Current Report Filing (8-k)

Share Name	Share Symbol	Market	Type
Pernix Group Inc (CE)	USOTC:PRXG	OTCMarkets	Common Stock

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): June 26, 2015

PERNIX GROUP, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware

333-92445

36-4025775

(State or Other Jurisdiction

of Incorporation)

(Commission File Number)

(I.R.S. Employer

Identification No.)

151 E. 22nd Street

Lombard, Illinois

60148

(Address of Principal Executive Offices)

(Zip Code)

(630) 620-4787

(Registrant’s telephone number, including area code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

The information set forth in Item 3.02 below is hereby incorporated by reference in this Item 1.01.

ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES

Creation of Series C Preferred Stock

On June 10, 2015, Pernix Group, Inc. (the “Company”) filed a Certificate of Designations of Series C Preferred Stock (the “Certificate of Designations”) with the Delaware Secretary of State, designating 4,000,000 shares of the Company’s undesignated preferred stock, par value $0.01 per share, as Series C Cumulative Convertible Preferred Stock (the “Series C Preferred Stock”) included in the Company’s Current Report on Form 8-K filed June 16, 2015.

On June 30, 2015, the Company amended the Certificate of Designations (the “Amended and Restated Certificate of Designations”) where by all of the terms included in the Certificate of Designations filed on June 16, 2015 are the same except for the Common Stock value in section 3.(a) Dividend Rights which is being reduced from $5.00 USD per share to $4.48 USD per share. The Amended and Restated Certificate of Designations is filed as Exhibit 3.1 to this Current Report on Form 8-K.

Series C Preferred Stock Offering

On June 26, 2015, the Company entered into Series C Cumulative, Convertible Preferred Stock Purchase Agreements (the “SPAs”) with each of Ernil Continental S.A., BVI (“Ernil”) and Halbarad Group, Ltd., BVI (“Halbarad”), the two largest shareholders of the Company. Copies of each SPA are attached to this Current Report on Form 8-K as Exhibits 10.1 and 10.2, respectively, and the descriptions of certain terms of the SPAs contained herein are summaries and are qualified in their entirety by reference to the full text of the SPAs.

Pursuant to the terms of the SPAs, the Company has agreed to issue 990,000 shares and 810,000 shares, respectively, of Series C Cumulative Convertible Preferred Stock of the Company (the “Series C Preferred Stock”) to each of Ernil and Halbarad at a purchase price per share of $10.00 for total cash investments by Ernil and Halbarad of $9,900,000 and $8,100,000, respectively.

There were no underwriting discounts or commissions incurred in the offering of Series C Preferred Stock to Ernil and Halbarad. The Company expects to use the proceeds of the offering of Series C Preferred Stock for general working capital purposes, including the funding of the acquisition of KBR Building Group, LLC for $22.0 million and the $6.0 million working capital associated with the transaction.

The Company at its option, may convert each share of Series C Preferred Stock into one share of the Company’s common stock upon 30 days’ written notice to the holder of such Series C Preferred Stock and subject to adjustment for certain antidilution provisions set forth in the Certificate of Designations of the Series C Preferred Stock. Dividends will cease to accrue on shares of Series C Preferred Stock on the date of any such conversion.

The issuance and sale of the Series C Preferred Stock to Ernil and Halbarad is exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 4(a)(2) and Regulation D of the Securities Act. The Company has not engaged in general solicitation or advertising with regard to the issuance and sale of the Series C Preferred Stock and has not offered securities to the public in connection with such issuance and sale.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS

(d) Exhibits.


Exhibit No.		Description

3.1 10.1 10.2		Amended and Restated Certificate of Designations, Series C Preferred Stock, dated June 30, 2015 Series C Cumulative, Convertible Preferred Stock Purchase Agreement, dated June 26, 2015, by and between Pernix Group, Inc. and Ernil Continental S.A., BVI Series C Cumulative, Convertible Preferred Stock Purchase Agreement, dated June 26, 2015, by and between Pernix Group, Inc. and Halbarad Group, Ltd., BVI

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	PERNIX GROUP, INC.

	By:	/s/ Nidal Z. Zayed
		Nidal Z. Zayed
		President and Chief Executive Officer









Dated: July 1, 2015

PERNIX GROUP, INC.

Amended and Restated Certificate of Designation

Series C Preferred Stock

Par Value $0.01 per share

_________________

Pursuant to Section 242 of the

General Corporation Law of the State of Delaware

__________________

Pursuant to Section 242 of the General Corporation Law of the State of Delaware, the approval of the holders of the outstanding shares of Series C Preferred Stock, and in accordance with provision of it’s Restated Certificate of Incorporation, Pernix Group, Inc., a Delaware Corporation, does hereby certify that:

The undersigned Chief Executive Officer of Pernix Group, Inc., a Delaware corporation (hereinafter called the “Corporation”), DOES HEREBY CERTIFY that the following resolution has been duly adopted by unanimous written consent of the Board of Directors of the Corporation:

RESOLVED, that pursuant to the authority expressly granted to and vested in the Board of Directors of the Corporation by the provisions of the Certificate of Incorporation of the Corporation (as amended from time to time, the “Certificate of Incorporation”), there hereby is created, out of the 5,500,000 shares of authorized Preferred Stock, par value $0.01 per share, of the Corporation authorized in Article Fourth of its Certificate of Incorporation (the “Preferred Stock”), a series of Preferred Stock of the Corporation consisting of 4,000,000 shares, which series shall be designated as “Series C Preferred Stock” and shall have the following powers, designations, preferences and relative, participating, optional or other rights, and the following qualifications, limitations and restrictions:

