EXHIBIT 3.3
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
IMAGEMATRIX CORPORATION
ImageMatrix Corporation (hereinafter called the "Corporation"), organized
and existing under and by virtue of the Colorado Business Corporation Act of the
State of Colorado, does hereby certify as follows:
By written consent of the Board of Directors of the Corporation, a
resolution was duly adopted, pursuant to Section 7-108-202 of the Colorado
Business Corporation Act of the State of Colorado, setting forth an amendment
to the Articles of Incorporation of the Corporation which determines the
preferences, limitations and relative rights of a new class of preferred stock.
The amendment was duly adopted by the Board of Directors pursuant to Section 7-
106-102. The resolution setting forth the amendment is as follows:
RESOLVED: That pursuant to the authority vested in the Board of Directors of
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series of Preferred Stock of the Corporation be and it hereby is
created, and the designation and relative rights and preferences of
the shares of such series, and the limitations or restrictions
thereof, are as follows:
C. SERIES A CONVERTIBLE PREFERRED STOCK
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Three Million Three Hundred Thousand (3,300,000) shares of the authorized
and unissued Preferred Stock of the Corporation are hereby designated "Series A
Convertible Preferred Stock" (the "Series A Preferred Stock") with the rights,
preferences, powers, privileges and restrictions, qualifications and limitations
set forth below:
1. Dividends. The holders of the Series A Preferred Stock shall be
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entitled to receive, out of any funds legally available therefor, dividends
which will accrue on the outstanding principal amounts of the Series A Preferred
Stock at the rate of seven percent (7%) (the "Dividend Rate") of the purchase
price per annum, payable in preference and priority to any payment of any cash
dividend on Common Stock or any other shares of capital stock of the Corporation
other than the Series A Preferred Stock, on a quarterly basis. Such dividends
shall accrue, shall be payable, and shall be deemed to accrue from day to day
whether or not paid on or declared, and shall be cumulative so that if at any
time such dividends on the Series A Preferred Stock shall not have been paid,
and set apart for payment, the deficiency shall be fully paid on and set apart
for payment before any dividend shall be earned or set apart for any other
shares of capital stock of the Corporation and before any purchase or
acquisition of any other shares of capital stock of the Corporation is made by
the Corporation, except the repurchase of the shares
of capital stock of the Corporation from employees of this Corporation upon
termination of employment. The Dividend Rate shall be increased to eighteen
percent (18%) in the event a registration statement is not filed with the U.S.
Securities and Exchange Commission to register the Common Stock underlying the
Series A Preferred Stock without sixty (60) days of the closing of the
Securities Purchase Agreement, as hereinafter defined, or if such registration
is not effective within ninety (90) days thereafter. At the option of the
Corporation, dividends payable pursuant to this Paragraph may be paid in shares
of the Corporation's Common Stock, at the valuation set forth in Paragraph 4(a)
hereof.
2. Liquidation, Dissolution or Winding Up.
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In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the Corporation, each holder ("Holder") of shares of Series A
Preferred Stock then outstanding shall be entitled to receive the amount of
$1.00 per share, as adjusted for any stock splits, combinations or other similar
recapitalizations affecting such shares, plus any accrued but unpaid dividends
thereon, and shall then be entitled to receive on a pro-rata basis with holders
of common stock (based, in the case of the Series A Preferred Stock, on the
number of shares of Common Stock into which such convertible securities are then
convertible), the remaining funds and assets of the Corporation available for
distribution to its stockholders.
3. Voting. The Series A Preferred Stock shall be nonvoting.
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4. Optional Conversion. The Holders of the Series A Preferred Stock
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shall have conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. Each share of Series A Preferred Stock shall be
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convertible, at the option of the Holder thereof, at any time and from time to
time, into such number of fully paid and nonassessable shares of Common Stock as
is determined by dividing the number of shares of Series A Preferred Stock plus
accrued but unpaid dividends, by the lower of (i) $2.25 per share or (ii) 75% of
the average closing bid price of the Company's Common Stock on the Nasdaq
SmallCap Market (or such other stock exchange, quotation service or over the
counter market on which the Common Stock may be traded) for the eight (8)
trading days prior to Conversion (the "Conversion Price"). The Conversion
Price, and the rate at which shares of Series A Preferred Stock may be converted
into shares of Common Stock, shall be subject to adjustment as provided below.
(b) Fractional Shares. No fractional shares of Common Stock will be
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issued in connection with the Conversion hereunder, but in lieu of such
fractional shares the Company shall make a cash payment therefor in an amount
determined in such reasonable manner as may be prescribed by the Board of
Directors of the Company.
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(c) Mechanics of Conversion.
