Exhibit 10.1


 


 


 


REDHAWK HOLDINGS CORP.


CERTIFICATE OF DESIGNATION 


OF


SERIES A PREFERRED STOCK


 


Section 1. Definitions.
For the purposes hereof, the following terms shall have the following meanings:


   


“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.


  


“Common
Stock” means the Company’s common stock, par value $0.001 per share, and stock of any other class of securities
into which such securities may hereafter be reclassified or changed.


 


“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other
instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Stock.


 


“Company”
shall mean RedHawk Holdings Corp., a Nevada corporation.


 


“Conversion
Date” shall have the meaning set forth in Section 6(a).


 


“Conversion
Rate” shall have the meaning set forth in Section 6(b).


 


“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Series A Preferred
in accordance with the terms hereof.


 


“Holder”
shall have the meaning given such term in Section 2.


 


“Junior
Securities” means the Common Stock and all other Common Stock Equivalents of the Company other than those securities
which are explicitly senior or pari passu to the Series A Preferred in dividend rights or liquidation preference.


 


“Liquidation”
shall have the meaning set forth in Section 5.


 


“Notice
of Conversion” shall have the meaning set forth in Section 6(a).


 


“Original
Issue Date” means the date of the first issuance of the Series A Preferred shares in question regardless of the
number of transfers of any particular shares of Series A Preferred and regardless of the number of certificates which may be
issued to evidence such Series A Preferred. 


 






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“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.


 


“Series
A Preferred” shall have the meaning set forth in Section 2.


 


“Securities”
means the Series A Preferred and the Underlying Shares.


 


“Share
Delivery Date” shall have the meaning set forth in Section 6(c)(i).


 


“Stated
Value” shall have the meaning set forth in Section 2, as the same may be increased from time to time pursuant to Section
3(a).


 


“Trading
Day” means a day on which the New York Stock Exchange is open for business.


 


“Transfer
Agent” means VStock Transfer, LLC and any successor transfer agent of the Company.


 


“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion of the Series A Preferred in accordance
with the terms of this Certificate of Designation.


 


Section 2. Designation,
Amount and Par Value. The series of preferred stock shall be designated as the Series A Preferred Stock (the “Series
A Preferred”) and the number of shares so designated shall be two thousand (2,000) (which shall not be subject to increase
without the written consent of all of the holders of the Series A Preferred (each, a “Holder” and collectively,
the “Holders”)). Each share of Series A Preferred shall have a par value of $1,000.00 per share and a stated
value equal to $1,000.00 per share, subject to increase as set forth in Section 3(a) below (the “Stated Value”).


 


Section 3. Dividends.


 


(a) Dividends in Cash
or in Kind. Holders shall be entitled to receive, and the Company shall pay, cumulative dividends at the rate per share (as
a percentage of the Stated Value per share) of 5.0% per annum, payable quarterly within 30 days of January 1, April 1, July 1 and
October 1 of each year, beginning on the first such date after the Original Issue Date and on each Conversion Date (with respect
only to Preferred Stock being converted) (each such date, a “Dividend Payment Date”) (if any Dividend Payment
Date is not a Trading Day, the applicable payment shall be due on the next succeeding Trading Day) in cash, or at the Company’s
option, such dividends shall be accreted to, and increase, the outstanding Stated Value.


 






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(b) Dividend Calculations.
Dividends on the Preferred Stock shall be calculated on the basis of a 360-day year, consisting of twelve 30 calendar day periods,
and shall accrue daily commencing on the Original Issue Date, and shall be deemed to accrue from such date whether or not earned
or declared and whether or not there are profits, surplus or other funds of the Corporation legally available for the payment of
dividends. Dividends shall cease to accrue with respect to any Series A Preferred converted as provided for herein. Except as otherwise
provided herein, if at any time the Company pays dividends partially in cash and partially through accretion to Stated Value, then
such payment shall be distributed ratably among the Holders based upon the number of shares of Preferred Stock held by each Holder
on such Dividend Payment Date. 