1. Designation; Number of Shares; Par Value; Rank. The shares of such series will be designated as “Series C Cumulative Convertible Preferred Stock” (the “Series C Preferred Stock”). The number of shares of Series C Preferred Stock will be limited to Four Million Shares (4,000,000). The Series C Preferred Stock will have a par value of $0.01 per share. The Series C Preferred Stock will rank, with respect to dividend rights and rights on liquidation, winding up and dissolution, (a) senior to the common stock, par value $0.01 per share, of the Corporation (the “Common Stock”) and each other class of capital stock or series of preferred stock established after the date of this Certificate of Designations that does not expressly provide that it ranks senior to or on parity with the Series C Preferred Stock as to dividend rights and rights on liquidation, winding up and dissolution (collectively referred to as “Junior Securities”), (b) on a parity with the Series A Preferred Stock, par value $0.01, and Series B Preferred Stock, par value $0.01, of the Corporation and each other class of capital stock or series of preferred stock issued by the Corporation established after the date of this Certificate of Designations that expressly provides that such series will rank on a parity with the Series C Preferred Stock as to dividend rights and rights on liquidation, winding up and dissolution (collectively referred to as “Parity Securities”) and (c) junior to each other class of capital stock or series of preferred stock established after the date of this Certificate of Designations that expressly provides that such series will rank senior to the Series C Preferred Stock as to dividend rights and rights on liquidation, winding up and dissolution (collectively referred to as “Senior Securities”).

2. Voting Rights.

(a)The holders of the Series C Preferred Stock will have no voting power whatsoever, except as otherwise provided in this Certificate or by the Delaware General Corporation Law (the “DGCL”).

(b)To the extent that under this Certificate or the DGCL the vote of the holders of the Series C Preferred Stock, voting separately as a class or series, is required to authorize a given action of the Corporation, the affirmative vote or consent of the holders of at least a majority of the then-outstanding shares of the Series C Preferred Stock represented at a duly held meeting at which a quorum is present or by written consent of the holders of a majority of the outstanding shares of Series C Preferred Stock (except as otherwise may be required under the DGCL) will constitute the approval of such action by the class. To the extent that under this Certificate or the DGCL holders of the Series C Preferred Stock are entitled to vote on a matter with holders of Common Stock, voting together as one class, each share of Series C Preferred Stock will be entitled to a number of votes equal to the number of shares of Common Stock into which it is then convertible, using the record date for the taking of such vote of stockholders as the date on which the number of shares is calculated.

3. Dividend Rights.

(a)From and after the date of July 1, 2015, the holders of outstanding shares of Series C Preferred Stock will be entitled to receive, when, as and if declared by the Board of Directors of the Corporation, to the extent permitted under the General Corporation Law of the State of Delaware and before any dividend or other distribution is declared or paid with respect to outstanding Junior Securities, cumulative dividends payable bi-annually in arrears on January 1 and July 1 in each year (each of such dates is referred to herein as a "Dividend Payment Date" and the period between consecutive Dividend Payment Dates is referred to herein as a "Dividend Period") commencing July 1, 2016. From July 1, 2015 through July 1, 2016 all dividends accrued will be paid to the holders of Series C Preferred stock in the form of the Common Stock valued solely for the purposes of this section equal to $4.48 USD per share. The dividend rate on outstanding shares of Series C Preferred Stock will be $.80 per share per annum, computed on the basis of a 365-day year and the actual number of days elapsed in each Dividend Period. In the event of a dividend paid with the Common Stock, the total dividend amount owed to the holders of Series C will be divided by the $4.48 USD per common share rate to establish the number of shares of Common Stock to be distributed as a dividend, any fractional shares will be rounded up to the nearest whole number.

(b)Dividends on outstanding shares of Series C Preferred Stock pursuant to clause (a) above will be fully cumulative and will accrue, whether or not declared, from the respective dates of issuance of such shares of Series C Preferred Stock until so paid. Accumulated unpaid dividends for past Dividend Periods may be declared by the Board of Directors of the Corporation and paid to the holders of record of outstanding shares of Series C Preferred Stock as their names will appear on the stock register of the Corporation on such record date, as will be fixed by the Board of Directors, but not more than sixty or less than ten days preceding each such Dividend Payment Date, whether or not such date is a Dividend Payment Date. No interest or sum of money in lieu of interest will be payable in respect of any accumulated unpaid dividends on outstanding shares of Series C Preferred Stock.

(c)So long as any shares of Series C Preferred Stock are outstanding, the Corporation will not (i) declare, pay or set apart for payment any dividend on any outstanding Junior Securities, (ii) make any payment on account of, or set apart for payment, money for a sinking or other similar fund for the purchase, redemption, retirement or other acquisition for value of any of, or redeem, purchase, retire or otherwise acquire for value any of the outstanding Junior Securities or any convertible securities, warrants, rights, calls or options exercisable for or convertible into any Junior Securities or (iii) make any distribution in respect of any outstanding Junior Securities or any convertible securities, warrants, rights, calls or options exercisable for or convertible into any Junior Securities, unless prior to or concurrently with such declaration, payment, setting apart for payment, purchase, redemption, retirement, other acquisition for value or distribution, as the case may be, all accrued and unpaid dividends, if any, on outstanding shares of Series C Preferred Stock not paid with respect to all Dividend Periods theretofore ended will have been paid in full.

