ex31.htm


    


    Exhibit
4.1

    


    CERTIFICATE
OF DESIGNATION, PREFERENCES AND RIGHTS OF

    SERIES
A CONVERTIBLE PREFERRED STOCK

     

    The
undersigned, the Chief Executive Officer of WaterPure International Inc.., a
Florida corporation (the "Company"), in accordance with the provisions of the
Florida Business Corporation Act (the "Florida Law"), does hereby certify that,
pursuant to the authority conferred upon the Board of Directors by the Articles
of Incorporation of the Company, as amended, and pursuant to Section 607.0602
and following Sections of the Florida Law, the following resolution creating a
series of Convertible Preferred Stock, was duly adopted on October 21,
2009:

    


    RESOLVED,
that pursuant to the authority expressly granted to and vested in the Board of
Directors of the Company by provisions of the Articles of Incorporation of the
Company, as amended (the "Articles of Incorporation"), there hereby is created
out of the shares of Preferred Stock, $.001 par value, of the Company authorized
in the Articles of Amendment of the Articles of Incorporation, filed with the
Secretary of State of the State of Florida on March 19, 2009 (the "Preferred
Stock,"), a series of Preferred Stock of the Company, to be named "Series A
Convertible Preferred Stock," consisting of One Hundred (100) shares, which
series shall have the following designations, powers, preferences and relative
and other special rights and the following qualifications, limitations and
restrictions:

    


    1.           Designation; Number of
Shares. The designation of said series of Preferred Stock shall be Series
A Convertible Preferred Stock (the "Series A Preferred Stock").  The
number of shares of Series A Preferred Stock shall be 100.  The shares
of Series A Preferred Stock shall be issued as full shares and shall have a par
value of $.001 per share.  The Series A Preferred Stock shall rank (i)
prior to the common stock, $.0001 par value (the "Common Stock"), and to all
other classes and series of equity securities of the Company which by their
terms do not rank senior to the Series A Preferred Stock ("Junior Stock") and
(ii) junior to any class or series of equity securities which by its terms shall
rank senior to the Series A Preferred Stock.  The Series A Preferred
Stock shall be subordinate to and rank junior to all indebtedness of the Company
now or hereafter outstanding.

    


    
      2.   Dividends. The
holders of record of shares of Series A Preferred Stock (each a "Holder" and
collectively, the "Holders") shall be entitled to receive, out of any assets at
the time legally available therefor, dividends at the rate of six percent (6%)
of the Stated Value (as defined below) per share per annum (the "Dividend Payment"),
payable semi-annually (June 30 and December 31) at the option of the Holder in
cash or in shares of Common Stock.  In the case of shares of Series A
Preferred Stock outstanding for less than a semi-annual period, dividends shall
be pro rated based on the portion of each semi-annual period during which such
shares of Series A Preferred Stock are outstanding. Dividends on the Series A
Preferred Stock shall be cumulative if funds are not legally available for
payment on a semi-annual basis, and shall accrue and be payable at the end of
the next semi-annual period during which the Company does have funds legally
available for such payment.  In the event the Holder determines to
accept the Dividend Payment in shares of Common Stock, such shares of Common
Stock shall be issued at the Conversion Price (as defined below).  For
purposes hereof, the term “Stated Value” shall mean $2,500.00 per share, subject
to appropriate adjustment in the event of any stock dividend, stock split, stock
distribution or combination, subdivision, reclassification or other corporate
actions having similar effect with respect to the Series A Preferred
Stock.

    

     

    
      
        
        

      

      
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    3.           Royalty Payment. The
Holders shall be entitled to receive a royalty payment of $.16 per share (the
“Royalty
Payment”) for each atmospheric water generator sold by the
Company.  Royalty Payments will be due to the Holders on the 15th and
last day of each month for all sales made in the prior semi-monthly
period.

    


    4.           Optional Conversion.
Subject to paragraph (h) hereof, each share of Series A Preferred Stock may be
converted at any time, at the option of the Holder thereof, into the number of
fully-paid and no assessable shares of Common Stock obtained by dividing the
Stated Value by the Conversion Price then in effect.

    


    (a)           The
initial conversion price, subject to adjustment as provided herein, is equal to
$0.01 (the “Conversion
Price”).  The Conversion Price in effect is subject to
adjustment as hereinafter provided.

    


    (b)           No
fractional shares of Common Stock shall be issued upon conversion of the Series
A Preferred Stock, and in lieu thereof the number of shares of Common Stock to
be issued for each share of Series A Preferred Stock converted shall be rounded
down to the nearest whole number of shares of Common Stock.  Such
number of whole shares of Common Stock to be issued upon the conversion of one
share of Series A Preferred Stock shall be multiplied by the number of shares of
Series A Preferred Stock submitted for conversion pursuant to the Notice of
Conversion (defined below) to determine the total number of shares of Common
Stock to be issued in connection with any one particular
conversion.

