Document:

EXHIBIT
4.1

 

CERTIFICATE
OF DESIGNATION

FOR

SERIES
C CONVERTIBLE PREFERRED STOCK

Par
value $.001

OF

SURGE
HOLDINGS, INC.

 

Kevin
Brian Cox and David Ansani certify that they are the President and Secretary of Surge Holdings, Inc., a Nevada corporation (the
“Company”); that, pursuant to the Company’s Articles of Incorporation and applicable provisions of the Nevada
Revised Statutes, the Board of Directors of the Company adopted the following resolutions effective June 8, 2018; and that none
of the Series C Convertible Preferred Stock referred to in this Certificate of Designation has been issued.

 

1.       Creation
of Series C Convertible Preferred Stock; Rank.

 

There
is hereby created a series of preferred stock consisting of 1,000,000 shares and designated as Series C Convertible Preferred
Stock, par value $.001 (the “Series C Preferred Stock”), having the voting rights, powers, preferences, and relative
participating, optional and other special rights, qualifications, limitations and restrictions that are set forth below. The original
issue price (the “Original Issue Price”) of each share of Series C Preferred Stock shall be $100.00. The Series C
Preferred Stock shall, with respect to dividend rights and rights upon liquidation, winding up or dissolution, rank (1) junior
to any other class or series of preferred stock hereafter duly established by the Board of Directors of the Corporation. the terms
of which shall specifically provide that such class or series shall rank prior to the Series C Preferred Stock as to the payment
of dividends or upon distribution of assets upon liquidation, winding up or dissolution (the “Senior Preferred Stock”),
(2) pari passu with any other class or series of preferred stock hereafter duly established by the Board of Directors of
the Corporation, the terms of which shall specifically provide that such class or series shall rank pari passu with the
Series C Preferred Stock as to the payment of dividends or upon distribution of assets upon liquidation, winding up or dissolution
(the “Parity Preferred Stock”) and (3) prior to any other class or series of preferred stock or other class or series
of capital stock of or other equity interests in the Corporation, including, without limitation, all classes of the Common Stock
of the Corporation, whether now existing or hereafter created (all of such classes: or series of capital stock and other equity
interests of the Corporation, including, without limitation, the Common. Stock, are collectively referred to herein as the “Junior
Securities”).

 

2.       Dividends.

 

In
the event the Board of Directors of the Corporation shall elect to pay or declare and set apart for payment any dividend on any
shares of Common Stock in cash out of funds legally available therefor or in stock or other consideration, the holders of the
Series C Preferred Stock shall be entitled to receive, pari passu, a dividend per share of Series C Preferred Stock equal
to the per share amount, and in the same form as, the dividend payable to the holders of the Common Stock.

 

3.       Liquidation
Preference. 

 

In
the event of any liquidation, dissolution, or winding up of the Corporation, either voluntary or involuntary, distributions to
the stockholders of the Corporation shall be made in. the following manner:

 

    	 

     

    

 

A.       Series
C Preferred Stock Preference. With respect to such liquidation, dissolution or winding up, the holders of Series C Preferred
Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets or surplus funds of the Corporation
to the holders of Junior Securities but after distribution of such assets among, or payment thereof to holders of any Senior Preferred
Stock, an amount equal to the Series C Original Issue Price for each share of Series C Preferred Stock plus an amount equal to
all declared but unpaid dividends on Series C Preferred Stock (the “Series C Liquidation Preference”).

 

B.       Distributions.
After the payment of the full Series C Liquidation Preference as set forth in Section 3(A), the remaining assets of the Corporation
legally available for distribution, if any, shall be distributed ratably to the holders of the Junior Securities and Common Stock
in. an amount equal to the Series C Liquidation Preference; after such distribution to the holders of the Series C Preferred Stock
and Common Stock, the remaining assets of the Corporation legally available for distribution, if any, shall be distributed ratably
(subject to Section 3(C)) among the holders of Series C Preferred Stock, Series C Preferred Stock and the Common Stock.

 

C.       Proportionate
Payments. If the assets and funds legally available for distribution among the holders of Series C Preferred Stock shall be
insufficient to permit the payment to the holders of the full Series C Liquidation Preference, then the assets and funds shall
be distributed ratably among holders of Series C Preferred Stock in proportion to the number of shares of Series C Preferred Stock
owned by each holder.