(d)Subject to the foregoing provisions of this Section 3, the Board of Directors of the Corporation may declare and the Corporation may pay or set apart for payment dividends and other distributions on any Junior Securities and may purchase or otherwise acquire any Junior Securities or any convertible securities, warrants, rights, calls or options exercisable for or convertible into any Junior Securities and the holders of outstanding shares of Series C Preferred Stock will not be entitled to share therein; provided, however, that the Corporation will not declare or pay any dividend or make any other distribution on any outstanding Junior Securities if the net assets of the Corporation after the payment of such dividend would be insufficient to pay to the holders of the outstanding shares of Series C Preferred Stock the entire amount of the liquidation preference to which such holders are entitled pursuant to the provisions of Section 4 below.

4. Liquidation Rights.

(a)In the event of (i) any voluntary or involuntary liquidation, dissolution, winding up or reorganization of the Corporation (whether or not followed by reincorporation of another corporation), (ii) the giving of written notice to the Corporation at its principal executive office by the holders of not less than a majority of the Series C Preferred Stock prior to the sale or transfer of all or substantially all of the assets of the Corporation or (iii) the giving of written notice to the Corporation at its principal executive office by the holders of not less than a majority of the Series C Preferred Stock prior to the merger or consolidation of the Corporation with and into any corporation or other legal entity, or a merger of any corporation or other legal entity with or into the Corporation if, in the case of such merger or consolidation, immediately after such merger or consolidation, the stockholders of the Corporation immediately prior thereto own, in the aggregate, capital stock of the surviving or resulting corporation not having the voting power to elect a majority of the board of directors of such corporation (any of the foregoing, a “Liquidation”), before any payment or distribution of assets is made on any Junior Securities or the Common Stock, but after payment or provision for payment of the Corporation's debts and other liabilities and any payments and distributions payable to the holders of any Senior Securities issued in accordance with Section 1, the holders of the Series C Preferred Stock will receive a Liquidation Preference (as defined in Section 4(b)) and will be entitled to receive all dividends that have been declared but unpaid through the date of distribution, and the holders of any Parity Securities will be entitled to receive the full respective liquidation preferences (including any premium) to which they are entitled and will receive dividends that have been declared but unpaid with respect to their respective shares through the date of distribution. If, upon such Liquidation, the assets of the Corporation are insufficient to pay in full the amounts described above as payable with respect to the Series C Preferred Stock and any Parity Securities, the holders of the Series C Preferred Stock and such Parity Securities will share ratably in any such distribution of assets of the Corporation, first in proportion to their respective liquidation preferences, until such preferences are paid in full, and then in proportion to their respective amounts of declared but unpaid dividends. After payment of any such Liquidation Preference and declared dividends, the shares of Series C Preferred Stock will not be entitled to any further participation in any distribution of assets by the Corporation. On the date on which the Liquidation Preference is paid in full, all rights of the holder of such share of Series C Preferred Stock, including any conversion right pursuant to Section 6, will cease, and such share of Series C Preferred Stock will not be deemed to be outstanding. Any shares of Series C Preferred Stock that receive a full Liquidation Preference will be cancelled and will not be reissued, sold or transferred.

(b)The “Liquidation Preference” will be equal to $10.00 per share of Series C Preferred Stock, as adjusted pursuant to this Section 4(b). The Liquidation Preference will be adjusted proportionately in the event that shares of Series C Preferred Stock are subdivided into a greater number or combined into a lesser number.

(5) Redemption.

(a)Option Redemption. The Corporation, at its option, may redeem, in whole or in part, at any time and from time to time, out of funds legally available therefor, any outstanding shares of Series C Preferred Stock, upon notice given as provided in Section 5(b) below, at a redemption price equal to the Liquidation Preference.

(b)Notice of Redemption. Notice of every redemption of Series C Preferred Stock shall be given by first class mail, postage prepaid, addressed to the holders of record of the shares to be redeemed at their respective last address appearing on the books of the Corporation. Such mailing shall take place not less than 30 days prior to the date fixed for redemption. Any notice mailed as provided in this Subsection shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure to duly give notice by mail, or any other defect in such notice or in the mailing thereof, to holders of outstanding shares of Series C Preferred Stock, shall not affect the validity of the proceedings for the redemption of any other shares of Series C Preferred Stock.

(c)Partial Redemption. In case of any redemption of part of the then outstanding shares of Series C Preferred Stock, the shares to be redeemed shall be selected either pro rata or in such other manner as the Board of Directors of the Corporation or a duly authorized committee thereof may determine to be fair and equitable. If fewer than all the shares represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.

(d)Effectiveness of Redemption. If notice of redemption has been duly given and if on or before the redemption date specified in the notice all funds necessary for the redemption have been deposited by the Corporation, in trust for the pro rata benefit of holders of shares called for redemption. Notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation, on and after the redemption date, dividends shall cease to accrue on all shares so called for redemption, all shares so called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the amount payable on such redemption date, without interest. Any funds unclaimed on the two year anniversary of the redemption date shall, to the extent permitted by law, be released to the Corporation, after which time the holders of the then redeemed shares shall look only to the Corporation for payment of the redemption price of the shares.

(6) Conversion.

(a)General. The Corporation at its option, can convert each share of Series C Preferred Stock for Common Stock upon 30 days written notice to the holder of said shares Series C Preferred Stock. Each share of Series C Preferred Stock will be convertible into one share of Common Stock (the “Conversion Rate”) subject to adjustment as described in Section 6(b) below. Dividends will cease to accrue on shares of Series C Preferred Stock on the date of conversion.

