<SEC-DOCUMENT>0001193125-12-212095.txt : 20120504
<SEC-HEADER>0001193125-12-212095.hdr.sgml : 20120504
<ACCEPTANCE-DATETIME>20120504163653
ACCESSION NUMBER:		0001193125-12-212095
CONFORMED SUBMISSION TYPE:	8-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20120430
ITEM INFORMATION:		Unregistered Sales of Equity Securities
ITEM INFORMATION:		Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
ITEM INFORMATION:		Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year
ITEM INFORMATION:		Financial Statements and Exhibits
FILED AS OF DATE:		20120504
DATE AS OF CHANGE:		20120504

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			American Electric Technologies Inc
		CENTRAL INDEX KEY:			0001043186
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRICAL INDUSTRIAL APPARATUS [3620]
		IRS NUMBER:				593410234
		STATE OF INCORPORATION:			FL
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		8-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-24575
		FILM NUMBER:		12814831

	BUSINESS ADDRESS:	
		STREET 1:		6410 LONG DRIVE
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77087
		BUSINESS PHONE:		713-644-8182

	MAIL ADDRESS:	
		STREET 1:		6410 LONG DRIVE
		CITY:			HOUSTON
		STATE:			TX
		ZIP:			77087

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AMERICAN ACCESS TECHNOLOGIES INC
		DATE OF NAME CHANGE:	19971117
</SEC-HEADER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>d347861d8k.htm
<DESCRIPTION>FORM 8-K
<TEXT>
<HTML><HEAD>
<TITLE>Form 8-K</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">
 <P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P>
<P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P> <P STYLE="margin-top:4px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>UNITED STATES </B></FONT></P>
<P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>SECURITIES AND EXCHANGE COMMISSION </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>Washington, D.C. 20549 </B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="5"><B>FORM 8-K
</B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="4"><B>CURRENT REPORT </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="3"><B>Pursuant to Section&nbsp;13 OR 15(d) of The </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>Securities Exchange Act of
1934 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="3"><B>Date of Report (Date of earliest event reported): April&nbsp;30, 2012 </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center>
<P STYLE="margin-top:6px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="6"><B>AMERICAN ELECTRIC TECHNOLOGIES, INC. </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>(Exact name of registrant as specified in its charter) </B></FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center>
<P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="34%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="32%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="32%"></TD></TR>


<TR>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Florida</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>000-24575</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>59-3410234</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(State or other jurisdiction</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>of incorporation)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Commission</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>File Number)</B></FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(IRS Employer</B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:1px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="1"><B>Identification No.)</B></FONT></P></TD></TR>
<TR>
<TD HEIGHT="16" COLSPAN="3"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>6410 Long Drive, Houston, TX</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>77087</B></FONT></TD></TR>
<TR>
<TD VALIGN="top" COLSPAN="3" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Address of principal executive offices)</B></FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="1"><B>(Zip Code)</B></FONT></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Registrant&#146;s telephone number, including area code 713-644-8182 </B></FONT></P>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P><center> <P STYLE="line-height:6px;margin-top:0px;margin-bottom:2px;border-bottom:1pt solid #000000;width:21%">&nbsp;</P></center> <P STYLE="margin-top:6px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2">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): </FONT></P> <P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) </FONT></TD></TR></TABLE>
<P STYLE="font-size:6px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE STYLE="BORDER-COLLAPSE:COLLAPSE" BORDER="0" CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR>
<TD WIDTH="4%" VALIGN="top" ALIGN="left"><FONT STYLE="font-family:Times New Roman" SIZE="2"><FONT STYLE="FONT-FAMILY:WINGDINGS">&#168;</FONT></FONT></TD>
<TD ALIGN="left" VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) </FONT></TD></TR></TABLE>
<P STYLE="font-size:8px;margin-top:0px;margin-bottom:0px">&nbsp;</P> <P STYLE="line-height:0px;margin-top:0px;margin-bottom:0px;border-bottom:0.5pt solid #000000">&nbsp;</P>
<P STYLE="line-height:3px;margin-top:0px;margin-bottom:2px;border-bottom:0.5pt solid #000000">&nbsp;</P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;3.02 Unregistered Sales of Equity Securities </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On May&nbsp;2, 2012 American Electric Technologies, Inc. (the &#147;Company&#148;) completed the previously announced private placement of
Series A Convertible Preferred Stock and Common Stock Purchase Warrants. The Company received proceeds of $5,000,325 and issued 1,000,000 shares of its Series A Convertible Preferred Stock (the &#147;Series A Preferred Stock&#148;) and 325,000
Common Stock Purchase Warrants (the &#147;Warrants&#148;) to JCH Crenshaw Holdings, LLC. (the &#147;Investor&#148;). </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The
principal terms of the Series A Preferred Stock are: </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Rank </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">The Series A Preferred Stock ranks senior to the Company&#146;s junior equity securities, including our common stock. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Dividends </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Series A Preferred Stock accrues cumulative dividends at a
rate of 6%&nbsp;per annum, equivalent to $0.30 per share, whether or not dividends have been declared by the Board of Directors and whether or not there are profits, surplus or other funds available for the payment of such dividends. Such dividends