  


Section 4. Voting
Rights. Except as otherwise provided herein or as otherwise required by law, holders of Series A Preferred shall vote together
with the Common Stock on all matters submitted to stockholders. Each Series A Preferred share shall be entitled to ten (10) votes
on all matters submitted to a vote of the stockholders of the Company for each share of Common Stock into which such Series A Preferred
could have been converted on the last Dividend Payment Date. Also, as long as any shares of Series A Preferred are outstanding,
the Company shall not, without the affirmative vote of a majority of the Holders of the then outstanding shares of the Series A
Preferred, alter or change adversely the powers, preferences or rights given to the Series A Preferred (including by issuance of
more senior preferred stock) or alter or amend this Certificate of Designation.


 


Section 5. Liquidation.
Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a “Liquidation”),
the Holders shall be entitled to receive out of the assets, whether capital or surplus, of the Company an amount equal to the Stated
Value of the Series A Preferred and any other fees or liquidated damages then due and owing thereon under this Certificate of Designation,
for each share of Series A Preferred, before any distribution or payment shall be made to the holders of any Junior Securities,
and if the assets of the Company shall be insufficient to pay in full such amounts, then the entire assets to be distributed to
the Holders shall be ratably distributed among the Holders in accordance with the respective amounts that would be payable on such
shares if all amounts payable thereon were paid in full.


 


Section 6. Conversion.


 


a) Conversions at
Option of Holder. Each share of Series A Preferred shall be convertible, at any time following the six (6) month
anniversary of the Original Issue Date, and from time to time from and thereafter at the option of the Holder thereof into
Common Stock at the Conversion Rate. Holders shall effect conversions by providing the Company with the form of conversion
notice attached hereto as Annex A (a “Notice of Conversion”). Each Notice of Conversion shall
specify the number of shares of Series A Preferred to be converted, the number of shares of Series A Preferred owned prior to
the conversion at issue, the number of shares of Series A Preferred owned subsequent to the conversion at issue and the date
on which such conversion is to be effected, which date may not be prior to the date the applicable Holder delivers such
Notice of Conversion to the Company (such date, the “Conversion Date”). If no Conversion Date is specified
in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Company is deemed
delivered hereunder. No ink-original Notice of Conversion shall be required. The calculations and entries set forth in the
Notice of Conversion shall control in the absence of manifest or mathematical error. To effect conversions of shares of
Series A Preferred, a Holder shall not be required to surrender the certificate(s) representing the shares of Series A
Preferred to the Company unless all of the shares of Series A Preferred represented thereby are so converted, in which case
such Holder shall deliver the certificate representing such shares of Series A Preferred promptly following the Conversion
Date at issue. Shares of Series A Preferred converted into Common Stock or redeemed in accordance with the terms hereof shall
be canceled and shall not be reissued.


 






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b) Conversion Rate.
Each share of Series A Preferred shall be convertible into the number of shares of Common Stock equal to the quotient of: (1) the
Stated Value, as may be increased from time to time pursuant to Section 3(a), by (2) $0.015 (the “Conversion Rate”).


 


c) Mechanics of Conversion


 


i. Delivery of Conversion
Shares Upon Conversion. Not later than five (5) Trading Days after each Conversion Date (the “Share Delivery Date”),
the Company shall deliver, or cause to be delivered, to the converting Holder the number of Conversion Shares being acquired upon
the conversion of the Series A Preferred. If the Common Stock is listed or quoted for public trading and upon request of the Holder,
the Company shall deliver the Conversion Shares required to be delivered by the Company under this Section 6 electronically through
the Depository Trust Company or another established clearing corporation performing similar functions. 


  


ii. Failure to Deliver
Conversion Shares. If, in the case of any Notice of Conversion, such Conversion Shares are not delivered to or as directed
by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at
any time on or before its receipt of such Conversion Shares, to rescind such Conversion, in which event the Company shall promptly
return to the Holder any original Series A Preferred certificate delivered to the Company and the Holder shall promptly return
to the Company the Conversion Shares issued to such Holder pursuant to the rescinded Conversion Notice.