(b)Antidilution Provisions. After the date hereof, the Conversion Rate is subject to adjustment from time to time as follows:

i) In case the Corporation will pay a dividend in shares of Common Stock to holders of Common Stock or will make a distribution in shares of Common Stock to holders of Common Stock, the Conversion Rate in effect at the opening of business on the business day following the record date fixed for determining the holders of Common Stock entitled to receive such dividend or other distribution will be increased by multiplying such Conversion Rate by a fraction, the numerator of which will be the sum of the number of shares of Common Stock outstanding at the close of business on the record date fixed for such determination plus the total number of shares of Common Stock constituting such dividend or other distribution and the denominator of which will be the number of shares of Common Stock outstanding at the close of business on the record date fixed for such determination, such increase to become effective immediately after the opening of business on the business day following the record date fixed for such determination. For the purposes of this subparagraph, the number of shares of Common Stock at any time outstanding will not include shares held in the treasury of the Corporation. The Corporation will not pay any dividend or make any distribution on shares of Common Stock held in the treasury of the Corporation.

ii) In case the outstanding shares of Common Stock will be subdivided into a greater number of shares of Common Stock, the Conversion Rate in effect at the opening of business on the business day following the date upon which such subdivision becomes effective will be proportionately increased and conversely, in case the outstanding shares of Common Stock will be combined into a smaller number of shares of Common Stock, the Conversion Rate in effect at the opening of business on the business day following the date upon which such combination becomes effective will be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the business day following the date upon which such subdivision or combination becomes effective.

iii) No adjustment in the Conversion Rate will be required unless such adjustment would require an increase or decrease of at least 1% of such rate; provided, however, that any adjustments that by reason of this subparagraph are not required to be made will be carried forward and taken into account in any subsequent adjustment and provided, further, that adjustment will be required and made in accordance with the provisions of this subsection (b) (other than this subparagraph) not later than such time as may be required in order to preserve the tax-free nature of a distribution to the holders of shares of Common Stock. At its option, the Corporation also may make such other increase in the Conversion Rate as the Board of Directors deems advisable to avoid or diminish any income tax to holders of Common Stock resulting from any deferral in the adjustment of the Conversion Rate pursuant to this Section 6(b)(iii). All calculations will be made to the nearest cent.

iv) Whenever the Conversion Rate is adjusted as herein provided, the Corporation will promptly mail an officer's certificate signed by the Chief Financial Officer (or, if there be none, the Treasurer) of the Corporation setting forth the Conversion Rate after such adjustment and setting forth a brief statement of the facts requiring such adjustment and the manner of computing same, which certificate will constitute conclusive evidence, absent manifest error, of the correctness of such adjustment. If the calculation of the adjustment requires a determination by the Board of Directors, such certificate will include a copy of the resolution of the Board of Directors relating to such determination. The certificate will be mailed to each holder of shares of Series C Preferred Stock at their last address as the same appears in the stock register of the Corporation.

v) Notwithstanding any provisions of this paragraph (b) to the contrary, the issuance of shares of Common Stock or options therefor pursuant to any employee benefit plan or program of the Corporation or the issuance of any common stock purchase warrant in a transaction where the Board of Directors has unanimously determined that the principal objective of such transaction is other than capital raising, will not cause any adjustment to the Conversion Rate.

(c)Consolidation, Merger or Sale of Assets. In case of any of the following which does not constitute a Liquidation: (i) any recapitalization or reclassification of shares of Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, as a result of a subdivision or combination of the Common Stock), (ii) any consolidation or merger of the Corporation with or into another person or any merger of another person into the Corporation (other than a merger that does not result in a reclassification, conversion, exchange or cancellation of outstanding shares of Common Stock), (iii) any sale or transfer of all or substantially all of the assets of the Corporation or (iv) any compulsory share exchange, pursuant to which any holders of Common Stock will be entitled to receive other securities, cash or other property, then each holder of a share of Series C Preferred Stock then outstanding will have the right thereafter to convert such share only into the kind and amount of securities, cash and other property receivable upon such consolidation, merger, sale, transfer, recapitalization, reclassification or share exchange by a holder of the number of shares of Common Stock into which such share of Series C Preferred Stock might have been converted immediately prior to such consolidation, merger, sale, transfer, recapitalization, reclassification or share exchange. The Corporation formed by such consolidation or resulting from such merger or that acquires such assets or that acquires the Corporation's shares, as the case may be, will make provisions in its certificate or articles of incorporation or other constituent document to establish such right. Such certificate or articles of incorporation or other constituent document will provide for adjustments that, for events subsequent to the effective date of such certificate or articles of incorporation or other constituent document, will be as nearly equivalent as may be practicable to the relevant adjustments provided for in this subsection (c) and subsection (b) of this Section 6.

In case (x) the Corporation will take any action that would result in an adjustment to the Conversion Rate, (y) of any consolidation, merger or share exchange to which the Corporation is a party and for which approval of any stockholders of the Corporation is required or of the sale or transfer of all or substantially all of the assets of the Corporation or (z) of the Liquidation of the Corporation, then the Corporation will cause to be mailed to all holders of shares of Series C Preferred Stock at each such holder's last address as the same appears in the stock register of the Corporation, at least ten days prior to the applicable record or effective date hereinafter specified, a notice stating (A) the date on which a record is to be taken for the purpose of such actions or, if a record is not to be taken, the date as of which the holders of Common Stock of record are to be determined or (B) the date on which any such consolidation, merger, share exchange, sale, transfer or Liquidation is expected to become effective and, if applicable, the date as of which it is expected that holders of Common Stock of record will be entitled to exchange their shares of Common Stock for securities, cash or other property deliverable upon such consolidation, merger, share exchange, sale, transfer or Liquidation. Neither the failure to give such notice nor any defect therein will affect the legality or validity of the proceedings described in this subsection (c).

