the shares of Class A voting common stock of the
         Corporation, as such shares are described in the Third Amended Charter;
<PAGE>
                                      -3-

2.1.3    "COMMUNICATIONS PROMISSORY NOTES" has the meaning ascribed thereto in
         subsection 1.1;

2.1.4    "CONVERSION SHARES" has the meaning ascribed thereto in subsection 3.1;

2.1.5    "CONVERTED AMOUNT" has the meaning ascribed thereto in subsection 3.1;

2.1.6    "DEBENTURES" has the meaning ascribed thereto in subsection 1.3;

2.1.7    "EXCHANGE ACT" means the SECURITIES EXCHANGE ACT OF 1934 (United
         States), as amended from time to time;

2.1.8    "NOTES" has the meaning ascribed thereto in subsection 1.4;

2.1.9    "SEC" means the United States Securities and Exchange Commission;

2.1.10   "SECURITIES ACT" means the SECURITIES ACT OF 1933, as amended from
         time to time;

2.1.11   "SERIES A PREFERRED SHARES" means the shares of Series A Preferred
         Stock as described in the Third Amended Charter;

2.1.12   "SERIES B PREFERRED SHARES" means the shares of Series B Preferred
         Stock as described in the Third Amended Charter;

2.1.13   "SERIES C PREFERRED SHARES" means the shares of Series C Preferred
         Stock as described in the Third Amended Charter;

2.1.14   "SHAREHOLDERS AGREEMENT" means the Amended and Restated Voting Trust
         and Limited Shareholders Agreement to be entered into on the date
         hereof among the Corporation, CDPQ, Societe Innovatech du Grand
         Montreal and Techno Expres S.A.;

2.1.15   "TMC SEC DOCUMENTS" has the meaning ascribed there in subsection 5.1.3;

2.1.16   "TECHNOLOGIES PROMISSORY NOTES" has the meaning ascribed thereto in
         subsection 1.2;

2.1.17   "THIRD AMENDED CHARTER" has the meaning ascribed thereto in subsection
         1.7.

3.       DEBT CONVERSION

3.1      Subject to the terms and conditions of this Conversion Agreement, CDPQ
hereby agrees to convert, at the Closing, the following aggregate amount which
is owed to it by the Corporation pursuant to the Notes and all dividends accrued
on the Series B Preferred Shares:

<Table>
<Caption>
INVESTOR                                            AGGREGATE AMOUNT DUE
--------                                            --------------------
<S>                                                 <C>
CDPQ                                                   US$15,003,123
</Table>

(the "CONVERTED AMOUNT") into, and the Corporation hereby agrees to issue to
CDPQ, at the Closing, in full repayment of the Converted Amount and satisfaction
in full of indebtedness, the following number and class of shares (the
"CONVERSION SHARES"), at a conversion and issuance price of US$0.50 per share:
<PAGE>
                                      -4-

<Table>
<Caption>
INVESTOR                                         NUMBER AND CLASS OF SHARES
-------                                          --------------------------
<S>                                         <C>
CDPQ                                        25,000,000 Series C Preferred Shares
</Table>

3.2      CDPQ hereby acknowledges that the above number of Series C Preferred
Shares shall be issued, at the Closing, as complete and final payment of the
Converted Amount.

4.       CLOSING

4.1      The consummation of the transactions described in Section 3 above (the
"CLOSING") shall take place, by facsimile, overnight delivery, e-mail or other
means, at the offices of Arnold & Porter, 399 Park Avenue, New York, NY 10022
within three (3) business days following the satisfaction of the closing
conditions set forth below or at such other time and place as the Corporation
and CDPQ shall mutually agree.

