Exhibit 3.1
CERTIFICATE OF DESIGNATION
OF THE RIGHTS AND PREFERENCES
OF THE SERIES A CONVERTIBLE PREFERRED STOCK OF
GLOBAL RESOURCE CORPORATION
A NEVADA CORPORATION
The undersigned, Jimmy Villalobos and Richard Mangiarelli, hereby
certify the following:
1. We are the duly elected and acting President and Secretary,
respectively, of Global Resource Corporation, a Nevada corporation (the
"CORPORATION").
2. Pursuant to authority given by the Corporation's Articles of
Incorporation, the Board of Directors of the Corporation has duly adopted the
following recital and resolution ("RESOLUTION"):
WHEREAS, the Corporation's Articles of Incorporation, as amended,
provides that the Corporation has authorized Two Billion Fifty Million
(2,050,000,000) shares of Capital Stock, of which Two Billion (2,000,000,000)
shares are designated as Common Stock, $0.001 par value ("COMMON STOCK"), and
Fifty Million (50,0000,000) shares are designated as preferred stock, $0.001 par
value ("PREFERRED STOCK") and, further that the designation, powers,
preferences, options and other special rights and qualifications, limitations or
restrictions of the shares of Preferred Stock may be issued from time to time
one or more series, each of such series to have such voting powers, designation,
preferences, and other special rights, qualifications, limitations or
restrictions, as expressed in a resolution or resolutions providing for the
issuance of such series, as adopted by the Board of Directors of the
Corporation; and,
WHEREAS, the Corporation desires to create a series of Preferred Stock
designated as Series A Convertible Preferred Stock (the "SERIES A PREFERRED
STOCK") by filing a Certificate of Designation of the Rights and Preferences of
the Series A Preferred Stock for filing with the Nevada Secretary of State to
set forth the rights and preferences of the Series A Preferred Stock.
RESOLVED, the Board (as defined below) hereby establishes and
designates a class of Ten Million (10,000,000) shares of Preferred Stock,
designated as Series A Convertible Preferred Stock (the "SERIES A PREFERRED
STOCK"). The rights, preferences, and privileges of the Series A Preferred Stock
relative to those of the Common Stock and all outstanding shares of Preferred
Stock are set forth in this Resolution.
1. DESIGNATION. A series of Preferred Stock shall hereby be created and
designated as Series A Preferred Stock and shall consist of Ten Million
(10,000,000) shares.
2. DIVIDENDS. Holders of the Series A Preferred Stock shall not be entitled to
receive dividends or other distributions with the holders of the Common Stock.
3. CONVERSION. The holders of the Series A Preferred Stock shall have the
following conversion rights (the "CONVERSION RIGHTS"):
3.1. CONVERSION OF THE SERIES A PREFERRED STOCK. The Series A Preferred
Stock shall be convertible, without the payment of any additional consideration
by the holder thereof and at the option of the holder thereof, at any time after
the first issuance of shares of Series A Preferred Stock by the Corporation, at
the office of the Corporation or any transfer agent for the Common Stock, into
such number of fully paid and nonassessable shares of Common Stock as is
determined by dividing $0.001 (the "STATED VALUE") by the Series A Conversion
Price (determined as hereinafter provided) in effect at the time of conversion
and then multiplying such quotient by the number of shares of Series A Preferred
Stock to be converted. The Conversion Price at which shares of Common Stock
shall be deliverable upon conversion without the payment of any additional
consideration by the holder thereof shall at the time of the filing of this
Certificate initially be $0.001 (the "SERIES A CONVERSION Price"). Such initial
Series A Conversion Price shall be subject to adjustment, in order to adjust the
number of shares of Common Stock into which the Series A Preferred Stock is
convertible, as hereinafter provided.
3.2. FRACTIONAL SHARES. No fractional shares of Common Stock shall be
issued upon conversion of the Series A Preferred Stock, and the number of shares
of Common Stock to be issued shall be determined by rounding to the nearest
whole share. Such conversion shall be determined on the basis of the total
number of shares of Series A Preferred Stock the holder is at the time
converting into Common Stock and such rounding shall apply to the number of
shares of Common Stock issuable upon such aggregate conversion.