are in preference to all other classes of stock junior in rank to the Series A Preferred Stock, including our common stock. The Company may pay such dividends in shares of the Company&#146;s common stock based on the then current market price of our
common stock. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Conversion </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Each share of Series A Preferred Stock is initially convertible, at the option of the holder, into one (1)&nbsp;share of common stock at a conversion price of $5.00 per share of common stock, so that the
1,000,000 shares sold to the Investor is initially convertible into an aggregate of 1,000,000 shares of common stock. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Adjustment of
Conversion Price </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The conversion price of the Series A Preferred Stock is subject to adjustment for specified events,
including stock splits, reclassifications and exchanges, issuance of stock dividends, mergers and certain sales of assets and certain issuances of common stock or other securities convertible into or exercisable for common stock at prices that are
or are deemed to be below the conversion price at the time of such issuance. A decrease in the conversion price due to our issuance of common stock in the future at prices below the then applicable conversion price will result in the holders of the
Series A Preferred Stock receiving more than the 1,000,000 shares of our common stock into which their shares are convertible as of the original issuance of the Series A Preferred Stock. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Mandatory Conversion </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Company has the right to cause all of the
outstanding Series A Preferred Stock to be converted into common stock at the then applicable conversion price if the closing price of our common stock has equaled or exceeded 150% of the conversion price then if effect for at least 90 consecutive
stock market trading days. The Company must pay all accrued and unpaid dividends on the Series A Preferred Stock prior to exercising its right to cause the conversion of the Series A Preferred Stock into common stock. </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Redemption Rights </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">At any time on or after May&nbsp;2, 2017, the holders of a majority of the outstanding Series A Preferred Stock, may require the Company to redeem all of the then outstanding Series A Preferred Stock for
an amount in cash equal to the lesser of (i)&nbsp;100% of the aggregate Liquidation Preference of the Series A Preferred Stock then outstanding or (ii)&nbsp;the fair market value of the Series A Preferred Stock as determined in good faith by the
Board of Directors. The holders of a majority of the outstanding Series A Preferred Stock may also require the Company to redeem all of the then outstanding Series A Preferred Stock at any time following a material default by the Company of any of
the representations, warranties or covenants of the Company in the Securities Purchase Agreement. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Liquidation Preference </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary (a &#147;Liquidation&#148;), the
Investors shall be entitled to receive out of the assets of the Company, whether such assets are capital or surplus, for each share of Series A Preferred Stock to the Liquidation Value, initially $5.00 per share, the Series A Preferred Stock plus
any accrued and unpaid dividends thereon before any distribution or payment shall be made to the holders of any junior securities (including, without limitation, the common stock). Certain mergers or consolidations involving the Company or sales of
all or substantially all of the capital stock or assets of the Company will be deemed to be a liquidation, dissolution or winding up of the Company unless the holders of a majority of the then outstanding Series A Preferred Stock elect not to treat
such transactions as liquidation events. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Voting Rights and Right to Appoint a Director </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Series A Preferred Stock will vote on an as converted basis with the Company&#146;s common stock, subject to certain limitations. The
holders of a majority of the outstanding Series A Preferred Stock will have the right to appoint one individual to serve as a voting member of the Company&#146;s Board of Directors (the &#147;Preferred Director&#148;). </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Limitations on Issuance and Voting </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Because a future reduction in the conversion price of the Series A Preferred Stock and exercise price of the Warrants may result in the issuance of additional shares of common stock to the Investor, the
Securities Purchase Agreement prohibits the issuance of 20% or more of our common stock or voting power outstanding as of the closing without stockholder approval. These provisions are required by rules of the NASDAQ Stock Market. The Company will
seek the approval of its stockholders at the 2012 Annual Meeting of Stockholders. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Certain Approval Rights </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">So long as the shares of Series A Preferred Stock on an as converted to Common Stock basis represent 5% or more of the Corporation&#146;s
outstanding capital stock, the Company shall not (by amendment, merger, consolidation or otherwise) without first obtaining the approval of the holders of at least a majority of the then outstanding shares of Series A Preferred Stock: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) amend, alter, waive, repeal or modify any provision of its Articles of Incorporation or Bylaws of the Corporation so as to adversely
affect or otherwise impair any of the rights, preferences, privileges, qualifications, limitations or restrictions of, or applicable to, the Series A Preferred Stock; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(b) authorize or issue, or obligate itself to issue, any other equity security, including any security convertible into or exercisable for any equity security, having rights, preferences or privileges
senior to or on a parity with the Series A Preferred Stock; </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) alter or change any rights, preferences or privileges of the Series A Preferred Stock;
or </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) increase or decrease (other than by conversion) the total number of authorized shares of Series A Preferred Stock.
</FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Rights to Participate in Future Financings </B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">At any time while the Series A Preferred Stock owned by the Investor represents on an as converted basis 5% or more of our common stock the Investor shall have a right to participate pro-rata with respect
to the issuance by the Company of any future equity or equity-linked securities or debt which is convertible into or exercisable or exchangeable for equity or in which there is an equity component on the same terms and conditions as offered by the
Company to the other purchasers of such securities. Such rights do not apply to any issuances made: (a)&nbsp;to employees, officers, directors, consultants and advisors of the Company pursuant to any incentive plan, stock purchase plan, agreement or
other arrangement duly adopted by the Company and approved by the compensation committee of the Board; (b)&nbsp;upon exercise of the Warrants; (c)&nbsp;upon issuance or conversion of the Series A Preferred Stock; (c)&nbsp;in connection with a
merger, acquisition, asset acquisition, lease, joint venture or similar acquisitive transaction approved by the Board; and (d)&nbsp;for services to financial institutions in connection with investment banking, commercial credit transactions,
equipment financing or similar transactions approved by the Board. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The principal terms of the Warrants are: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Warrants will be exercisable until May&nbsp;2, 2012 for 125,000 shares of common stock at an exercise price of $6.00 per share and
200,000 shares at an exercise price of $7.00 per share. The exercise price of the Warrants is subject to adjustment for specified events, including stock splits, reclassifications and exchanges, issuance of stock dividends, mergers and certain sales
of assets and certain issuances of common stock or other securities convertible into or exercisable for common stock at prices that are or are deemed to be below the exercise price at the time of such issuance. The holders of the Warrants have the
option to exercise the warrants on a &#147;net share&#148; or &#147;cashless&#148; basis, in which the Company withholds a sufficient number of shares of common stock from the exercise with a market value equal to the exercise price, in which case
the Company would receive no additional proceeds upon their exercise, but fewer shares would be issued. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Registration Rights
</B></FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pursuant to a Registration Rights Agreement the Company has agreed to register with the SEC for resale the common stock
underlying the Series A Preferred Stock and the Warrants at the request of holders. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">The Series A Preferred Stock and the
Warrants were sold in a transaction exempt from registration under the Securities Act of 1933 (the &#147;Securities Act&#148;), in reliance on Section&nbsp;4(2) thereof and Rule 506 of Regulation D thereunder. The Investor represented that it is
acquiring the securities for its own account for investment purposes only and not with a view to the distribution thereof and that Investor is an accredited investor as that term is defined in Regulation D under the Securities Act. Investor
acknowledged that the securities have not been registered under the Securities Act or any state securities Laws, and that Investor will not sell, transfer, assign, pledge, hypothecate or otherwise dispose of any or all of the securities, except to
an affiliate, absent a valid exemption from the registration and prospectus delivery requirements of the Securities Act and the registration or qualification requirements of any applicable state securities laws. The certificates representing the
Series A Preferred Stock and the Warrants contain a legend restricting further sale or transfer without compliance with applicable securities laws. </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On May&nbsp;1, 2012 the Company received from JPMorgan Chase Bank, N.A., the lender under
its revolving loan agreement, written consent to the sale of the Series A Preferred Stock and Warrants to the Investor, the filing of the Articles of Amendment to its Articles of Incorporation as discussed in Item&nbsp;5.03 herein and an amendment
to the revolving loan agreement to allow the Company to pay dividends on the Series A Preferred Stock and redeem the Series A Preferred Stock in accordance with the terms thereof. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pursuant to the terms of the private placement, Casey Crenshaw became a member of the Company&#146;s Board of Directors on May&nbsp;2,