(d)Mechanics of Conversion. Notice of every conversion of Series C Preferred Stock shall be given by first class mail, postage prepaid, addressed to the holders of record of the shares to be converted. Such mailing shall take place not less than 30 days prior to the date fixed for the conversion. The notice shall provide each holder of Series C Preferred, a duly endorsed Common Stock certificates in accordance with the appropriately calculated conversion rates and accompanied by a transfer instrument sufficient to transfer the Series C Preferred Stock being converted to the Corporation free of any adverse interest. Such holder will surrender the certificate or certificates for the Series C Preferred Stock to be converted to the Corporation. Notwithstanding any certificate that has not been surrendered by the date fixed for conversion, the converted shares of Series C Preferred Stock shall no longer be deemed outstanding and all rights with respect to such shares shall forthwith on such conversion date cease and terminate, except only the right of the holders thereof to receive shares of the Common Stock.

(e)Partial Conversion. In case of any conversion of less than all of the then outstanding shares of Series C Preferred Stock, the shares to be redeemed shall be selected either pro-rata or in such other manner as the Board of Directors of the Corporation or a duly authorized committee thereof may determine to be fair and equitable. If fewer than all the shares represented by any certificate are converted a new certificate shall be issued representing the unconverted shares without charge to the holder thereof.

(f)Dividends; Taxes. In the case of any share of Series C Preferred Stock that is converted after any record date with respect to the payment of a dividend on the Series C Preferred Stock and on or prior to the dividend payment date with respect to such dividend, the dividend due on such dividend payment date will be payable to the holder of record of such share of Series C Preferred Stock as of such record date notwithstanding such conversion. Except as provided in this subsection, holders of Series C Preferred Stock will not be entitled to any payment or adjustment on account of accrued and unpaid dividends on shares of Series C Preferred Stock surrendered for conversion or for dividends, the record date for which was prior to the date of conversion, on the shares of Common Stock issued upon such conversion.

The Corporation will pay any and all documentary stamp or similar issue or transfer taxes payable in respect of the issuance or delivery of shares of Common Stock on conversions of shares of Series C Preferred Stock pursuant hereto; provided, however, that the Corporation will not be required to pay any tax that may be payable in respect of any transfer involved in the issuance or delivery of shares of Common Stock in a name other than that of the holder of the shares of Series C Preferred Stock to be converted or redeemed, and no such issuance or delivery will be made unless and until the person requesting such issuance or delivery has paid to the Corporation the amount of such tax or has established, to the satisfaction of the Corporation, that such tax has been paid.

(g)No Impairment. The Corporation will not, through any reorganization, transfer of assets, consolidation, merger, dissolution, issuance 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 6 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 C Preferred Stock against impairment.

(7) Status of Reacquired Shares. If shares of the Series C Preferred Stock are redeemed pursuant to Section 5 or converted pursuant to Section 6 hereof, the shares so redeemed or converted will, upon compliance with any statutory requirements, assume the status of authorized but unissued shares of Preferred Stock of the Corporation.

(8) Reservation and Issuance of Shares. As long as any shares of Series C Preferred Stock remain outstanding, the Corporation agrees to keep reserved for issuance in connection with the conversion of the Series C Preferred Stock at all times a number of authorized but unissued shares of Common Stock at least equal to the total number of shares of Common Stock issuable upon conversion of all of the Series C Preferred Stock outstanding at such time. The Corporation covenants and agrees that all shares of Common Stock that may be issued upon conversion of shares of Series C Preferred Stock will, upon issuance, be duly and validly issued, fully paid and non-assessable, free of all liens and charges and not subject to any preemptive rights.

(9) Notices. All notices, demands and other communications hereunder will be in writing and will be deemed to have been duly given if delivered by hand or when sent by telex or telecopier (with receipt confirmed), provided a copy is also sent by reputable overnight courier, addressed (a) in the case of a holder of the Series C Preferred Stock, to such holder's address of record and (b) in the case of the Corporation, to the Corporation's principal executive offices to the attention of the Corporation's Secretary.

IN WITNESS WHEREOF, the Corporation has caused this Amended and Restated Certificate of Designations to be signed by its President and Chief Executive Officer on this 29^th day of June, 2015.

/s/Nidal Z. Zayed

Nidal Z. Zayed

President and Chief Executive Officer

Series C Cumulative, Convertible

Preferred Stock Purchase Agreement

This Series C Cumulative, Convertible Preferred Stock Purchase Agreement (“Agreement”) is made as of June 26, 2015 (the “Effective Date”), between Pernix Group, Inc., a Delaware corporation (“Pernix” or “Seller”), and Ernil Continental S.A., BVI (“Buyer”).

RECITALS

Seller desires to sell, and Buyer desires to purchase, shares of Pernix Series C Preferred Stock as delineated for the consideration and on the terms set forth in this Agreement.


Investment Date	Total Shares	Price Per Share	Total Investment
June 26, 2015	990,000	$10.00	$9,900,000.00

AGREEMENT

The Parties, intending to be legally bound, agree as follows:

Definitions. The following defined terms are used in this Agreement:

1.1

“Best Efforts” means the efforts that a prudent person desirous of achieving a result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible.

1.2

“Buyer” means Ernil Continental S.A., BVI, with its European office at Herrengasse 5, PO Box 1155, FL – 9490 Vaduz, Liechtenstein.

1.3

“Closings” means the events described in Section 2.4 and encompass the consummation of the transactions described in this Agreement.

1.4

“Closing Date(s)” means the dates and time as of which the Closing actually takes place.

1.5

“Party” means, individually, the Buyer and the Seller. “Parties” collectively refers to the Buyer and the Seller.

1.6

“Securities Act” means the Securities Act of 1933 or any successor law, and regulations and rules issued pursuant to that Act or any successor law, as well as any other United States securities laws applicable to this transaction.