3.3. MECHANICS OF CONVERSION. Before any holder of Series A Preferred
Stock shall be entitled to convert the same into full shares of Common Stock,
such holder shall surrender the certificate or certificates therefor, endorsed
or accompanied by written instrument or instruments of transfer, in form
satisfactory to the Corporation, duly executed by the registered holder or by
such holder's attorney duly authorized in writing, at the office of the
Corporation or of any transfer agent for the Common Stock, and shall give at
least five (5) days' prior written notice to the Corporation at such office that
such holder elects to convert the same. The Corporation shall, as soon as
practicable thereafter, issue and deliver at such office to such holder of
Series A Preferred Stock a certificate or certificates for the number of shares
of Common Stock to which such holder shall be entitled as aforesaid. Such
conversion shall be deemed to have been made immediately prior to the close of
business on the date of such surrender of the shares of Series A Preferred Stock
to be converted, and the person or persons entitled to receive the shares of
Common Stock issuable upon conversion shall be treated for all purposes as the
record holder or holders of such shares of Common Stock on such date. From and
after such date, all rights of the holder with respect to the Series A Preferred
Stock so converted shall terminate, except only the right of such holder, upon
the surrender of his, her or its certificate or certificates therefor, to
receive certificates for the number of shares of Common Stock issuable upon
conversion thereof.
3.4. CERTAIN ADJUSTMENTS TO CONVERSION PRICE FOR STOCK SPLITS, DIVIDENDS,
MERGERS, REORGANIZATIONS, ETC.
A. ADJUSTMENT FOR STOCK SPLITS, STOCK DIVIDENDS AND COMBINATIONS OF
COMMON STOCK. In the event the outstanding shares of Common Stock shall, after
the filing of this Certificate be further subdivided (split) by reclassification
or otherwise, or in the event of any dividend or other distribution payable on
the Common Stock in shares of Common Stock, the Series A Conversion Price and in
effect immediately prior to such subdivision, dividend or other distribution
shall, concurrently with the effectiveness of such subdivision, dividend or
other distribution, be proportionately adjusted. In the event the outstanding
shares of Common Stock shall, after the filing of this Certificate be further
combined (reverse split) by reclassification or otherwise, the Series A
Conversion Price and in effect immediately prior to such combination shall not
be adjusted.
2
B. ADJUSTMENT FOR MERGER OR REORGANIZATION, ETC. In the event of a
reclassification, reorganization or exchange (other than described in subsection
3.4(A) above) or any merger, acquisition, consolidation or reorganization of the
Corporation with another Corporation, each share of Series A Preferred Stock
shall thereafter be convertible into the number of shares of stock or other
securities or property to which a holder of the number of shares of Common Stock
of the Corporation deliverable upon conversion of the Series A Preferred Stock
would have been entitled upon such reclassification, reorganization, exchange,
consolidation, merger or conveyance had the conversion occurred immediately
prior to the event; and, in any such case, appropriate adjustment (as determined
by the Board) shall be made in the application of the provisions herein set
forth with respect to the rights and interests thereafter of the holders of the
Series A Preferred Stock, to the end that the provisions set forth herein
(including provisions with respect to changes in and other adjustments of the
applicable Series A Conversion Price) shall thereafter be applicable, as nearly
as reasonably may be, in relation to any shares of stock or other property
thereafter deliverable upon the conversion of the Series A Preferred Stock.
C. ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS. In the event
the Corporation, upon approval of at least seventy-five percent (75%) of the
holders of the Series A Preferred Stock, at any time or from time to time after
the filing of this Certificate, makes, or fixes a record date for the
determination of holders of Common Stock entitled to receive, a dividend or
other distribution payable in securities of the Corporation other than shares of
Common Stock, then and in each such event, provision shall be made so that the
holders of Series A Preferred Stock shall receive upon conversion thereof, in
addition to the number of shares of Common Stock receivable thereupon, the
amount of securities of the Corporation which they would have received had their
Series A Preferred Stock been converted into Common Stock on the date of such
event and had they thereafter, during the period from the date of such event to
and including the conversion date, retained such securities receivable by them
as aforesaid during such period, subject to all other adjustments called for
during such period under this Section 3.4 with respect to the rights or the
holders of the Series A Preferred Stock.
D. DURATION OF ADJUSTED CONVERSION PRICE. Following each computation
or readjustment of an adjusted Series A Conversion Price as provided above in
this Section 3, the new adjusted Series A Conversion Price shall remain in
effect until a further computation or readjustment thereof is required by this
Section 3.