 

D.       Reorganization
or Merger. A merger or reorganization of the Corporation with or into any other corporation or corporations or a sale of all
or substantially all of the assets or outstanding capital stock of the Corporation, in which transaction the Corporation’s
stockholders immediately prior to such transaction own immediately after such transaction less than 50% of the equity securities
of the surviving corporation or its parent, shall be deemed to be a liquidation within the meaning of this Section 3 and the proceeds
payable in such transaction shall be divided among the stockholders in accordance with this Section 3.

 

4.       Conversion.

 

A.       Each
share of Series C Preferred Stock may be converted into Company Common Stock by any holder thereof, without any further consideration,
at any time following the first to occur of the following:

 

	 	(i)	The
    Volume Weighted Average Price of the Common Stock during any ten consecutive trading days is at least $2.00 per share; or
	 	 	 
	 	(ii)	June
    30, 2019.

 

Each
share of Series C Preferred Stock shall be convertible into 250 shares of Company Common Stock

 

B.       In
the event of any conversion resulting in fractional shares, in lieu of issuance of fractional shares or securities representing
fractional shares of Common Stock, the Company shall pay the holder in cash the fair value of fractions of a share as of the date
of conversion as determined by the Company’s board of directors. For these purposes, the “date of conversion”
shall mean the date the Corporation receives a written notice of a voluntary conversion by the holder or the date of automatic
conversion pursuant to Section 4(A), above.

 

C.       The
Company covenants that it will at all times reserve and keep available, free from preemptive rights, out of the aggregate of its
authorized but unissued shares of Common Stock or its issued shares of Common Stock held by its treasury, or both, for the purpose
of effective conversions of the Series C Preferred Stock, the full number of shares of Common Stock deliverable upon the conversion
of all outstanding shares of the Series C Preferred Stock not theretofore converted. For purposes of this Section 4(C), the number
of shares of Common Stock that shall be deliverable upon the conversion of all outstanding shares of the Series C Preferred Stock
shall be computed as if at the time of computation all the outstanding shares were held by a single holder.

 

    	 

     

    

 

D.       
Adjustments of Conversion Rate.

 

(i)       Adjustments
for Stock Splits and Combinations. If the Company shall, at any time or from time to time after the date of issuance of the
Series C Preferred Stock (“Issuance Date”), effect a split of the outstanding Common Stock, the Conversion Rate shall
be proportionately adjusted. If the Company shall, at any time or from time to time after the Issuance Date, combine the outstanding
shares of Common Stock, the Conversion Rate shall be proportionately adjusted. Any adjustments under this Section 4(D)(i) shall
be effective at the close of business on the date the stock split or combination becomes effective.

 

(ii)       Adjustments
for Certain Dividends and Distributions. If the Company shall, at any time or from time to time after the Issuance Date, make
or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other distribution
payable in shares of Common Stock, then, and in each event, the Conversion Rate shall be adjusted as of the time of such issuance
or, in the event such record date shall have been fixed, as of the close of business on such record date, by multiplying the Conversion
Price then in effect by a fraction:

 

a.       the
numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time of
such issuance or the close of business on such record date; and

 

b.       the
denominator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the time
of such issuance or the close of business on such record date plus the number of shares of Common Stock issuable in payment of
such dividend or Distribution.

 

(iii)       Adjustment
for Other Dividends and Distributions. If the Company shall, at any time or from time to time after the Issuance Date, make
or issue or set a record date for the determination of holders of Common Stock entitled to receive a dividend or other Distribution
payable in securities of the Company other than shares of Common Stock, then, and in each event, an appropriate revision to the
applicable Conversion Rate shall be made and provision shall be made (by adjustments of the Conversion Rate or otherwise) so that
the Series C Preferred Stockholders shall receive upon conversions thereof, in addition to the number of shares of Common Stock
receivable thereon, the number of securities of the Company which they would have received had their shares of Series C Preferred
Stock been converted into Common Stock on the date of such event and had such holder thereafter, during the period from the date
of such event to and including the Conversion Date, retained such securities (together with any distributions payable thereon
during such period), giving application to all adjustments called for during such period under this Section 4(D)(iii) with respect
to the rights of the holders of the Series C Preferred Stock; provided, however, that if such record date shall have been fixed
and such dividend is not fully paid or if such distribution is not fully made on the date fixed therefor, the Conversion Rate
shall be adjusted pursuant to this paragraph as of the time of actual payment of such dividends or Distributions; and provided
further, however, that no such adjustment shall be made if the holders of the Series C Preferred Stock simultaneously receive
a dividend or other distribution of shares of Common Stock in a number equal to the number of shares of Common Stock as they would
have received if all outstanding shares of Series C Preferred Stock had been converted into Common Stock on the date of such event.