1.7

“Seller” or “Pernix” or the “Company” means Pernix Group, Inc., a Delaware corporation with its offices at 151 E. 22^nd Street, Lombard, Illinois 60148, United States.

1.8

“Shares” means shares of Series C Cumulative, Convertible Preferred Stock described below in Paragraph 2.1 to be issued by Pernix as a result of this transaction.

Sale and Transfer of Shares; Closing

2.1

Authorization. The Company has, or before the initial Closing will have, duly authorized for the sale and issuance, pursuant to the terms of this Agreement, 990,000 shares of its Series C Cumulative, Convertible Preferred Stock, $0.01 par value per share, having the rights, restrictions, privileges and preferences set forth in the Certificate of Designation, the form of which is attached as Exhibit A. The Company has/will adopt and file the Certificate of Designation with the Secretary of State of Delaware.

2.2

Shares. Subject to the terms and conditions of this Agreement, at the Closings, Seller will sell and transfer a total of Nine Hundred Ninety Thousand (990,000) Shares to Buyer, and Buyer will purchase the Shares from Seller.

2.3

Purchase Price. The purchase price (the “Purchase Price”) for the Shares will be Ten Dollars ($10.00 USD) per share.

2.4

Closings. The purchase and sale (the “Closings”) provided for in this Agreement will take place on or about the dates listed below:

(i) on or about June 26, 2015 (for 990,000 Shares) or

(ii) at such other time and place as the Parties may agree. Subject to the provisions of Section 4, failure to consummate the purchase and sale provided for in this Agreement on the dates and times and at the places determined pursuant to this Section 2.4 will not result in the termination of this Agreement and will not relieve any Party of any obligation under this Agreement.

2.5

Closing Obligations. At each Closing:

2.5.1

Seller will deliver to Buyer: (i) confirmation that funds have been received by the Company and (ii) either a copy of a letter instructing the transfer agent of the Company to issue the new certificates representing the Shares purchased at such Closing or the Company shall deliver to the Buyer a certificate for the number of Shares being purchased at such Closing, registered in the name of the Buyer.

2.5.2

Buyer will deliver to Seller the amount of the aggregate Purchase Price for the Shares purchased at such Closing by wire transfer to an account specified by Pernix.

2.6

Reservation of Common Stock. The Company shall reserve and maintain a sufficient number of shares of Common Stock for issuance upon conversion of all of the outstanding Shares.

2.7

Redemption. The Parties may negotiate in good faith for the redemption of Shares for cash, upon 20 days written request to the Company. Such redemption is not mandatory on the part of the Seller.

Representations and Warranties of the Buyer. Buyer represents and warrants to Seller as follows:

3.1

Buyer is an “accredited investor” as that term is defined in Rule 501 of Regulation D promulgated by the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act. For this purpose, Buyer understands that an “accredited investor” includes:

3.1.1

any individual who: (i) has a net worth (with spouse) in excess of $1 million; or (ii) has had an individual income in excess of $200,000 (or joint income with spouse in excess of $300,000) in each of the two most recent years and who reasonably expects the same income level for the current year; or (iii) who is an executive officer or director of the Company;

3.1.2

any entity in which all of the equity owners or partners are “accredited investors”; or

3.1.3

any corporation or partnership with total assets in excess of $5,000,000 that was not formed for the specific purpose of purchasing the securities sold hereunder.

3.2

Buyer considers itself to be a sophisticated investor in companies similarly situated to the Company, and Buyer has substantial knowledge and experience in financial and business matters (including knowledge of finance, securities and investments, generally, and experience and skill in investments based on actual participation) such that Buyer is capable of evaluating the merits and risks of the prospective investment in the Company.

3.3

Buyer’s current address is as set forth in Section 1.

3.4

Buyer has been advised and acknowledges that the issuance of the Shares, or the shares of common stock into which the Shares may be converted, will not be registered under the Securities Act, in reliance upon the exemption(s) from registration promulgated thereunder, and, therefore, are “restricted securities.” Buyer also acknowledges that the issuance of the Shares will not be registered under the securities laws of any state. Consequently, Buyer agrees that the Shares cannot be resold unless they are registered under the Securities Act and applicable state securities laws, or unless an exemption from such registration requirements is available. Buyer has been advised and acknowledges that the Company is under no obligation to take any action necessary in order to make available any exemption for the transfer of the Shares without registration.

3.5

Buyer is purchasing the Shares, and the shares of common stock into which the Shares may be converted, solely for Buyer’s own account and not as nominee for, representative of, or otherwise on behalf of, any other person. Buyer is purchasing the Shares with the intention of holding the Shares for investment, with no present intention of participating directly or indirectly in a subsequent public distribution of the Shares unless registered under the Securities Act and applicable state securities laws, or unless an exemption from such registration requirements is available. Buyer shall not make any sale, transfer or other disposition of the Shares in violation of state or federal law.

3.6

Buyer has been advised that there is no assurance that the Company will continue to be a “Public Company” (i.e., a company with equity securities registered with the SEC pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) or, even if the Company continues to be a Public Company, that there will be an active market for the Shares or the shares of common stock into which the Shares may be converted. Buyer is aware that Buyer’s investment in the Company is speculative and involves a high degree of risk of loss arising from, among other things, substantial market, operational, competitive and other risks, and, having made Buyer’s own evaluation of the risks associated with this investment, Buyer is aware and Buyer has been advised that Buyer must bear the economic risks of a purchase of the Shares.

3.7

Buyer acknowledges that the Shares were not offered to Buyer by means of any form of general or public solicitation or general advertising, or publicly disseminated advertisements or sales literature, including (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media, or broadcast over television or radio, or (ii) any seminar or meeting to which Buyer was invited by any of the foregoing means of communication.