    


    (c)           In
order to exercise the conversion privilege, the Holder of any shares of Series A
Preferred Stock to be converted shall surrender his or its certificate or
certificates therefore to the principal office of the transfer agent for the
Series A Preferred Stock (or if no transfer agent be at the time appointed, then
the Company at its principal office), and shall complete, execute and deliver to
the Company the conversion certificate attached hereto as Exhibit A (the “Notice
of Conversion”).  Such Notice of Conversion shall also state the name
or names (with address) in which the certificate or certificates for shares of
Common Stock which shall be issuable on such conversion shall be issued, subject
to any restrictions on transfer relating to shares of the Series A Preferred
Stock or shares of Common Stock upon conversion thereof.  If so
required by the Company, certificates surrendered for conversion shall be
endorsed or accompanied by written instrument or instruments of transfer, in
form satisfactory to the Company, duly authorized in writing.  The
date of receipt by the transfer agent (or by the Company if the Company serves
as its own transfer agent) of the certificates and notice shall be the
conversion date.  As soon as practicable after receipt of such notice
and the surrender of the certificate or certificates for Series A Preferred
Stock as aforesaid, the Company shall cause to be issued and delivered at such
office to such Holder, or on his or its written order, (i) a certificate or
certificates for the number of full shares of Common Stock issuable on such
conversion in accordance with the provisions hereof, (ii) cash or a certificate
or certificates for the number of full additional shares of Common Stock
issuable on such conversion, in either case, in respect of any dividends that
have accrued through the date of conversion with respect to such Series A
Preferred Stock, as provided in Section 2 hereof; (iii) cash in respect of any
Royalty Payments that have accrued through the date of conversion with respect
to such Series A Preferred Stock, as provided in Section 3 hereof; and (iv) if
less than all shares of Series A Preferred Stock represented by the certificate
or certificates so surrendered are being converted, a residual certificate or
certificates representing the shares of Series A Preferred Stock not
converted.

    


    
      
        
        

      

      
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    (d)           [Reserved]

     
 

    (e)           The
Company shall at all times when the Series A Preferred Stock shall be
outstanding reserve and keep available out of its authorized but unissued stock,
for the purposes of effecting the conversion of the Series A Preferred Stock,
such number of its duly authorized shares of Common Stock as shall from time to
time be sufficient to effect the conversion of all outstanding shares of Series
A Preferred Stock.  Before taking any action that 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
Company will take any corporate action that may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully-paid
and nonassessable shares of such Common Stock at such adjusted conversion
price.

    


    (f)           Upon
any such conversion, all accrued and unpaid dividends on the Series A Preferred
Stock surrendered for conversion, through and including the conversion date,
shall, at the option of the Company, be paid (i) in cash or (ii) in additional
shares of Common Stock.  In the event the Company elects to pay such
accrued and unpaid dividends in additional shares of Common Stock, the number of
shares of Common Stock to be issued in payment of the dividend with respect to
each outstanding share of Common Stock shall be determined by dividing the
amount of the dividend that would have been payable had such dividend been paid
in cash by an amount equal to the Conversion Price.

    


    (g)           All
shares of Series A Preferred Stock which shall have been surrendered for
conversion as herein provided shall no longer be deemed to be outstanding and
all rights with respect to such shares, including the rights, if any, to receive
notices and to vote, shall forthwith cease and terminate except only for the
right of the Holder thereof to receive shares of Common Stock in exchange
therefor, payment of any accrued and unpaid dividends thereon (whether in cash
or in additional shares of Common Stock).  Any shares of Series A
Preferred Stock so converted shall be retired and canceled and shall not be
reissued, and the Company may from time to time take such appropriate action as
may be necessary to reduce the authorized Series A Preferred Stock
accordingly.

    


    (h)           Notwithstanding
anything to the contrary set forth herein, the Series A Preferred Stock held by
a particular Holder shall not convert if, upon giving effect to such conversion,
the aggregate number of shares of Common Stock beneficially owned by that Holder
and its affiliates exceed 4.9% of the outstanding shares of the Common Stock
following such conversion.

    


    5.           Adjustments to Conversion
Price. The Conversion Price and number of shares of Common Stock to be
issued upon conversion shall be subject to adjustment from time to time upon the
happening of certain events while this conversion right remains outstanding, as
follows:

    


    (a)           Reclassification,
etc.  If the Company at any time shall, by reclassification or
otherwise, change the Common Stock into the same or a different number of
securities of any class or classes, the Series A Preferred Stock shall
thereafter be deemed to evidence the right to purchase an adjusted number of
such securities and kind of securities as would have been issuable as the result
of such change with respect to the Common Stock (i) immediately prior to or (ii)
immediately after such reclassification or other change at the sole election of
the Holder.

     

    
      
        
        

      

      
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    (b)           Stock Splits, Combinations
and Dividends.  If the shares of Common Stock are subdivided or
combined into a greater or smaller number of shares of Common Stock, or if a
dividend is paid on the Common Stock or any preferred stock issued by the
Company in shares of Common Stock, the Conversion Price shall be proportionately
reduced in case of subdivision of shares or stock dividend or proportionately
increased in the case of combination of shares, in each such case by the ratio
which the total number of shares of Common Stock outstanding immediately after
such event bears to the total number of shares of Common Stock outstanding
immediately prior to such event.