E. OTHER ACTION AFFECTING COMMON STOCK. In case, after the filing of
this Certificate, the Corporation shall take any action affecting its shares of
Common Stock, other than an action described above in this Section 3, which in
the good faith opinion of the Board would have a materially adverse effect upon
the conversion rights of the Series A Preferred Stock granted herein, the Series
A Conversion Price shall be adjusted in such manner and at such time as the
Board may in good faith determine to be equitable in the circumstances.
3
3.5. NOTICES OF RECORD DATE. In the event of any taking by the Corporation
of a record of the holders of any class of securities for the purpose of
determining the holders thereof who are entitled to receive any dividend (other
than a cash dividend which is the same as cash dividends paid in previous
quarters) or other distribution, any capital reorganization of the Corporation,
any reclassification or recapitalization of the Corporation's capital stock, any
consolidation or merger with or into another Corporation, any transfer of all or
substantially all of the assets of the Corporation or any dissolution,
liquidation or winding up of the Corporation, the Corporation shall mail to each
holder of Series A Preferred Stock at least ten (10) days prior to the date
specified for the taking of a record, a notice specifying the date on which any
such record is to be taken for the purpose of such dividend or distribution.
3.6. COMMON STOCK RESERVED. The Corporation shall reserve and keep
available out of its authorized but unissued Common Stock such number of shares
of Common Stock as shall from time to time be sufficient to effect (a)
conversion of the Series A Preferred Stock and (b) issuance of Common Stock
pursuant to any outstanding option, warrant or other rights to acquire Common
Stock, and if at any time the number of authorized but unissued shares of common
stock shall not be sufficient to effect the conversion of all then outstanding
shares of the Series A Preferred Stock, the Corporation will take such corporate
action as may, in the opinion of its counsel, be necessary to increase its
authorized but unissued shares of Common Stock to such number of shares as shall
be sufficient for such purpose, including, without limitation, engaging in best
efforts to obtain the requisite stockholder approval of any necessary amendment
to this Certificate or the Corporation's Articles of Incorporation.
3.7. PAYMENT OF TAXES. The Corporation will pay all taxes (other than
taxes based upon income) and other governmental charges that may be imposed with
respect to the issue or delivery of shares of Common Stock upon conversion of
shares of Series A Preferred Stock, other than any tax or other charge imposed
in connection with any transfer involved in the issue and delivery of shares of
Common Stock in a name other than that in which the shares of Series A Preferred
Stock so converted were registered.
3.8. NO IMPAIRMENT. The Corporation will not, by amendment of its Articles
of Incorporation, this Certificate of Designation, or through any reorganization
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms to be observed or performed hereunder by the
Corporation, but will at all times in good faith assist in the carrying out of
all the provisions of this Section 3 and in the taking of all such action as may
be necessary or appropriate in order to protect the Conversion Rights of the
holders of the Series A Preferred Stock against impairment.
3.9. CERTIFICATE AS TO ADJUSTMENTS. Upon the occurrence of each adjustment
or readjustment of the Conversion Price of the Series A Preferred Stock pursuant
to this Section 3, the Corporation at its expense shall promptly compute such
adjustment or readjustment in accordance with the terms hereof and furnish to
each holder of Series A Preferred Stock a certificate setting forth such
adjustment or readjustment and the calculation on which such adjustment or
readjustment is based. The Corporation shall, upon the written request at any
time of any holder of Series A Preferred Stock, furnish or cause to be furnished
to such holder a like certificate setting forth (i) such adjustments and
readjustments, and (ii) the number of shares of Common Stock and the amount, if
any, of other property which at the time would be received upon the conversion
of the Series A Preferred Stock.
4
4. LIQUIDATION. In the event of any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary (a "LIQUIDATION"), the assets
of the Corporation available for distribution to its stockholders shall be
distributed pro rata to the holders of the Series A Preferred Stock and Common
Stock (in the case of the Series A Preferred Stock, on an "as converted" basis
into Common Stock).