4.2      The obligations of the Corporation and CDPQ under this Conversion
Agreement are subject to the fulfilment, on or before the Closing, of each of
the following conditions:

4.2.1    All corporate action on the part of (i) the Corporation and its
         officers, directors and shareholders and (ii) CDPQ and its officers,
         directors and shareholders necessary for the authorization,
         execution and delivery of this Conversion Agreement and the
         performance of all obligations contemplated hereunder shall have
         been taken;

4.2.2    The Corporation shall have obtained the requisite stockholder
         approval of the Third Amended Charter in compliance with Nevada law
         and shall have filed the Third Amended Charter with the appropriate
         authority in the State of Nevada and received confirmation of the
         receipt of such filing;

4.2.3    The Corporation, CDPQ, Societe Innovatech du Grand Montreal and
         Techno Expres S.A. shall have executed and delivered the Shareholders
         Agreement; and

4.2.4    The Corporation shall have delivered to CDPQ an opinion letter from
         its legal counsel confirming the matters raised in subsections 5.1.1,
         5.1.2, 5.1.4 (i) and (iii), 5.1.5, 5.1.9 (i) and (iii) and the last
         sentence of 5.1.10 hereof.

5.       REPRESENTATIONS AND WARRANTIES OF THE CORPORATION

5.1      The Corporation hereby represents and warrants to CDPQ as of the date
of Closing as follows and acknowledges that CDPQ is relying upon the accuracy of
each and every one of such representations and warranties in connection herewith
and would not have entered into this Conversion Agreement without such
representations and warranties:

5.1.1    SECURITIES ACT REPRESENTATION. Assuming the accuracy of the
         representations and warranties of CDPQ contained in Section 6
         hereof, the offer, issuance and sale by the Corporation of the
         Conversion Shares hereunder is exempt from the registration and
         prospectus delivery requirements of the Securities Act;

5.1.2    "BLUE SKY" LAW COMPLIANCE. Assuming the accuracy of the
         representations and warranties of CDPQ contained in Section 6 hereof,
         the Corporation has made all filings and taken all actions necessary
         to comply with all U.S. "blue sky" laws with regard to the issuance of
         the Conversion Shares;
<PAGE>
                                      -5-

5.1.3    PUBLIC FILINGS. The Corporation has delivered to CDPQ accurate and
         complete copies (excluding copies of exhibits) of each report,
         registration statement (on a form other than Form S-8) and definitive
         proxy statement filed by the Corporation with the SEC from May 18,
         2000 until the date hereof (the "TMC SEC DOCUMENTS"). As of the time
         it was filed with the SEC (or, if amended or superseded by a filing
         prior to the date of this Conversion Agreement, then on the date of
         such filing): (i) each of the TMC SEC Documents complied in all
         material respects with the applicable requirements of the Securities
         Act or the Exchange Act, as the case may be; and (ii) none of the TMC
         SEC Documents contained any untrue statement of a material fact or
         omitted to state a material fact required to be stated therein or
         necessary in order to make the statements therein, in the light of the
         circumstances under which they were made, not misleading. Without
         limiting the foregoing, the financial statements of the Corporation
         for the period ended December 31, 2002 provided to CDPQ are true and
         correct and present fairly the financial position of the Corporation
         as at such date and have been prepared in accordance with generally
         accepted accounting principles in the United States of America;

5.1.4    INCORPORATION. The Corporation and each of its subsidiaries (i) has
         been duly incorporated and organized and is validly existing as a
         corporation in good standing under the laws of its jurisdiction of
         incorporation, (ii) is duly licensed and registered and qualified as a
         corporation to do business in each jurisdiction in which it owns or
         leases property or carries on business, except where failure to be so
         qualified would not have a material adverse effect on the business,
         properties or financial condition of the Corporation and its
         subsidiaries taken as a whole, and (iii) has all necessary corporate
         power to own its properties and to carry on its business;

5.1.5    VALID AGREEMENT. The Corporation has the requisite corporate power,
         capacity and authority (i) to execute, deliver and perform its
         obligations under this Conversion Agreement; (ii) to issue the
         Conversion Shares to CDPQ in the manner and for the purposes set out
         in this Conversion Agreement; and (iii) to execute, deliver and
         perform its obligations under all other agreements and instruments
         executed and delivered by it pursuant to or in connection with this
         Conversion Agreement. All corporate action on the part of the
         Corporation, its officers, directors and shareholders necessary for
         the authorization, execution and delivery of this Conversion
         Agreement, and the performance of all obligations of the Corporation
         hereunder and the authorization, issuance and delivery of the
         Conversion Shares has been taken, and this Conversion Agreement
         constitutes a valid and legally binding obligation of the Corporation,
         enforceable in accordance with its terms;