 

(iv)       Adjustments
for Reclassification, Exchange or Substitution. If the Common Stock issuable upon conversion of the Series C Preferred Stock
at any time or from time to time after the Issuance Date shall be changed to the same or different number of shares of any class
or classes of stock, whether by reclassification, exchange, substitution or otherwise (other than by way of a stock split or combination
of shares or stock dividends provided for in Sections 4(D)(i), (ii) and (iii), or a reorganization, merger, consolidation, or
sale of assets provided for in Section 4(D)(v), then, and in each event, an appropriate revision to the Conversion Rate shall
be made and provisions shall be made (by adjustments of the Conversion Rate or otherwise) so that the holders of Series C Preferred
Stock shall have the right thereafter to convert their shares of Series C Preferred Stock into the kind and amount of shares of
stock and other securities receivable upon reclassification, exchange, substitution or other change, by holders of the number
of shares of Common Stock into which such shares of Series C Preferred Stock might have been converted immediately prior to such
reclassification, exchange, substitution or other change, all subject to further adjustment as provided herein.

 

    	 

     

    

 

(v)       Adjustments
for Reorganization, Merger, Consolidation or Sales of Assets. If at any time or from time to time after the Issuance Date
there shall be a capital reorganization of the Company (other than by way of a stock split or combination of shares or stock dividends
or Distributions provided for in Section 4(D)(i), (ii) and (iii), or a reclassification, exchange or substitution of shares provided
for in Section 4(D)(iv)), or a merger or consolidation of the Company with or into another corporation where the holders of the
Company’s outstanding voting securities prior to such merger or consolidation do not own over 50% of the outstanding voting
securities of the merged or consolidated entity, immediately after such merger or consolidation, or the sale of all or substantially
all of the Company’s properties or assets to any other person (an “Organic Change”), then as a part of such
Organic Change an appropriate revision to the Conversion Rate shall be made if necessary and provision shall be made if necessary
(by adjustments of the Conversion Rate or otherwise) so that the holders of the shares of Series C Preferred Stock shall have
the right thereafter to convert their shares of Series C Preferred Stock into the kind and amount of shares of stock and other
securities or property of the Company or any successor corporation resulting from Organic Change. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section 4(D)(v) with respect to the rights of the holders
of shares of Series C Preferred Stock after the Organic Change to the end that the provisions of this Section 4(D)(v) (including
any adjustment in the Conversion Rate then in effect and the number of shares of stock or other securities deliverable upon conversion
of the Series C Preferred Stock) shall be applied after that event in as nearly an equivalent manner as may be practicable.

 

(vi)       Consideration
for Stock. In case any shares of Common Stock or Convertible Securities other than the Series C Preferred Stock, or any rights
or warrants or options to purchase any such Common Stock or Convertible Securities, shall be issued or sold:

 

a.       in
connection with any merger or consolidation in which the Company is the surviving corporation (other than any consolidation or
merger in which the previously outstanding shares of Common Stock of the Company shall be changed to or exchanged for the stock
or other securities of another corporation), the amount of consideration therefore shall be deemed to be the fair value, as determined
reasonably and in good faith by the Board of Directors of the Company, of such portion of the assets and business of the non-surviving
corporation as such Board may determine to be attributable to such shares of Common Stock, Convertible Securities, rights or warrants
or options, as the case may be; or

 

b.       in
the event of any consolidation or merger of the Company in which the Company is not the surviving corporation or in which the
previously outstanding shares of Common Stock of the Company shall be changed into or exchanged for the stock or other securities
of another corporation, or in the event of any sale of all or substantially all of the assets of the Company for stock or other
securities of any corporation, the Company shall be deemed to have issued a number of shares of its Common Stock for stock or
securities or other property of the other corporation computed on the basis of the actual exchange ratio on which the transaction
was predicated, and for a consideration equal to the fair market value on the date of such transaction of all such stock or securities
or other property of the other corporation. If any such calculation results in adjustment of the applicable Conversion Rate, or
the number of shares of Common Stock issuable upon conversion of the Series C Preferred Stock, the determination of the applicable
Conversion Rate or the number of shares of Common Stock issuable upon conversion of the Series C Preferred Stock immediately prior
to such merger, consolidation or sale, shall be made after giving effect to such adjustment of the number of shares of Common
Stock issuable upon conversion of the Series C Preferred Stock. In the event any consideration received by the Company for any
securities consists of property other than cash, the fair market value thereof at the time of issuance or as otherwise applicable
shall be as determined in good faith by the Board of Directors of the Company. In the event Common Stock is issued with other
shares or securities or other assets of the Company for consideration which covers both, the consideration computed as provided
in this Section 4(D)(vi)(b) shall be allocated among such securities and assets as determined in good faith by the Board of Directors
of the Company.