5. VOTING RIGHTS.
5.1. GENERAL. At all meetings of the stockholders of the Corporation and
in the case of any actions of stockholders in lieu of a meeting, each holder of
the Series A Preferred Stock shall have no voting rights on matters submitted to
the stockholders, except as otherwise expressly provided herein or as required
by law, in which case, except as may be otherwise provided by law, the holders
of the Series A Preferred Stock and the holders of the Common Stock shall vote
together as a single class, with each holder of Series A Preferred Stock having
a number of votes that is equal to the number of whole shares of Common Stock
into which such holder's shares of Series A Preferred Stock are then
convertible, as provided in Section 3, at the record date for the determination
of the stockholders entitled to vote on such matters or, if no such record date
is established, at the date such vote is taken or any written consent of such
stockholders is effected. Each holder of Series A Preferred Stock shall be
entitled to notice of any meeting of the stockholders in accordance with the
Bylaws of the Corporation.
5.2. ELECTION OF DIRECTORS.
A. ALLOCATION OF BOARD SEATS.
(i) The Corporation shall not, without the affirmative vote of the
holders of at least a majority of the then outstanding Series A Preferred Stock,
increase the maximum number of directors constituting the Board to a number
other than six (6) or otherwise alter the Board seat allocation set forth below
in this Section 5.2.
(ii) The holders of a majority of the then outstanding Series A
Preferred Stock, voting together as a single class, shall have the right to
elect four (4) of the six (6) members of the Board (the "SERIES A PREFERRED
DIRECTORS"). Any Series A Preferred Director may be removed only be the
affirmative vote of the holders of a majority of the then outstanding Series A
Preferred Stock.
B. QUORUMS. At any meeting held for the purpose of electing Series A
Preferred Directors, the presence in person or by proxy of the holders of a
majority of the aggregate number of shares of the Series A Preferred Stock then
outstanding shall constitute a quorum for the election of such directors. At any
meeting held for the purpose of electing directors other than Series A Preferred
Directors, the presence in person or by proxy of the holders of a majority of
the aggregate number of shares of the Series A Preferred Stock then outstanding
(on an as-if-converted to Common Stock basis) and the Common Stock then
outstanding shall constitute a quorum for the election of such directors.
C. VACANCIES. A vacancy in any directorship (i) elected by the
holders of the Series A Preferred Stock shall be filled only by vote of the
holders of the Series A Preferred Stock as provided above, and (ii) elected by
the holders of the Series A Preferred Stock and Common Stock voting together as
a single class shall be filled only by the vote of the holders of the Series A
Preferred Stock and Common Stock voting together as a single class.
5
6. REGISTRATION OF STOCK ISSUABLE UPON CONVERSION. The Corporation shall cause
to be registered with the Securities and Exchange Commission all shares of
Common Stock into which the Series A Preferred Stock are convertible so that the
holders of Series A Preferred Stock shall, at the time of conversion, receive
registered shares of Common Stock. The Corporation shall bear all expense
necessary with registering such shares of Common Stock and shall cause such
registration to be in effect before the eligible conversion date hereinabove
stated. This provision may be waived by the affirmative vote of eighty percent
(80%) of the then outstanding shares of Series A Preferred Stock (voting as a
separate class).
7. OTHER RESTRICTIONS. There shall be no conditions or restrictions upon the
creation of indebtedness of the Corporation, or any subsidiary or upon the
creation of any other series of Preferred Stock with any other preferences.
8. OTHER PREFERENCES. The holders of the Series A Preferred Stock shall no other
preferences, rights, restrictions, or qualifications, except as otherwise
provided by law or the Articles of Incorporation of the Corporation.
9. REISSUANCE. No share or shares of Series A Preferred Stock acquired by the
Corporation by reason of conversion or otherwise shall be reissued as Series A
Preferred Stock, and all such shares thereafter shall be returned to the status
of undesignated and unissued shares of Preferred Stock of the Corporation.
10. NOTICES. Unless otherwise specified in the Corporation's Articles of
Incorporation or Bylaws, all notices or communications given hereunder shall be
in writing and, if to the Corporation, shall be delivered to it as its principal
executive offices, and if to any holder of Series A Preferred Stock, shall be
delivered to it at its address as it appears on the stock books of the
Corporation.
The undersigned, being the President and Secretary of Global Resource
Corporation hereby certify and declare under penalty of perjury that that the
foregoing Resolution is the act and deed of the Corporation and that the facts
herein stated are true, authorized by the unanimous written consent of the Board
of Directors on November 30, 2004.
GLOBAL RESOURCE CORPORATION
By: /s/ Jimmy Villalobos
-----------------------------------------
Jimmy Villalobos
President
By: /s/ Richard D. Mangiarelli
----------------------------------------
Richard D. Mangiarelli
Secretary