2012 as the Preferred Director. Mr.&nbsp;Crenshaw will be reimbursed for the reasonable expenses incurred in attending meetings of the Board. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">Mr.&nbsp;Crenshaw, age 37, is currently serving as Executive Vice President and as a member of the Board of Directors of The Modern Group, Ltd, a privately owned diversified manufacturing, parts and
distribution, rental/leasing and finance business. Mr.&nbsp;Crenshaw has held various positions including CEO and CFO since 1997 with The Modern Group. Mr.&nbsp;Crenshaw holds a BA in Finance from Texas A&amp;M University. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">On April&nbsp;30, 2012 the Company amended its Articles of Incorporation to designate 1,000,000 shares of its authorized Preferred Stock
as Series A Convertible Preferred Stock and fix the voting, dividend, conversion, priorities, preferences and relative and other rights and qualifications, limitations and restrictions of the Series A Convertible Preferred Stock. A copy of the
Articles of Amendment is set forth as Exhibit 3.1 hereto. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Item&nbsp;9.01 Financial Statements and Exhibits </B></FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">Exhibits. </FONT></P> <P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD></TD>
<TD VALIGN="bottom" WIDTH="8%"></TD>
<TD WIDTH="90%"></TD></TR>
<TR>
<TD VALIGN="bottom" NOWRAP> <P STYLE="border-bottom:1px solid #000000;width:37pt"><FONT STYLE="font-family:Times New Roman" SIZE="1">Exhibit&nbsp;No.</FONT></P></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="bottom"> <P STYLE="border-bottom:1px solid #000000;width:37pt"><FONT STYLE="font-family:Times New Roman" SIZE="1">Description</FONT></P></TD></TR>


<TR>
<TD HEIGHT="8"></TD>
<TD HEIGHT="8" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top" NOWRAP><FONT STYLE="font-family:Times New Roman" SIZE="2">3.1</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Articles of Amendment to Registrant&#146;s Articles of Incorporation filed April 30, 2012.</FONT></TD></TR>
</TABLE>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>SIGNATURES </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">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. </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE">


<TR>
<TD WIDTH="46%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="4%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="2%"></TD>
<TD VALIGN="bottom" WIDTH="1%"></TD>
<TD WIDTH="45%"></TD></TR>


<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" COLSPAN="5"><FONT STYLE="font-family:Times New Roman" SIZE="2">AMERICAN ELECTRIC TECHNOLOGIES, INC.</FONT></TD></TR>
<TR>
<TD HEIGHT="16"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD>
<TD HEIGHT="16" COLSPAN="2"></TD></TR>
<TR>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Date: May&nbsp;4, 2012</FONT></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">By:</FONT></TD>
<TD VALIGN="bottom" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top" STYLE="BORDER-BOTTOM:1px solid #000000"><FONT STYLE="font-family:Times New Roman" SIZE="2">/s/ Frances Powell Hawes</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Frances Powell Hawes</FONT></TD></TR>
<TR>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"></TD>
<TD VALIGN="bottom"><FONT SIZE="1">&nbsp;</FONT></TD>
<TD VALIGN="top"><FONT STYLE="font-family:Times New Roman" SIZE="2">Senior Vice President and CFO</FONT></TD></TR>
</TABLE>
</BODY></HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.1
<SEQUENCE>2
<FILENAME>d347861dex31.htm
<DESCRIPTION>ARTICLES OF AMENDMENT TO REGISTRANT'S ARTICLES OF INCORPORATION
<TEXT>
<HTML><HEAD>
<TITLE>Articles of Amendment to Registrant's Articles of Incorporation</TITLE>
</HEAD>
 <BODY BGCOLOR="WHITE">
 <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="right"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>Exhibit 3.1 </B></FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px" ALIGN="center"><FONT
STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLES OF AMENDMENT OF </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>ARTICLES OF RESTATEMENT OF ARTICLES OF
INCORPORATION OF </B></FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>AMERICAN ELECTRIC TECHNOLOGIES, INC. </B></FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">Pursuant to the provisions of Section&nbsp;507.1006 and 607.0602 of the Florida Business Corporation Act, the undersigned Corporation
adopts the following Articles of Amendment to its Articles of Incorporation. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">FIRST: The name of the Corporation is American
Electric Technologies, Inc. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">SECOND: Set forth below is a resolution duly adopted by the Board of Directors on March&nbsp;23,
2012 establishing a series of Preferred Stock of this Corporation. The amendment was duly adopted by the Board of Directors without shareholder action and shareholder action was not required. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2"><B>IN WITNESS WHEREOF, </B>the undersigned has executed these Articles of Amendment as of April&nbsp;30, 2012. </FONT></P>