5.1.6    ISSUANCE OF CONVERSION SHARES. The issuance of the Conversion Shares
         pursuant to this Agreement are not and will not be subject to any
         pre-emptive rights or rights of first refusal other than as provided
         in the Shareholders Agreement. When issued at the Closing in
         accordance with the terms of this Conversion Agreement, all Conversion
         Shares will be validly issued, fully paid and non-assessable, and will
         be free of all liens, mortgages, charges, security interests, burdens,
         encumbrances and other restrictions or limitations of any kind
         whatsoever, and restrictions on transfer other than restrictions on
         transfer provided in the Shareholders Agreement and under the state
         and/or federal securities laws at the time a transfer by CDPQ is
         proposed;

5.1.7    SHARE CAPITAL. After the issuance of the Conversion Shares, at the
         Closing, the only issued and outstanding  shares in the capital stock
         of the Corporation and its
<PAGE>
                                      -6-

         subsidiaries (and rights, options and warrants to acquire same) shall
         be as set out in SCHEDULE 5.1.7 annexed hereto, all of which, except
         as indicated in such SCHEDULE 5.1.7, will be validly issued, fully
         paid and non-assessable. There are no other outstanding shares,
         warrants, rights, options, securities convertible into shares of the
         capital stock of the Corporation or any other agreements or rights to
         purchase or subscribe for any shares of the capital stock of the
         Corporation or convert any obligation or shares into any shares of the
         capital stock of the Corporation and the Corporation has not agreed to
         issue or sell any shares of its capital stock or any securities of any
         kind;

5.1.8    SUBSIDIARIES. The Corporation does not currently own or control,
         directly or indirectly, any other corporation, association or other
         business, entity, other than TouchTunes Digital Jukebox Inc.;

5.1.9    COMPLIANCE WITH OTHER INSTRUMENTS. The execution, delivery and
         performance by the Corporation of this Conversion Agreement and of the
         transactions contemplated hereby will not result in any violation of
         or constitute a default under any provision of (i) its Articles of
         Incorporation or By-laws, (ii) any material agreement or instrument to
         which the Corporation is a party or by which the Corporation is bound,
         or (iii) any judgement, decree, order, law, statute, rule or
         regulation applicable to the Corporation;

5.1.10   COMPLIANCE WITH LAWS. The Corporation and each of its subsidiaries has
         been conducting its business in the ordinary course in compliance with
         all applicable federal, provincial, state and local laws, rules and
         regulations of each jurisdiction in which it carries on business,
         including, without limitation, those pertaining to the environment,
         and is not in breach of any such laws, rules and regulations where a
         breach would have a material adverse effect on such business. The
         Corporation and each of its subsidiaries owns or possesses all
         requisite governmental licenses, authorizations and approvals to carry
         on its business as now conducted by it. All such licenses,
         registrations and qualifications are in good standing. The issuance of
         the Conversion Shares by the Corporation to CDPQ pursuant to this
         Conversion Agreement is being effected in accordance with all
         applicable securities legislation;

5.1.11   DISCLOSURE. None of the written information or statements provided by
         the Corporation to CDPQ upon their request prior to Closing contained
         any untrue statement of material fact or omitted to state a material
         fact required to be stated therein or necessary in order to make the
         statements therein, in the light of the circumstances under which they
         were made, not misleading;

5.1.12   LITIGATION. Other than as disclosed in the TMC SEC Documents, there is
         no suit, action, litigation, arbitration proceeding or governmental
         proceeding, including appeals and applications for review, in
         progress, pending or, as far as the Corporation is aware of,
         threatened against or relating to any of the Corporation or its
         subsidiaries or affecting any of the Corporation's business or its
         subsidiaries' business and which, if determined adversely to the
         Corporation or its subsidiaries, might materially and adversely affect
         the business, future prospects or the financial condition of the
         Corporation or of any of its subsidiaries;