3.8

Buyer understands and agrees that the Company, and all current and future stockholders of the Company, are relying on the agreements and representations contained herein.

3.9

In connection with the purchase of the Shares by Buyer, Buyer has not paid and will not pay, and has no knowledge of the payment of, any commission or other direct or indirect remuneration to any person or entity for soliciting or otherwise coordinating the purchase of the Shares.

3.10

Buyer has been advised and agrees that there will be placed on any certificates representing the Shares, or the shares of common stock into which the Shares may be converted, or any substitution(s) thereof, a legend stating in substance the following (and including any restrictions or conditions that may be required by any applicable state law), and Buyer has been advised and further agrees that the Company will refuse to permit the transfer of the Shares out of Buyer’s name in the absence of compliance with the terms of such legend:

“The shares represented by this certificate have not been registered under the Securities Act of 1933, as amended, or under any state securities laws and may not be sold, pledged, transferred, assigned or otherwise disposed of except in accordance with such Act and the rules and regulations thereunder and in accordance with applicable state securities laws. The Company will transfer such shares only upon receipt of evidence satisfactory to the Company, which may include an opinion of counsel, that the registration provisions of such Act have been compiled with or that such registration is not required and that such transfer will not violate any applicable state securities laws.”

3.11

Buyer is aware that the Company may offer and sell additional shares of Preferred Stock, Common Stock or other securities in the future, thereby diluting Buyer’s percentage equity ownership of the Company.

3.12

Buyer is acquiring the Shares, or the shares of common stock into which the Shares may be converted, for its own account and not with a view to their distribution within the meaning of Section 2(11) of the Securities Act.

3.13

There is no pending proceeding that has been commenced against Buyer and that challenges, or may have the effect of preventing, delaying, making illegal, or otherwise interfering with, any of the contemplated transactions in this Agreement. To Buyer's knowledge, no such proceeding has been threatened.

3.14

Buyer and its officers and agents have incurred no obligation or liability, contingent or otherwise, for brokerage or finders' fees or agents’ commissions or other similar payment in connection with this Agreement and will indemnify and hold Sellers harmless from any such payment alleged to be due by or through Buyer as a result of the action of Buyer or its officers or agents.

Termination.

4.1

Termination Events. This Agreement may be terminated prior to the Closing by mutual consent of Buyer and Seller.

4.2

Effect of Termination. If this Agreement is terminated pursuant to Section 4.1, all further obligations of the Parties under this Agreement will terminate, except that the obligations in Section 5.1 will survive; provided, however, that if this Agreement is terminated by a Party because of the breach of the Agreement by the other Party or because one or more of the conditions to the terminating Party’s obligations under this Agreement is not satisfied as a result of the other Party’s failure to comply with its obligations under this Agreement, the terminating Party’s right to pursue all legal remedies will survive such termination unimpaired.

General Provisions.

5.1

Expenses. Except as otherwise expressly provided in this Agreement, each Party to this Agreement will bear its respective expenses incurred in connection with the preparation, execution, and performance of this Agreement and the contemplated transactions, including all fees and expenses of agents, representatives, counsel, and accountants.

5.2

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 (i) delivered by hand (with written confirmation of receipt), (ii) sent by telecopier (with written confirmation of receipt), provided that a copy is mailed by registered mail, return receipt requested, or (iii) when received by the addressee, if sent by a nationally recognized overnight delivery service (receipt requested), in each case to the appropriate addresses and telecopier numbers set forth below (or to such other addresses and telecopier numbers as a Party may designate by notice to the other Party):

Seller:

Pernix Group, Inc.

151 E. 22^nd Street

Lombard Ill. 60148 USA

Attention:

Nidal Z. Zayed

CEO and President

Fax:

(630) 620-4753

Buyer:

Ernil Continental S.A., BVI

Herrengasse 5

PO Box 1155

FL – 9490 Vaduz

Attention:

Mrs. Sandra A. Marc-Büchel

Director & President

Fax:

00423 237 69 78

5.3

Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by any Party in exercising any right, power, or privilege under this Agreement or the documents referred to in 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, (i) no claim or right arising out of this Agreement or the documents referred to in this Agreement can be discharged by one Party, in whole or in part, by a waiver or renunciation of the claim or right unless in writing signed by the other Party; (ii) no waiver that may be given by a Party will be applicable except in the specific instance for which it is given; and (iii) 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 or the documents referred to in this Agreement.

5.4

Entire Agreement and Modification. This Agreement supersedes all prior agreements between the Parties with respect to its subject matter and constitutes (along with the documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement between the Parties with respect to its subject matter. This Agreement may not be amended except by a written agreement executed by the Party to be charged with the amendment.

5.5

Assignments, Successors, No Third-Party Rights. Neither Party may assign any of its rights under this Agreement without the prior consent of the other Party (which will not be unreasonably withheld), except that Buyer may assign any of its rights under this Agreement to any Subsidiary of Buyer. Subject to the preceding sentence, this Agreement will apply to, be binding in all respects upon, and inure to the benefit of the successors and permitted assigns of the Parties. Nothing expressed or referred to in this Agreement will be construed to give any person or entity other than the Parties to this Agreement any legal or equitable right, remedy, or claim under or with respect to this Agreement or any provision of this Agreement. This Agreement and all of its provisions and conditions are for the sole and exclusive benefit of the Parties to this Agreement and their successors and assigns.

5.6

Severability. If any provision of this Agreement is held invalid or unenforceable by any court of competent jurisdiction, the other provisions of this Agreement will remain in full force and effect. Any provision of this Agreement held invalid or unenforceable only in part or degree will remain in full force and effect to the extent not held invalid or unenforceable.