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(i) In order for a Holder of Series A Preferred Stock to convert
shares of Series A Preferred Stock into shares of Common Stock, such holder
shall deliver by telecopy or otherwise, a written request to convert Holder's
Series A Preferred Stock into Common Stock ("Conversion Notice") in the form
attached hereto as Exhibit A to the Company at its principal office to the
attention of Blair McNea, Secretary and Gerald E. Henderson, President, and
Holder shall deliver to Blair McNea at the Company as soon as practicable
thereafter, the original Conversion Notice and the original certificates for the
Series A Preferred Stock. At its expense, the Company shall within five (5)
business days of its receipt of the original Conversion Notice and the original
certificates for the Series A Preferred Stock, issue and deliver to the Holder
at the Company's principal office, or such other place designated by the Holder,
a certificate ("Certificate") evidence the issuance of such Common Stock to
which the Holder is entitled upon such Conversion, together with any cash
amounts payable in lieu of the issuance of a fraction of a share of Common
Stock.
(ii) Provided that Holder delivers the original Conversion Notice
and the original Series A Preferred Stock Certificates within two (2) business
days of the initial delivery of the Conversion Notice to the Company by telecopy
or otherwise, as provided above, Conversion shall be deemed to be effective on
the date of such initial delivery of the Conversion Notice. Otherwise,
Conversion shall be deemed to be effective on the date the Company receives the
original Conversion Notice and the original certificates for the Series A
Preferred Stock. Thereafter, the Holder shall be treated for all purposes as the
record holder of such securities as of the date of conversion. Any shares of
Series A Preferred Stock so converted shall be retired and canceled and shall
not be reissued, and the Corporation may from time to time take such appropriate
action as may be necessary to reduce the authorized Series A Preferred Stock
accordingly. Under certain circumstances, the Company shall be obligated to make
a late payment to Holder as set forth in Section 5.03 of the Securities Purchase
Agreement between the Company and the purchasers of the Series A Preferred Stock
(the "Securities Purchase Agreement").
(iii) The Corporation shall at all times when the Series A
Preferred Stock is outstanding, reserve and keep available out of its authorized
but unissued stock, for the purpose of effecting the conversion of the Series A
Preferred Stock, such number of its duly authorized shares of Common Stock (not
less than 5,000,000 shares, as such number may be adjusted as a result of stock
splits, stock dividends, and similar events) as shall from time to time be
sufficient to effect the conversion of all outstanding Series A Preferred Stock.
Before taking any action which would cause an adjustment reducing the Conversion
Price below the then par value of the shares of Common Stock issuable upon
conversion of the Series A Preferred Stock, the Corporation will take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Corporation may validly and legally issue fully paid and nonassessable
shares of Common Stock at such adjusted Conversion Price.
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(iv) No Holder shall have a right to convert any Series A
Preferred Stock of the Company so long as and to the extent that at the time of
such conversion, such conversion or exercise would cause the Holder then to be
the "beneficial owner" of five percent (5%) or more of the Company's then
outstanding Common Stock. For the purpose hereof, the term "beneficial owner"
shall have the meaning ascribed to it in Section 13(d) of the Securities
Exchange Act of 1934. The opinion of legal counsel to each Holder, in form and
substance satisfactory to the Company and the Company's counsel, shall prevail
in all matters relating to the amount of such Holder's beneficial ownership.
(d) Adjustment of Conversion Price and Redemption Trigger Price.
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The number and kind of securities issuable upon conversion of the
Series A Preferred Stock and the Conversion Price (as well as the Redemption
Trigger Price) shall be subject to adjustment from time to time upon the
occurrence of certain events, as follows:
(i) Reclassification or Merger. In case of any reclassification
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or change of outstanding securities of the shares of the Company's Common Stock
issuable upon conversion of the Series A Preferred Stock (other than a change in
par value, or from par value to no par value, or from no par value to par value)
or in case of any merger of the Company with or into another corporation (other
than a merger with another corporation in which the Company is a continuing
corporation and which does not result in any reclassification or change of
outstanding securities issuable upon conversion of the Series A Preferred
Stock), or in case of any sale of all or substantially all of the assets of the
Company, the Company shall as condition precedent to such transaction, provide a
new class of Preferred Stock with terms as stated herein, but providing that the
Holder of the Series A Preferred Stock shall have the right to exchange each
share of Holder's Series A Preferred Stock for a share of such new class of
Preferred Stock (the "New Class"), and upon such exchange to have the right to
receive, upon conversion of the shares of the New Class, proportionately
equivalent shares of Common Stock, other securities, money and property. Shares
of the New Class shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided in this section
4(d). The provisions of this section 4(d) shall similarly apply to successive
reclassifications, changes, mergers and sales of assets.
(ii) Subdivision or Combination of Shares. If the Company at any
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time while the Series A Preferred Stock remains outstanding shall subdivide or
combine its Common Stock, the Conversion Price and the Redemption Trigger Price
shall be proportionately decreased in the case of a subdivision or increased in
the case of a combination.
(iii) Stock Dividends. If the Company at any time while the
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Series A Preferred Stock is outstanding shall pay a dividend with respect to
Common Stock payable in, or make any other distribution with respect to Common
Stock (except any distribution specifically provided for in the foregoing
sections 4(d)(i) and 4(d)(ii) of, Common Stock, then the
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Conversion Price and the Redemption Trigger Price shall be adjusted, from and
after the date of determination of shareholders entitled to receive such
dividend or distribution, to that price determined by multiplying the Conversion
Price or the Redemption Trigger Price, as the case may be, in effect immediately
prior to such date of determination by a fraction (a) the numerator of which
shall be the total number of shares of Common Stock outstanding immediately
prior to such dividend or distribution, and (b) the denominator of which shall
be the total number of shares of Common Stock outstanding immediately after such
dividend or distribution.