5.1.13   SOLVENCY. Neither the Corporation nor any of its subsidiaries has
         proposed a compromise or arrangement to its creditors, has any
         petition for a receiving order filed against it, has taken any
         proceeding with respect to a compromise, arrangement or
<PAGE>
                                      -7-

         winding-up, or otherwise taken advantage of any insolvency or
         bankruptcy legislation or has had a receiver appointed with respect to
         any of its assets, had any encumbrancer take possession of any of its
         property or had any execution of distress or seizure become
         enforceable or levied upon any of its property;

5.1.14   PROPERTY. The Corporation and each of its subsidiaries has good and
         marketable title to, or other right to use, all property (whether real
         or personal, tangible or intangible) that is material to its business.

6.       REPRESENTATIONS AND WARRANTIES OF CDPQ

6.1      CDPQ hereby represents and warrants to the Corporation, as of the date
of Closing, as follows and acknowledges that the Corporation is relying upon
such representations and warranties in connection herewith and would not have
entered into this Conversion Agreement without such representations and
warranties:

6.1.1    CORPORATE ORGANIZATION. CDPQ is duly constituted, validly existing and
         in good standing under the laws of its jurisdiction of incorporation;

6.1.2    POWER AND AUTHORITY. CDPQ has the necessary corporate power and
         authority to execute this Conversion Agreement and to perform its
         obligations hereunder. The execution of this Conversion Agreement by
         CDPQ and the performance of its obligations hereunder have been duly
         authorized by all necessary action on its part and do not require any
         action or consent of, any registration with, or notification to any
         person, or any action or consent under any laws of the Province of
         Quebec or any other laws to which CDPQ is subject;

6.1.3    VALIDITY. The execution of this Conversion Agreement, the consummation
         of the transactions contemplated herein, the performance by CDPQ of
         its obligations hereunder and the compliance by it with this
         Conversion Agreement do not:

         6.1.3.1  violate, contravene or breach, or constitute a default under,
         the constating documents, law or by-laws of CDPQ; or

         6.1.3.2  violate, contravene or breach any laws to which CDPQ is
         subject;

6.1.4    INVESTMENT. CDPQ is acquiring its Conversion Shares as provided in
         this Conversion Agreement for investment for its own account or for
         the account of its affiliates, and not with the view to, or for resale
         in connection with, any distribution thereof other than to its
         affiliates;

6.2      ACKNOWLEDGEMENTS. CDPQ hereby makes the following acknowledgements:

6.2.1    REGISTRATION. It understands that the right to acquire the Conversion
         Shares as provided in this Conversion Agreement, has not been, and
         will not be, registered under the Securities Act or applicable state
         securities laws, and is being extended to CDPQ pursuant to a specific
         exemption from the registration provisions of the Securities Act and
         such laws, the availability of which depends upon, among other things,
         the bona fide nature of the investment intent and the accuracy of its
         representations as expressed in subsection 6.1.4;
<PAGE>
                                      -8-

6.2.2    NON-TRANSFERABILITY. It acknowledges that any resale of any of the
         Conversion Shares may be subject to restrictions under applicable
         securities laws unless a subsequent disposition thereof is registered
         under the Securities Act or exempt from such registration;

6.2.3    ACCREDITED INVESTOR. CDPQ is an "accredited investor" within the
         meaning of Rule 501 under the Securities Act.

7.       SURVIVAL OF REPRESENTATIONS

7.1      The representations, warranties and covenants made by the parties
hereunder will survive the Closing.

8.       FURTHER ASSURANCES

8.1      Following the Closing, as may be necessary or desirable, and without
further consideration, each party shall deliver such documents, certificates,
assurances and other instruments as may be reasonably required to carry out the
provisions of this Conversion Agreement.