5.7

Governing Law. This Agreement will be governed by the laws of the State of Delaware without regard to conflicts of laws principles.

5.8

Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the same agreement.

IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of the Effective Date through their duly authorized and empowered representatives.


Buyer:		Seller:
	/s/ Sandra A. Marc-Büchel		/s/ Nidal Z. Zayed
	Sandra A. Marc-Büchel		Nidal Z. Zayed
	Director & President		President & Chief Executive Officer
	Ernil Continental S.A., BVI		Pernix Group, Inc.

Series C Cumulative, Convertible

Preferred Stock Purchase Agreement

RECITALS

Seller desires to sell, and Buyer desires to purchase, shares of Pernix Series C Preferred Stock as delineated for the consideration and on the terms set forth in this Agreement.


Investment Date	Total Shares	Price Per Share	Total Investment
June 26, 2015	810,000	$10.00	$8,100,000.00

AGREEMENT

The Parties, intending to be legally bound, agree as follows:

Definitions. The following defined terms are used in this Agreement:

1.1

“Best Efforts” means the efforts that a prudent person desirous of achieving a result would use in similar circumstances to ensure that such result is achieved as expeditiously as possible.

1.2

“Buyer” means Halbarad Group, Ltd., BVI, with its European office at Herrengasse 5, PO Box 1155, FL – 9490 Vaduz, Liechtenstein.

1.3

“Closings” means the events described in Section 2.4 and encompass the consummation of the transactions described in this Agreement.

1.4

“Closing Date(s)” means the dates and time as of which the Closing actually takes place.

1.5

“Party” means, individually, the Buyer and the Seller. “Parties” collectively refers to the Buyer and the Seller.

1.6

1.7

“Seller” or “Pernix” or the “Company” means Pernix Group, Inc., a Delaware corporation with its offices at 151 E. 22^nd Street, Lombard, Illinois 60148, United States.

1.8

“Shares” means shares of Series C Cumulative, Convertible Preferred Stock described below in Paragraph 2.1 to be issued by Pernix as a result of this transaction.

Sale and Transfer of Shares; Closing

2.1

Authorization. The Company has, or before the initial Closing will have, duly authorized for the sale and issuance, pursuant to the terms of this Agreement, 810,000 shares of its Series C Cumulative, Convertible Preferred Stock, $0.01 par value per share, having the rights, restrictions, privileges and preferences set forth in the Certificate of Designation, the form of which is attached as Exhibit A. The Company has/will adopt and file the Certificate of Designation with the Secretary of State of Delaware.

2.2

Shares. Subject to the terms and conditions of this Agreement, at the Closings, Seller will sell and transfer a total of Eight Hundred Ten Thousand (810,000) Shares to Buyer, and Buyer will purchase the Shares from Seller.

2.3

Purchase Price. The purchase price (the “Purchase Price”) for the Shares will be Ten Dollars ($10.00 USD) per share.

2.4

Closings. The purchase and sale (the “Closings”) provided for in this Agreement will take place on or about the dates listed below:

(i) on or about June 26, 2015 (for 810,000 Shares); or

2.5

Closing Obligations. At each Closing:

2.5.1

2.5.2

Buyer will deliver to Seller the amount of the aggregate Purchase Price for the Shares purchased at such Closing by wire transfer to an account specified by Pernix.

2.6

Reservation of Common Stock. The Company shall reserve and maintain a sufficient number of shares of Common Stock for issuance upon conversion of all of the outstanding Shares.

2.7

Redemption. The Parties may negotiate in good faith for the redemption of Shares for cash, upon 20 days written request to the Company. Such redemption is not mandatory on the part of the Seller.

Representations and Warranties of the Buyer. Buyer represents and warrants to Seller as follows:

3.1

3.1.1

3.1.2

any entity in which all of the equity owners or partners are “accredited investors”; or

3.1.3

any corporation or partnership with total assets in excess of $5,000,000 that was not formed for the specific purpose of purchasing the securities sold hereunder.

3.2

3.3

Buyer’s current address is as set forth in Section 1.

3.4

3.5

3.6

3.7

3.8

Buyer understands and agrees that the Company, and all current and future stockholders of the Company, are relying on the agreements and representations contained herein.

3.9

3.10

3.11

3.12

3.13

3.14

Termination.

4.1

Termination Events. This Agreement may be terminated prior to the Closing by mutual consent of Buyer and Seller.

4.2

General Provisions.

5.1

5.2

Seller:

Pernix Group, Inc.

151 E. 22^nd Street

Lombard Ill. 60148 USA

Attention:

Nidal Z. Zayed

CEO and President

Fax:

(630) 620-4753

Buyer:

Halbarad Group, Ltd., BVI

Herrengasse 5

PO Box 1155

FL – 9490 Vaduz

Attention:

Mrs. Sandra A. Marc-Büchel

Director & President

Fax:

00423 237 69 78

5.3

5.4

5.5

5.6

5.7

Governing Law. This Agreement will be governed by the laws of the State of Delaware without regard to conflicts of laws principles.

5.8

IN WITNESS WHEREOF, the Parties have executed and delivered this Agreement as of the Effective Date through their duly authorized and empowered representatives.


Buyer:		Seller:
	/s/ Sandra A. Marc-Büchel		/s/ Nidal Z. Zayed
	Sandra A. Marc-Büchel		Nidal Z. Zayed
	Director & President		President & Chief Executive Officer
	Halbarad Group, Ltd., BVI		Pernix Group, Inc.

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PRXG Pernix Group Inc (CE)