<P STYLE="font-size:12px;margin-top:0px;margin-bottom:0px">&nbsp;</P>
<TABLE CELLSPACING="0" CELLPADDING="0" WIDTH="100%" BORDER="0" STYLE="BORDER-COLLAPSE:COLLAPSE" ALIGN="center">


<TR>
<TD WIDTH="100%"></TD></TR>


<TR>
<TD VALIGN="top"> <P STYLE="margin-left:25.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">AMERICAN ELECTRIC TECHNOLOGIES, INC.</FONT></P></TD></TR>
<TR>
<TD HEIGHT="16"></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:25.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">s/Charles M. Dauber</FONT></P></TD></TR>
<TR>
<TD VALIGN="top"> <P STYLE="margin-left:25.00em; text-indent:-1.00em"><FONT STYLE="font-family:Times New Roman" SIZE="2">Title: President</FONT></P></TD></TR>
</TABLE> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">RESOLVED, that pursuant to the authority vested in the Board of Directors in accordance with the
provisions of the Amended and Restated Articles of Incorporation, a series of Preferred Stock of the Corporation be, and. it hereby is, created out of the authorized but unissued shares of the authorized Preferred Stock of the Corporation, such
series to be designated Series A Convertible Preferred Stock and having the voting, dividend, conversion, priorities, preferences and relative and other rights and qualifications, limitations and restrictions set forth as follows: </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1,000,000 shares of Preferred Stock of the Corporation are hereby designated as &#147;Series A Convertible Preferred Stock&#148; (the
&#147;<B>Series A Preferred Stock</B>&#148;), par value $.001 per share, which shall have the rights, preferences, privileges, and restrictions granted to and imposed on the Series A Preferred Stock as set forth below. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">1. <B><U>Dividends</U>. </B> </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) Holders of the Series A Preferred Stock shall be entitled to receive, when, as and if declared, by the Board of Directors of the Corporation, or a duly authorized committee thereof, out of funds of
the Corporation legally available for such purpose, preferential cumulative cash dividends at the rate of 6.00%&nbsp;per annum of the Liquidation Preference (as defined below) per share. Such dividends shall be payable in cash or in shares of the
Corporation&#146;s common stock, par value $.001 per share (the &#147;<B>Common Stock</B>&#148;), at the option of </FONT></P>

<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
the Corporation as set forth below, quarterly in arrears on each March&nbsp;20,&nbsp;June&nbsp;20,&nbsp;September&nbsp;20 and December&nbsp;20 of each year or, if not a Business Day (as defined
below), the next succeeding Business Day (each, a &#147;<B>Dividend Payment Date</B>&#148;), beginning on June&nbsp;20, 2012. Any dividend payable on the Series A Preferred Stock for any partial dividend period will be computed on the basis of
twelve 30-day months and a 360-day year. Dividends will be payable in arrears to holders of record as they appear on the share transfer records of the Corporation at the close of business on the applicable record date, which shall be the fifteenth
day of March, June, September or December, as the case may be, immediately preceding the applicable Dividend Payment Date. As used in these Articles of Incorporation, the term &#147;Business Day&#148; means any day other than a Saturday or Sunday on
which commercial banks located in New York, New York are open for the general transaction of business. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) No dividends on
Series A Preferred Stock shall be authorized by the Board of Directors of the Corporation or declared or paid or set apart for payment by the Corporation at such time as the terms and provisions of any agreement of the Corporation relating to the
Corporation&#146;s indebtedness prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof or a default thereunder, or if such
declaration or payment shall be restricted or prohibited by law. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) Dividends on the Series A Preferred Stock shall accrue
on each share from the date on which such share was issued by the Corporation, and shall accrue from day to day, whether or not earned or declared. Such dividends shall be cumulative so that, if such dividends in respect of any previous or current
quarterly dividend period, at the annual rate specified above, shall not have been paid, the deficiency shall first be fully paid before any dividend or other distribution shall be paid on or declared and set apart for the Common Stock, or any other
capital stock. Any accumulation of dividends on the Series A Preferred Stock shall not bear interest. Cumulative dividends with respect to a share of Series A Preferred Stock which are accrued, payable and/or in arrears shall, upon conversion of