9.       MISCELLANEOUS PROVISIONS

9.1      All notices in connection with this Conversion Agreement shall be in
writing and either hand-delivered, mailed by registered or certified mail,
postage prepaid or sent by facsimile transmission (with confirmation notices
sent as described above). Any notice shall be deemed to have been received on
the date of the hand-delivery, if delivered by hand, on the fifth business day
following the date of mailing if sent by registered or certified mail or on the
next business day following the date of transmission if sent by facsimile
transmission. The parties' respective addresses for the purpose of receiving
such notices are as follows:

If to CDPQ:                   CAISSE DE DEPOT ET PLACEMENT DU QUEBEC
                              Centre CDP Capital
                              1000, Place Jean-Paul Riopelle
                              Montreal, Quebec
                              H2Z 2B3

                              Attention: President of Capital Technologies
                              CDPQ Inc.

                              Telecopier: (514) 847-2628

                              Attention: President of Capital Communications
                              CDPQ Inc.

                              Telecopier: (514) 281-9364
<PAGE>
                                      -9-

with a copy in all cases to:  LAPOINTE ROSENSTEIN
                              1250 Rene-Levesque Blvd. West
                              Suite 1400
                              Montreal, Quebec
                              H3B 5E9

                              Attention: Elizabeth Pedzik

                              Telecopier: (514) 925-5047

if to the Corporation:        TOUCHTUNES MUSIC CORPORATION
                              1800 East Sahara
                              Suite 107
                              Las Vegas, Nevada
                              89104, U.S.A.

                              Attention: The President

                              Telecopier: (702) 734-7500

with a copy in all cases to:  ARNOLD & PORTER
                              399 Park Avenue
                              New York, NY 10022-4690

                              Attention:  Christine D. Rogers, Esq.

                              Telecopier: (212) 715-1399

                              and:

                              MCDONALD CARANO WILSON MCCUNE BERGIN
                              FRANKOVICH & HICKS LLP
                              241 Ridge Street
                              Reno, Nevada 89501

                              Attention: Paul C. Deyhle, Esq.

                              Telecopier: (775) 788-2020

Any party may, at any time, give notice of any change of address to the other
and the address specified therein shall be such party's address for the purpose
of receiving notices.

9.2      The division of this Conversion Agreement into paragraphs and
subparagraphs and the insertion of headings are for convenience of reference
only and will not affect the interpretation of this Conversion Agreement.

9.3      This Conversion Agreement and the provisions hereof shall enure to the
benefit of and be binding upon the parties and their respective successors and
permitted assigns.

9.4      All references to dollar amounts herein mean United States dollars
unless otherwise indicated.
<PAGE>
                                      -10-

9.5      This Conversion Agreement may be executed in any number of counterparts
(either originally or by facsimile), each of which shall be deemed to be an
original, and all of which taken together shall be deemed to constitute one and
the same instrument, and it shall not be necessary in making proof of this
Conversion Agreement to produce or account for more than one such counterpart.

9.6      This Agreement shall be governed in all respects by the laws of the
State of Nevada as they are applied to agreements entered into in Nevada between
Nevada residents and performed entirely within Nevada. Whenever possible, each
provision of this Conversion Agreement shall be interpreted in such manner as to
be effective and valid under such law, but if any provision hereof shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions hereof.

IN WITNESS WHEREOF, each of the parties has caused this Conversion Agreement to
be executed on its behalf by a duly authorised officer all as of the date first
written above.

CAISSE DE DEPOT ET PLACEMENT DU QUEBEC       TOUCHTUNES MUSIC CORPORATION

Per: /s/ Denis Dionne                      Per:  /s/ John Perrachon
     ------------------------------              ------------------------------
     Name: Denis Dionne                          Name: John Perrachon
     Title:                                      Title: President and C.E.O.

Per: /s/ Andre Bourbonnais
     ------------------------------
     Name: Andre Bourbonnais
     Title:

<PAGE>

                                                           Conversion Agreement
                                                   TouchTunes Music Corporation

                                 SCHEDULE 5.1.7

                          ISSUED AND OUTSTANDING SHARES

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