 

    	 

     

    

 

(vii)       No
Impairment. The Company shall not, by amendment of its Certificate of Incorporation 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 Company, but will at all times
in good faith assist in the carrying out of all the provisions of this Section 4(D) 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 Series C Preferred Stock against impairment.
In the event any holder of Series C Preferred Stock shall elect to convert any shares of Series C Preferred Stock as provided
herein, the Company cannot 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, unless (i) the Company receives an order from the Securities and Exchange Commission
prohibiting such conversion or (ii) an injunction from a court, on notice, restraining and/or enjoining conversion of all or of
said shares of Series C Preferred Stock shall have been issued.

 

(viii)       Certificates
as to Adjustments. Upon occurrence of each adjustment or readjustment of the Conversion Rate or number of shares of Common
Stock issuable upon conversion of shares of Series C Preferred Stock pursuant to this Section 4(D), the Company at its expense
shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to each holder of shares
of Series C Preferred Stock a certificate setting forth such adjustment and readjustment, showing in detail the facts upon which
such adjustment or readjustment is based. The Company shall, upon written request of the holder of such affected Series C Preferred
Stock, at any time, furnish or cause to be furnished to such holder a like certificate setting forth such adjustments and readjustments,
the Conversion Rate in effect at the time, and the number of shares of Common Stock and the amount, if any, of other securities
or property which at the time would be received upon the conversion of the shares of Series C Preferred Stock. Notwithstanding
the foregoing, the Company shall not be obligated to deliver a certificate unless such certificate would reflect an increase or
decrease of at least one percent of such adjusted amount.

 

5.       Voting.

 

Except
as otherwise provided herein or required by law, the holders of the Series C Preferred Stock shall be entitled to vote together
as a single class with the holders of Common Stock and any other capital stock of the Corporation entitled to vote, upon any matter
submitted to the stockholders for a vote. The holders of Series C Preferred Stock shall be entitled to cast a number of votes
calculated as if the shares of Series C Preferred Stock had been converted into shares of Common Stock based on the Conversion
Rate.

 

6.       Waiver
by Series C Preferred Stockholders.

 

Except
as expressly provided for herein or as otherwise required by law, any rights or benefits for the Series C Preferred Shares and
the holders thereof provided herein may only be waived as to all outstanding Series C Preferred Shares by the affirmative written
consent of the holders of all of the shares of then-outstanding Series C Preferred Stock.

 

7.       Additional
Issuance of Preferred Shares.

 

The
Company may issue additional shares of Preferred Stock in the future. If the Company desires to issue additional shares of Preferred
Stock, the Company shall file such amendments to its Certificate of Incorporation as may be necessary to effect such designation.

 

IN
WITNESS WHEREOF, the Company has caused this Certificate of Designation to be duly executed by its President and attested to by
its Secretary as of the 22nd day of June, 2018, who, by signing their names hereto, acknowledge that this Certificate of Designation
is the act of the Company and state to the best of their knowledge, information and belief, under penalties of perjury, that the
above matters and facts are true in all material respects.

 

	 	SURGE
    HOLDINGS, INC.
	 	 	 
	 	By: 	/S/
    Kevin Brian Cox
	 	 	President
	 	 	 
	 	By: 	/s/
    David Ansani 
	 	 	SecretaryEXHIBIT
10.1

 

EXCHANGE
AGREEMENT

 

This
EXCHANGE AGREEMENT (this “Agreement”) is made and entered into as of June 29, 2018 by and between Surge Holdings,
Inc. (the “Company”) and Kevin Brian Cox (“COX”). The Company and COX are hereinafter sometimes referred
to individually as a “Party” or collectively as the “Parties”.

 

RECITALS

 

A.
COX is the owner of 138,741,531 shares of Company Common Stock (“COX Common Shares”);

 

B.
The Company and COX have agreed that it is beneficial for the Company for COX to exchange the COX Common Shares for a like value
of Company Series C Convertible Preferred Stock (“Preferred Stock”) which is governed by the Certificate of Designations
which has been filed with the Nevada Secretary of State with respect thereto.