 


iii. Obligation
Absolute. The Company’s obligation to issue and deliver the Conversion Shares upon conversion of Series A Preferred
in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by a Holder to
enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any Person
or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or
alleged breach by such Holder or any other Person of any obligation to the Company or any violation or alleged violation of
law by such Holder or any other person, and irrespective of any other circumstance which might otherwise limit such
obligation of the Company to such Holder in connection with the issuance of such Conversion Shares; provided, however,
that such delivery shall not operate as a waiver by the Company of any such action that the Company may have against such
Holder. In the event a Holder shall elect to convert any or all of the Series A Preferred, the Company may not refuse
conversion based on any claim that such Holder or anyone associated or affiliated with such Holder has been engaged in any
violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining
and/or enjoining conversion of all or part of the Series A Preferred of such Holder shall have been sought and obtained. In
the absence of such injunction, the Company shall issue Conversion Shares and, if applicable, cash, upon a properly noticed
conversion.


 






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iv. Reservation of Shares
Issuable Upon Conversion. The Company covenants that it will at all times reserve and keep available out of its authorized
and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Series A Preferred, each as herein
provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the
other holders of the Series A Preferred), not less than such aggregate number of shares of the Common Stock as shall be issuable
upon the conversion of the then outstanding shares of Series A Preferred. The Company covenants that all shares of Common Stock
that shall be so issuable shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable.


 


v. Fractional Shares.
No fractional shares or scrip representing fractional shares shall be issued upon the conversion of the Series A Preferred. As
to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at
its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by
the Conversion Rate or round up to the next whole share.


 


vi. Transfer Taxes and
Expenses. The issuance of Conversion Shares on conversion of this Series A Preferred shall be made without charge to any Holder
for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares, provided
that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and
delivery of any such Conversion Shares upon conversion in a name other than that of the Holders of such shares of Series A Preferred
and the Company shall not be required to issue or deliver such Conversion Shares unless or until the Person or Persons requesting
the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the
Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice
of Conversion and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions)
required for same-day electronic delivery of the Conversion Shares.


      


Section 7. Certain
Adjustments.


 


a) Stock
Dividends and Stock Splits. If the Company, at any time while this Series A Preferred is outstanding: (i) pays a stock
dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or
any other Common Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the
Company upon conversion of this Series A Preferred), (ii) subdivides outstanding shares of Common Stock into a larger number
of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller
number of shares, or (iv) issues, in the event of a reclassification of shares of the Common Stock, any shares of capital
stock of the Company, then the Conversion Rate shall be multiplied by a fraction of which the numerator shall be the number
of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and of
which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment
made pursuant to this Section 7(a) shall become effective immediately after the record date for the determination of
stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective
date in the case of a subdivision, combination or re-classification.


 






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b) Calculations.
All calculations under this Section 7 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be.
For purposes of this Section 7, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall
be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.


 


c) Notice to the Holders.


 


i. Adjustment to Conversion
Rate. Whenever the Conversion Rate is adjusted pursuant to any provision of this Section 7, the Company shall promptly deliver
to each Holder a notice setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts
requiring such adjustment.


 


ii. Notice to Allow
Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the
Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)
the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or
purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall
be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is
a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange
whereby the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the
voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the
Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Series A Preferred,
and shall cause to be delivered to each Holder at its last address as it shall appear upon the stock books of the Company, at
least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or
if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such
dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such
reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the
date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the
Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale,
transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof
shall not affect the validity of the corporate action required to be specified in such notice.


 






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Section 8. Miscellaneous.


