CERTIFICATE OF DESIGNATION

OF RIGHTS, PREFERENCES AND PRIVILEGES OF

SERIES A PREFERRED STOCK

OF

SAFETY QUICK LIGHTING & FANS CORP.

 

Pursuant to Sections 607.0601 and 607.0602 of the Florida Statutes, Safety Quick
Lighting & Fans Corp., a corporation organized and existing under laws of the
State of Florida (the “Company”), does hereby submit the following:

 

WHEREAS, pursuant to the Company’s Articles of Incorporation, dated November 16,
2012, the Company has 500,000,000 shares of common stock, no par value per share
(“Common Stock”), and 20,000,000 shares of preferred stock, no par value (the
“Preferred Stock”), outstanding, and the Company’s Board of Directors is
authorized to issue and establish one or more series of the Preferred Stock and
to fix the designation, rights, preferences, powers, restrictions and
limitations thereof;

 

WHEREAS, no series of the Preferred Stock has been designated, and no shares of
Preferred Stock have heretofore been issued; and

 

WHEREAS, it is the desire of the Company, its Board of Directors, and a majority
of its shareholders to establish and fix the number of shares to be included in
a new series of Preferred Stock and the designation, rights, preferences and
limitations of the shares of such new series.

 

NOW, THEREFORE, BE IT RESOLVED, that, pursuant to the authority conferred upon
as of June 8, 2016, the Company’s Board of Directors and an absolute majority of
the Company’s voting shareholders of record as of June 1, 2016 do hereby provide
for the issuance of a series of Preferred Stock and to establish and fix and
herein state and express, by this Certificate of Designation (the “Certificate
of Designation”), the designation, rights, preferences, powers, restrictions and
limitations of such series of Preferred Stock as follows:

 

1.DESIGNATION AND AMOUNT. There shall be a series of Preferred Stock that shall
be designated as “Series A Convertible Preferred Stock” (the "Series A Preferred
Stock") and the number of shares (the “Shares”) constituting such series shall
be 20,000,000. The rights, preferences, powers, restrictions and limitations of
the Series A Preferred Stock shall be as set forth herein.

 

2.ISSUANCE OF SHARES. Each Share of Series A Preferred Stock shall be issuable
only to the holders of the Company’s Secured Convertible Promissory Notes issued
on November 26, 2013, May 8, 2014 or June 25, 2014 (the “Notes”) who have
amended their Notes outstanding to be convertible into the Series A Preferred
Stock, pursuant to a written election by such holder, at a conversion price of
USD $0.25 per Share based on the original purchase price of the one or more
Note(s) issued to the holder thereof, plus any accrued but unpaid interest or
amounts due in connection therewith (in the aggregate, the “Note Balance”).

 

3.INTEREST.

 

(a)    Interest. From and after the date of issuance of any Share, cumulative
interest on such Share shall accrue, whether or not declared by the Board and
whether or not there are funds legally available for the payment of interest, on
a monthly basis at the rate of 6% per annum on the sum of the Liquidation Value
thereof plus all unpaid accrued and accumulated interest thereon. All accrued
interest on any Share shall be paid in cash to the holder thereof quarterly,
with the first such payment due beginning on September 30, 2016 and payable on
the last day of the month of each calendar quarter thereafter.

 

 

 

 

(b)   Priority. All accrued and accumulated interest on the Shares shall be
prior and in preference to any dividend or interest on any Junior Securities and
shall be fully declared and paid before any dividends are declared and paid, or
any other distributions or redemptions are made, on any Junior Securities, other
than to (i) declare or pay any dividend or distribution payable on the Common
Stock in shares of Common Stock or (ii) repurchase Common Stock held by
employees or consultants of the Corporation upon termination of their employment
or services pursuant to agreements providing for such repurchase.

 

4.RANK AND LIQUIDATION.

 

(a)    Rank. With respect to payment of dividends and distribution of assets
upon liquidation, dissolution or winding up of the Company, whether voluntary or
involuntary, all Shares of the Series A Preferred Stock shall rank senior to all
Common Stock and any other class of securities that is specifically designated
as junior to the Series A Preferred Stock (“Junior Securities”).

 

(b)   Liquidation. In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the holders of Shares of Series A
Preferred Stock then outstanding shall be entitled to be paid out of the assets
of the Company available for distribution to its shareholders, before any
payment shall be made to the holders of Junior Securities by reason of their
ownership thereof, an amount in cash equal to the aggregate Liquidation Value
(as defined below), plus all unpaid accrued and accumulated dividends on all
such Shares (whether or not declared). In the event that the funds are not
sufficient to pay out the full Liquidation Value to all holders of Shares of
Series A Preferred Stock, the Liquidation Value shall be paid to such holders
pro rata based each holder’s Liquidation Value relative to the Liquidation Value
of all holders of Shares of Series A Preferred Stock.