    


    6.           Liquidation
Rights.  In the event of any liquidation, dissolution or
winding up of the Company, whether voluntary or involuntary, Holders of Series A
Preferred Stock shall be entitled to receive an amount equal to the Stated Value
of the shares of Series A Preferred Stock, plus any accrued and unpaid
dividends. After the full preferential liquidation amount has been paid to, or
determined and set apart for the Series A Preferred Stock and all other series
of preferred stock hereafter authorized and issued, if any, the remaining assets
of the Company available for distribution to shareholders shall be distributed
ratably to the holders of the Common Stock. In the event the assets of the
Company available for distribution to its shareholders are insufficient to pay
the full preferential liquidation amount per share required to be paid to the
holders of Company’s Series A Preferred Stock, the entire amount of assets of
the Company available for distribution to shareholders shall be paid up to their
respective full liquidation amounts first to the Holders of Series A Preferred
Stock, then to any other series of preferred stock hereafter authorized and
issued, all of which amounts shall be distributed ratably among holders of each
such series of preferred stock, and the Common Stock shall receive nothing. A
reorganization or any other consolidation or merger of the Company with or into
any other corporation, or any other sale of all or substantially all of the
assets of the Company, shall not be deemed to be a liquidation, dissolution or
winding up of the Company within the meaning of this Section 6, and the Series A
Preferred Stock shall be entitled only to: (i) the rights provided in any
agreement or plan governing the reorganization or other consolidation, merger or
sale of assets transaction; (ii) the rights contained in the Florida Business
Corporation Act; and (iii) the rights contained in other Sections
hereof.

    


    7.           Voting Rights. Except
as otherwise expressly provided or required by law, the Series A Preferred Stock
shall have no voting rights. The affirmative vote of the Holders of a majority
of the issued and outstanding shares of the Series A Preferred Stock voting as a
separate class, shall be required to change the powers, preferences or special
rights of the shares of the Series A Preferred Stock in relation to the shares
of Common Stock.

    


    8.           Lost or Stolen
Certificates.  Upon receipt by the Company of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of any
certificates representing the shares of Series A Preferred Stock, and, in the
case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company and, in the case of mutilation, upon surrender and
cancellation of the certificate(s), the Company shall execute and deliver new
preferred stock certificate(s) of like tenor and date.

    


    
      
        
        

      

      
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    9.           Status of Converted
Stock. In case any shares of Series A Preferred Stock shall be converted
pursuant to Section 4 hereof, or otherwise repurchased or reacquired, the shares
so redeemed, converted or reacquired shall resume the status of authorized but
unissued shares of Preferred Stock and shall no longer be designat­ed as
Series A Preferred Stock.

    


    IN WITNESS WHEREOF, the
Company has caused this Certificate of Designation of Series A Preferred Stock
to be duly executed by its Chief Executive Officer this 21st day of October,
2009, who, by signing their names hereto, acknowledge that this Certificate of
Designation is the act of the Company and state to the best of his knowledge,
information and belief, under the penalties of perjury, that the above matters
and facts are true in all material respects.

     

     

     

    
      
        	 	
                WATERPURE
      INTERNATIONAL INC.

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Paul
      S. Lipschutz	 
	 	 	
                Paul
      S. Lipschutz

                Chief
      Executive Officer

              	 
	 	 	 	 
	 	 	 	 


      




    
      
        
        

      

      
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    EXHIBIT
A

    


    CONVERSION
CERTIFICATE

    WATERPURE
INTERNATIONAL INC.

    Series
A Convertible Preferred Stock

    


    The
undersigned holder (the “Holder”) is surrendering to WaterPure International
Inc., a Florida corporation (the “Company”), one or more certificates
representing shares of Series A Convertible Preferred Stock of the Company (the
“Preferred Stock”) in connection with the conversion of all or a portion of the
Preferred Stock into shares of Common Stock, $0.0001 par value per share, of the
Company (the “Common Stock”) as set forth below.

    


    1.           The
Holder understands that the Preferred Stock was issued by the Company pursuant
to the exemption for registration under the United States Securities Act of
1933, as amended (the “Securities Act”), provided by Regulation D promulgated
thereunder.

    


    2.         The
Holder represents and warrants that all offers and sales of the Common Stock
issued to the Holder upon such conversion of the Preferred Stock shall be made
(a) pursuant to an effective registration statement under the Securities Act,
(in which case the Holder represents that a prospectus has been delivered) (b)
in compliance with Rule 144, or (c) pursuant to some other exemption from
registration.

    


    Number of
Shares of Preferred Stock being
Converted:_____________________________                                                                                                             

    


    Applicable
Conversion
Rate:_________________________________________________                                                                                               

    


    Number of
Shares of Common Stock To be
issued:________________________________                                                                                                   

    


    Conversion
Date:_________________________________________________________                                                                                                   

    


    
      	
               
      

            	
              Delivery
      instructions for certificates of Common Stock and for new certificates
      representing any remaining shares of Preferred
  Stock:

            


    

     

      
        

      

      
        

        

      

    

     

     

    
      

    

    Name of
Holder - Printed

     

     

    
      
        

      

    

    Signature
of Holder