(e) Notice of Adjustments.
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Whenever the Conversion Price and the Redemption Trigger Price
shall be adjusted pursuant to paragraph 4(d) hereof, the Company shall make a
certificate signed by its chief financial officer setting forth, in reasonable
detail, the event requiring the adjustment, the amount of the adjustment, the
method by which such adjustment was calculated, and the Warrant Price or Prices
after giving effect to such adjustment, and shall cause copies of such
certificate to be mailed by first class mail, postage prepaid, to Holder.
5. Redemption by the Company.
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(a) If the Company receives a request to convert all or any
portion of the shares of Series A Preferred Stock and the Conversion Price is
less than $1.50 per share (the "125% Redemption Trigger Price"), the Company
shall have the right to decline to convert some or all of the Series A Preferred
Stock for which Conversion is attempted and instead redeem such portion by
payment of 125% (the "Redemption Amount") of (i) the purchase price paid by
Holder thereof and (ii) accrued but unpaid dividends on such portion. In such
events, the Company shall notify the Holder, no later than three (3) business
days after the attempted Conversion, of the Company's intent to effect such
redemption. At its expense, the Company shall, no later than three (3) business
days thereafter, issue and deliver to the Holder at the Company's principal
office or at such other place designated by the Holder, the Redemption Amount by
a bank draft for immediately available funds. Under certain circumstances, the
Company shall be obligated to make a late delivery payment to Holder as set
forth in Section 5.03 of the Securities Purchase Agreement.
(b) If the shares of the Company's Common Stock underlying the
Series A Preferred Stock have not been registered by the first anniversary of
the Securities Purchase Agreement, then at any time thereafter any Holder may,
by notice to the Company require the Company to redeem up to Holder's pro rata
portion (based on the portion of the Preferred Stock he then owns) of 2,000,000
shares of the Series A Preferred Stock. Such shares shall be redeemed for cash
equal to 125% (the "Non-Approval Redemption Amount")of (i) the price paid by
Holder thereof and (ii) and accrued but unpaid dividends on such portion and
payment of such amount shall be made within three (3) business days after the
date of such notice.
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6. Notice of Certain Actions. In the event that the Company shall
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propose at any time:
(a) to declare any dividend or distribution upon any class or series
of its stock, whether in cash, property, stock or other securities, whether or
not a regular cash dividend and whether or not out of earnings or earned
surplus;
(b) to offer for subscription pro rata to the holders of any class or
series of its stock any additional shares of stock of any class or series or
other rights;
(c) to effect any reclassification or recapitalization of its Common
Stock outstanding involving a change in the Common Stock; or
(d) to merge or consolidate with or into any other corporation, or
sell, lease or convey all or substantially all its assets or property, or to
liquidate, dissolve or wind up, whether voluntary or involuntary;
then in connection with each such event, the Company shall send to Holder:
(i) at least 10 days prior written notice of the date on which a
record shall be taken for such dividend, distribution or subscription rights
(and specifying the date on which the holders of Common Stock shall be entitled
thereto) or for determining rights to vote in respect of the matters referred to
in (i) and (ii) above;
(ii) in the case of the matters referred to in (iii) and (iv)
above, at least 10 days prior written notice of the date for the determination
of shareholders entitled to vote thereon (and specifying the date on which the
holders of Common Stock shares shall be entitled to exchange their Common Stock
for securities or other property deliverable upon the occurrence of such event);
and
(iii) prompt notice of any material change in the terms of the
transaction described in (a) through (d) above.
7. Issuance of Additional Securities, etc. For so long as any shares of
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Series A Preferred Stock are outstanding, without the written consent or
affirmative vote of the holders of a majority of the then outstanding Series A
Preferred Stock, given in writing or by vote at a meeting, the Corporation shall
not:
(a) increase the authorized amount of Series A Preferred Stock or
increase the authorized amount of any additional class or series of shares of
stock, unless the same is subordinate to the rights and preferences of the
Series A Preferred Stock; or
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(b) authorize or issue any convertible debt or any additional class
or series of shares of stock unless the same is subordinate to the rights and
preferences of the Series A Preferred Stock; or
(c) amend its Articles of Incorporation or Bylaws in any manner which
would impair the rights or interests of the holders of shares of Series A
Preferred Stock or amend, alter or repeal in any respect the rights,
preferences, privileges and other terms and conditions of the Series A Preferred
Stock, except for a reduction in the authorized number of shares of Series A
Preferred Stock to not less than the number then outstanding.
ATTEST: IMAGEMATRIX CORPORATION
By: /s/ Blair W. McNea By: /s/ Gerald E. Henderson
_____________________ _______________________________
Secretary Gerald E. Henderson, President
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