 

(c)    “Liquidation Value” means, with respect to a holder of Shares, the
aggregate value of the Note Balance converted by such holder into Shares of
Series A Preferred Stock.

 

5.CONVERSION RIGHTS.

 

(a)    Elective Conversion. Each Share of Series A Preferred Stock shall be
convertible at any time by the holder thereof into one (1) share of Common
Stock.

 

(b)   Effect of Conversion. All Shares of Series A Preferred Stock converted as
provided herein shall no longer be deemed issued and outstanding as of the
effective time of the applicable conversion, and all rights with respect to such
Shares shall immediately cease and terminate as of such time, other than the
right of the holder to receive shares of Common Stock in exchange therefor.

 

6.VOTING RIGHTS. Each Share of Series A Preferred Stock shall have no right to
vote on any matter to be submitted for a vote to shareholders of the Company.

 

7.ADJUSTMENT. In the event that the Company shall, at any time after the
issuance of any Share of Series A Preferred Stock, (a) declare any dividend on
Common Stock payable in shares of Common Stock, (b) subdivide or effectuate any
stock-split of the outstanding Common Stock or (c) combine or recapitalize the
outstanding Common Stock into a different number of shares, then in each such
case the Company shall simultaneously effect a proportional adjustment to the
number of outstanding Shares of Series A Preferred Stock.

 

 

 

 

8.CONSOLIDATION, MERGER, ETC. In the event the Company enters into any
consolidation, merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case the Shares of Series A
Preferred Stock shall at the same time be similarly exchanged or changed into
preferred stock of the surviving Company with the same rights and preferences as
the Series A Preferred Stock.

 

9.WAIVER. Any of the rights, powers, preferences and other terms of the Series A
Preferred Stock set forth herein may be waived on behalf of a holder of Shares
in its sole discretion.

 

10.REPURCHASE AND PUT OPTION.

 

(a)    Repurchase Notice. The Company may, at any time after the issuance of any
Share of Series A Preferred Stock, by providing 30 day’s prior written notice to
all holders of the Shares (a “Repurchase Notice”), repurchase some or all of the
Shares outstanding from the holders thereof at a purchase price of USD $3.50 per
Share (the “Repurchase Price”). Any Repurchase Notice for less than the full
number of Shares issued and outstanding shall be for purchase pro rata, based
each holder’s number of Shares outstanding relative to the aggregate number of
Shares outstanding.

 

(b)   Repurchase Period. Each holder of Shares must sell to the Company the
number of Shares specified in a Repurchase Notice on the date set forth therein,
such date being no less than thirty (30) days following the date of such
Repurchase Notice (the “Repurchase Period”), except where the Shares subject to
the Repurchase Notice are converted, by election or automatically, into Common
Stock prior to the end of the Repurchase Period and such holder thereafter no
longer holds Shares of Series A Preferred Stock.

 

(c)    Put Option. Any holder of Shares may, at any time after the issuance of
any Share of Series A Preferred Stock, by providing a written request to the
Company, require the Company to purchase some or all such holder’s Shares
outstanding at a purchase price of USD $0.25 per Share, and the Company shall
promptly purchase the number of Shares so specified and owned by the holder
thereof.

 

(d)   Effect of Repurchase. All Shares of Series A Preferred Stock repurchased
or purchased by the Company as provided in this Section 10 shall no longer be
deemed issued and outstanding as of the effective time of the applicable
repurchase or purchase, and all rights with respect to such Shares shall
immediately cease and terminate as of such time.

 

11.ASSIGNMENT. Each holder of Shares of Series A Preferred Stock shall be
entitled to transfer some or all of its Shares to one or more affiliated
partnerships or funds managed by it or any of such holder’s respective
directors, officers or partners; provided, however, that any such transferee
agrees in writing to be subject to the identical terms of any conversion and/or
related agreements entered into by the holder thereof in connection with the
issuance of the transferred Shares.

 

 

 

 

12.AMENDMENT. No provision of this Certificate of Designation may be amended,
modified or waived except by an instrument in writing executed by the Company
and the holders of a majority of Shares of Series A Preferred Stock, and any
such written amendment, modification or waiver will be binding upon the Company
and each holder of Series A Preferred Stock; provided, that no such action shall
change or waive (a) the definition of Liquidation Value, (b) the rate at which
or the manner in which interest on the Series A Preferred Stock accrues or
accumulates, (c) the Repurchase Price, or (d) this Section 12, without the prior
written consent of holders of at least seventy-five (75%) of all outstanding
Shares of Series A Preferred Stock.

 

IN WITNESS WHEREOF, this Certificate of Designation is executed on behalf of the
Company by its Chief Executive Officer on July 27, 2016.

 

 

/s/ John P. Campi

John P. Campi, Chief Executive Officer