such share to Common Stock, be paid to the extent assets are legally available therefor. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) At the option of the
Corporation, dividends on Series A Preferred Stock may paid in that number of shares of Common Stock equal to the quotient of (A)&nbsp;the amount of dividends to be so paid divided by (B)&nbsp;the Current Market Price (as defined below) per share of
Common Stock. &#147;<B>Current Market Price</B>&#148; means the 10-day average of the daily Closing Price per share of the Common Stock (or other relevant capital stock) on each of the five consecutive Trading Days preceding and following the
Dividend Payment Date. &#147;<B>Closing Price</B>&#148; means, with respect to the Common Stock (or other relevant capital stock) on any date of determination, the closing sale price or, if no closing sale price is reported, the last reported sale
price of the shares of the Common Stock (or other relevant capital stock) as reported on the NASDAQ Global Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the New York Stock Exchange (an &#147;<B>Approved Market</B>&#148;) on
such date. If the Common Stock (or other relevant capital stock) is not traded on an Approved Market, the Closing Price of the Common Stock (or other relevant capital stock) on such date of determination means the closing sale price as reported in
the composite transactions for the principal U.S. national or regional securities exchange on which the Common Stock (or other relevant capital stock) is so listed or quoted, or, if no closing sale price is reported, the last reported sale price on
the principal U.S. national or </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">2 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
regional securities exchange on which the Common Stock (or other relevant capital stock) is so listed or quoted, or if the Common Stock (or other relevant capital stock) is not so listed or
quoted on a U.S. national or regional securities exchange, the last quoted bid price for the Common Stock (or other relevant capital stock) in the over-the-counter market or, if that bid price is not available, the market price of the Common Stock
(or other relevant capital stock) on that date as determined in good faith by the Board of Directors. &#147;<B>Trading Day</B>&#148; means a day during which the trading of securities generally occurs on the Approved Market or other principal U.S.
national or regional securities exchange on which the Common Stock is then listed or if the Common Stock is not then listed or quoted on an Approved Market or a U.S. national or regional securities exchange, on the over-the-counter market on which
the Common Stock is then quoted. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) Unless all accrued dividends on the Series A Preferred Stock shall have been paid or
declared, and a sum sufficient for the payment thereof set apart, no dividend shall be paid or declared, and no distribution shall be made, on any Common Stock or any other class or series of stock of the Corporation. After payment of such dividends
to the Series A Preferred Stock, any additional dividends shall be distributed among the holders of Series A Preferred Stock and Common Stock pro rata based on the number of shares of Common Stock then held by each holder (assuming conversion of all
such Series A Preferred Stock into Common Stock). </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">2. <U><B>Liquidation</B></U>. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) <U>Preference</U>. In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the
holders of the Series A Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to the holders of Common Stock by reason of their ownership thereof, an amount equal to $5.00
for each share of Series A Preferred Stock then held by them, plus all unpaid dividends that have been accrued, accumulated or declared (together, the &#147;<B>Liquidation Preference</B>&#148;). If, upon the occurrence of such event, the assets and
funds thus distributed among the holders of the Series A Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then the entire assets and funds of the Corporation legally available
for distribution shall be distributed ratably among the holders of the Series A Preferred Stock in proportion to the preferential amount each such holder is otherwise entitled to receive under this <U>Section&nbsp;2(a)</U>. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Remaining Assets</U>.<B> </B>Upon the completion of the distribution to the holders of Series A Preferred Stock pursuant to
<U>Section&nbsp;2(a)</U>, if assets remain in the Corporation, the holders of the Common Stock of the Corporation shall receive all of the remaining assets of the Corporation which shall be distributed ratably among such holders in proportion to
their respective number of issued and outstanding shares of Common Stock then held. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) <U>Certain Acquisitions</U>.
</FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <U>Deemed Liquidation</U>. For
purposes of this <U>Section&nbsp;2</U>, a liquidation, dissolution or winding up of the Corporation shall be deemed to occur if the Corporation shall (A)&nbsp;merge with or into, or consolidate with any other corporation, limited liability company
or other entity (other than a wholly-owned </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">3 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">
subsidiary of the Corporation) or undergo a reorganization, unless the holders of at least a majority of the then outstanding shares of Series A Preferred Stock, voting as a single class, elect
not to treat the transaction as a Liquidation Transaction, or (B)&nbsp;sell, convey, or otherwise dispose of all or substantially all of its property or business (any such transaction, unless elected otherwise, a &#147;<B>Liquidation
Transaction</B>&#148;); provided, however, that none of the following shall be considered a Liquidation Transaction: (x)&nbsp;a merger effected exclusively for the purpose of changing the domicile of the Corporation, (y)&nbsp;an equity financing in
which the Corporation is the surviving corporation, or (z)&nbsp;a transaction in which the shareholders of the Corporation existing immediately prior to the transaction own fifty percent (50%)&nbsp;or more of the voting securities of the surviving
corporation or other entity following the transaction. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <U>Notice of Liquidation Transaction</U>. The
Corporation shall give each holder of record of Series A Preferred Stock written notice (the &#147;<B>First Notice</B>&#148;) of any impending Liquidation Transaction not later than five Business Days prior to the shareholders&#146; meeting called
to approve such Liquidation Transaction, or five Business Days prior to the closing of such Liquidation Transaction, whichever is earlier, and shall also notify such holders in writing of the final approval of such Liquidation Transaction no later
than one Business Day after such final approval. The First Notice shall describe the material terms and conditions of the impending Liquidation Transaction, and the Corporation shall give such holders prompt notice of any material changes to the
terms and conditions of the Liquidation Transaction that occur after the First Notice. Unless such notice requirements are waived, the Liquidation Transaction shall not take place earlier than the later to occur of (x)&nbsp;five Business Days after
the Corporation has given the First Notice and (y)&nbsp;five Business Days after the Corporation has given notice of any material changes provided for herein. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <U>Effect of Noncompliance</U>. In the event the requirements of this <U>Section&nbsp;2(c) </U>are not complied with, the
Corporation shall either cause the closing of the Liquidation Transaction to be postponed until the requirements of this <U>Section&nbsp;2 </U>have been complied with or cancel such Liquidation Transaction, in which event the rights, preferences,
privileges and restrictions of the holders of Series A Preferred Stock shall revert to and be the same as such rights, preferences, privileges and restrictions existing immediately prior to the date of the First Notice. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">3. <B><U>Redemption</U>.</B> </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(a) <U>Redemption at the Option of the Holders</U>. At any time following (i)&nbsp;the fifth anniversary of the Purchase Date (as defined below) or (ii)&nbsp;a material default by the Corporation of any
of the representations, warranties or covenants of the Corporation contained in the Securities Purchase Agreement (the &#147;<B>Purchase Agreement</B>&#148;) by and between the Corporation and JCH Crenshaw Holdings, LLC dated as of April&nbsp;13,
2012, the transactions pursuant to which closed on April&nbsp;30, 2012 (the &#147;<B>Purchase Date</B>&#148;), the holders of a majority of the Series A Preferred Stock may compel the Corporation to redeem the Series A Preferred Stock, in whole and
not in part, by providing written notice to the Corporation (the &#147;<B>Redemption </B> </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">4 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
<B>Notice</B>&#148;), for cash at a redemption price equal to the lesser of (x)&nbsp;the Liquidation Preference per share and (y)&nbsp;the fair market value of the Series A Preferred Stock per
share, as determined in good faith by the Board of Directors (the &#147;<B>Redemption Price</B>&#148;). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Payment of
Redemption Price</U>. The Redemption Price, plus any accrued and unpaid dividends, whether or not declared, on such redeemed shares of Series A Preferred Stock, shall be payable to the holders of the Series A Preferred Stock (the &#147;<B>Redemption
Date</B>&#148;), (i)&nbsp;with respect to a redemption pursuant to clause (i)&nbsp;of the first sentence of <U>Section&nbsp;3(a)</U>, in 36 equal monthly installments beginning on April&nbsp;30, 2017 plus interest at an annual rate of 6.00%, and
(ii)&nbsp;with respect to a redemption pursuant to clause (ii)&nbsp;of the first sentence of <U>Section&nbsp;3(a)</U>, within 30 days of such default, out of funds legally available therefor. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) <U>Mechanics of Redemption</U>. Each holder of Series A Preferred Stock shall surrender at the office of the Corporation or of any