 


a) Notices. Any
and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any
Notice of Conversion, shall be in writing and delivered personally, by facsimile, or sent by a nationally recognized overnight
courier service, addressed to the Company, at 219 Chemin Metairie Road, Youngsville, Louisiana, 70592, Attention: Daniel J. Schreiber,
or such other address as the Company may specify for such purposes by notice to the Holders delivered in accordance with this Section
8. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered
personally, by facsimile, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile
number or address of such Holder appearing on the books of the Company, or if no such facsimile number or address appears on the
books of the Company, at the principal place of business of such Holder. Any notice or other communication or deliveries hereunder
shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number set forth in this Section prior to 5:30 p.m. (Central time) on any date, (ii) the next Trading
Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth
in this Section on a day that is not a Trading Day or later than 5:30 p.m. (Central time) on any Trading Day, (iii) the second
Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual
receipt by the party to whom such notice is required to be given.


 


b) Absolute Obligation.
Except as expressly provided herein, no provision of this Certificate of Designation shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay liquidated damages, as applicable, on the shares of Series A Preferred at
the time, place, and rate, and in the coin or currency, herein prescribed.


 


c) Lost or Mutilated
Series A Preferred Certificate. If a Holder’s Series A Preferred certificate shall be mutilated, lost, stolen or destroyed,
the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in
lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the shares of Series A Preferred
so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such certificate,
and of the ownership hereof reasonably satisfactory to the Company. 


  


d) Governing Law.
All questions concerning the construction, validity, enforcement and interpretation of this Certificate of Designation shall be
governed by and construed and enforced in accordance with the internal laws of the State of Nevada, without regard to the principles
of conflict of laws thereof.


 


e) Waiver.
Any waiver by the Company or a Holder of a breach of any provision of this Certificate of Designation shall not operate as or
be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Certificate
of Designation or a waiver by any other Holders. The failure of the Company or a Holder to insist upon strict adherence to
any term of this Certificate of Designation on one or more occasions shall not be considered a waiver or deprive that party
(or any other Holder) of the right thereafter to insist upon strict adherence to that term or any other term of this
Certificate of Designation on any other occasion. Any waiver by the Company or a Holder must be in writing.


 






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f) Severability.
If any provision of this Certificate of Designation is invalid, illegal or unenforceable, the balance of this Certificate of Designation
shall remain in effect, and if any provision is inapplicable to any Person or circumstance, it shall nevertheless remain applicable
to all other Persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates
the applicable law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum
rate of interest permitted under applicable law.


 


g) Next Business Day.
Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made
on the next succeeding Business Day.


 


h) Headings. The
headings contained herein are for convenience only, do not constitute a part of this Certificate of Designation and shall not be
deemed to limit or affect any of the provisions hereof.


 


i) Status of Converted
or Redeemed Series A Preferred. If any shares of Series A Preferred shall be converted, redeemed or reacquired by the Company,
such shares shall resume the status of authorized but unissued shares of preferred stock and shall no longer be designated as Series
A Preferred.


  


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ANNEX A


 


NOTICE OF CONVERSION


 


(To
be Executed by the Registered Holder in order to Convert Shares of Series A Preferred Stock)


 


The undersigned hereby elects to convert the
number of shares of Series A Convertible Preferred Stock indicated below into shares of common stock, par value $0.001 per share
(the “Common Stock”), of RedHawk Holdings Corp., a Nevada corporation (the “Company”), according
to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a Person other
than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such
certificates and opinions as may be required by the Company. No fee will be charged to the Holders for any conversion, except for
any such transfer taxes.


 


Conversion calculations:


 


	 	
        Date to Effect Conversion: _____________________________________________

         

	 	
        Number of shares of Series A Preferred owned
        prior to Conversion: _______________

         

	 	
        Number of shares of Series A Preferred to be
        Converted: ________________________

         

	 	
        Number of shares of Common Stock to be Issued:
        ___________________________

         

	 	
        Applicable Conversion Rate:____________________________________________

         

	 	
        Number of shares of Series A Preferred subsequent
        to Conversion: ________________

         

	 	Address for Delivery: ______________________ 


 


 


	 	[HOLDER]
	 	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 


 


 


 




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