 

C.
COX acknowledges that by executing this exchange, that he will be effectively “locking-up” his holdings in the COX
Common Shares and that there is no public market for the Preferred Stock and that he will only be able to convert the Preferred
Stock to Common Stock subject to the achievement of certain milestones detailed in the Certificate of Designations.

 

D.
The Parties acknowledge that by doing this exchange, the COX Common Shares will no longer be included in the calculation of Primary
Common Stock of the Company which is issued and outstanding.

 

E.
In consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties hereto, intending to be legally bound, agree as follows:

 

AGREEMENT

 

1.
Exchange. Effective June 29, 2018, COX will exchange 138,741,531 shares of Company Common Stock he holds for 554,966 shares
of Company Series C Convertible Preferred Stock. The COX Common Shares will thereupon be tendered to the Company for cancellation
and the Company shall cause the shares of Preferred Stock to be issued to COX as a “book entry” in the books and records
of the Company.

 

2.
Consideration. While there is no monetary consideration passing hands on account of the exchange, all parties acknowledge
that this agreement is supported by fair and valuable consideration by reducing the number of shares of Company Common Stock issued
and outstanding and thereby having a potentially positive impact on the Company’s primarily, which both Parties believe
will be mutually beneficial. COX has agreed to the exchange without any basis or belief that the exchange will provide him with
any benefit over the other Common shareholders of the Company.

 

3.
No Market for Company Preferred Stock. COX acknowledges that there currently is no market for the Company Preferred Stock
and there is no reasonable likelihood that one will develop in the foreseeable future.

 

    	 

    	 

    

 

4.
Miscellaneous.

 

4.1
Termination. This Agreement may be terminated by the mutual consent of the Parties at any time prior to the exchange actually
taking place on the books of the Company.

 

4.2
Notices. All notices, consents, waivers, and other communications under this Agreement must be in writing and will be deemed
to have been duly given when (a) delivered by hand (with written confirmation of receipt), (b) sent by fax (with written confirmation
of receipt), provided that a copy is mailed by registered mail, return receipt requested, or (c) when received by the addressee,
if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and
fax numbers set forth below (or to such other address, person’s attention or fax number as a party may designate by notice
to the other parties given in accordance with this Section 6.2):

 

If
to COX:

 

Kevin
Brian Cox

3124
Brother Blvd 104

Bartlett,
TN 38133

 

If
to the Company:

 

Surge
Holdings, Inc.

3124
Brother Blvd 104

Bartlett,
TN 38133

 

With
a copy to:

 

Robert
Diener, Esq.

Law
Offices of Robert Diener

41
Ulua Place

Haiku,
HI 96708

 

4.3
Amendments and Waiver. Unless otherwise specifically stated herein, any term of this Agreement may be amended with the
written mutual consent of the Parties and not otherwise. Neither the failure nor any delay by any Party in exercising any right,
power, or privilege under this Agreement will operate as a waiver of such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude any other or further exercise of such right, power, or privilege
or the exercise of any other right, power, or privilege. To the maximum extent permitted by applicable law, (a) no waiver that
may be given by a Party will be applicable except in the specific instance for which it is given, and (b) no notice to or demand
on one Party will be deemed to be a waiver of any obligation of such Party or of the right of the Party giving such notice or
demand to take further action without notice or demand as provided in this Agreement.

 

4.4
Entire Agreement. This Agreement embodies the entire agreement and understanding between the Parties hereto with respect
to its subject matter, and supersedes all prior agreements and understandings relating to the subject matter hereof.

 

    	 

    	 

    

 

4.5
Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability
of any other provisions of this Agreement to the extent permitted by law.

 

4.6
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Nevada. The
parties hereto irrevocably (a) submit to the jurisdiction of any state or federal court of competent jurisdiction sitting in the
State of Nevada in any action or proceeding arising out of or relating to this Agreement, (b) agree that all claims with respect
to such action or proceeding shall be heard and determined in such a Texas state or federal court, and (c) waive, to the fullest
extent possible, the defense of an inconvenient forum.

 

4.7
Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall be binding
upon, and inure to the benefit of, the respective representatives, successors and assigns of the parties hereto.

 

4.8
Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same instrument.

 

IN
WITNESS WHEREOF, the undersigned have executed this Exchange Agreement as of the day and year written above.

 

	 	SURGE
    HOLDINGS, INC.
	 	 	 
	 	By:	 
	 	Name:	Anthony
P. Nuzzo, Jr.
	 	Title:	Director
	 	 	 
	 	 
	 	Kevin
    Brian Cox

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