transfer agent for such series of Series A Preferred Stock the certificate or certificates therefor, duly endorsed (or a reasonably acceptable affidavit and indemnity undertaking in the case of a lost, stolen or destroyed certificate), representing
the Series A Preferred Stock to be redeemed. The Corporation shall redeem all of the Series A Preferred Stock within 30 days from the date on which the Redemption Notice is given; provided, however, the Corporation shall not be obligated to pay the
Redemption Price unless the stock certificate or certificates representing the Series A Preferred Stock to be redeemed are delivered to the Corporation or its transfer agent (or a reasonably acceptable affidavit and indemnity undertaking in the case
of a lost, stolen or destroyed certificate). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) <U>Available Funds for Redemption</U>. No Series A Preferred Stock may be
redeemed except with assets legally available for the redemption payment. If at any time the Corporation determines that in accordance with the Florida Business Corporation Act it is unable to redeem all of the shares of Series A Preferred Stock as
elected by the holders of a majority of the Series A Preferred Stock, such redemption obligation shall be suspended as to those shares of Series A Preferred Stock that may not be legally redeemed until such time when additional funds of the
Corporation are legally available for redemption of the shares of Series A Preferred Stock, whereupon such funds immediately will be used to redeem the balance of the shares of Series A Preferred Stock which the Corporation has become obligated to
redeem on the Redemption Date but which it has not redeemed and such funds will not be used for any other purpose. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e)
<U>Dividends after Redemption</U>. No shares of Series A Preferred Stock shall be entitled to any dividends (declared or otherwise) after the Redemption Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(f) <U>Partial Redemption</U>. If fewer than the total number of shares of Series A Preferred Stock represented by any certificate are redeemed as provided in <U>Section&nbsp;3(d)</U>, a new certificate
representing the number of unredeemed shares of Series A Preferred Stock will be issued to the holder thereof without cost to such holder within 15 Business Days after surrender of the certificate representing the redeemed shares or a reasonably
acceptable affidavit and indemnity undertaking in the case of a lost, stolen or destroyed certificate. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">5 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">4. <B><U>Conversion</U>.</B> </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) <U>Right of Holder to Convert</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <U>Optional Conversion</U>. Each holder of Series A Preferred Stock shall have the right to convert, at any time and from time
to time, and without the payment of additional consideration by the holder thereof, any or all of such holder&#146;s shares of Series A Preferred Stock into such number of fully paid and nonassessable shares of Common Stock equal to the product of
(A)&nbsp;the number of shares of Series A Preferred Stock being so converted and (B)&nbsp;the quotient of the Liquidation Preference divided by the Conversion Price (as defined below) in effect at the time of conversion, with such adjustment or cash
payment for fractional shares as set forth pursuant to <U>Section&nbsp;4(g)</U>. The &#147;<B>Conversion Price</B>&#148; shall initially be $5.00, subject to adjustment as provided in <U>Section&nbsp;4(c)</U>. Each share of Series A Preferred Stock
shall thus at the Purchase Date be convertible into one share of Common Stock, subject to adjustment as set forth herein. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <U>Mechanics of Conversion</U>. Before any holder of Series A Preferred Stock shall be entitled to convert the same into shares
of Common Stock, such holder shall surrender the certificate or certificates therefor, duly endorsed (or a reasonably acceptable affidavit and indemnity undertaking in the case of a lost, stolen or destroyed certificate), at the office of the
Corporation or of any transfer agent for such series of Series A Preferred Stock, and shall provide the Corporation the name or names in which the certificate or certificates for shares of Common Stock are to be issued. The date on which a holder
complies with the procedures in this clause (ii)&nbsp;is the &#147;<B>Optional Conversion Date</B>.&#148; The Corporation shall, as soon as practicable thereafter, issue and deliver to such holder of Series A Preferred Stock, or to the nominee or
nominees of such holder, a certificate or certificates for the number of shares of Common Stock to which such holder shall be entitled as aforesaid and a certificate for the remaining number of shares of Series A Preferred Stock if less than all of
the Series A Preferred Stock evidenced by the certificate were surrendered. Such conversion shall be deemed to have been made immediately prior to the close of business on the Optional Conversion Date, and the person or persons entitled to receive
the shares of Common Stock issuable upon the Optional Conversion Date shall be treated for all purposes as the record holder or holders of such shares of Common Stock as of such date. </FONT></P>
<P STYLE="margin-top:18px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Right of Corporation to Convert</U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <U>Mandatory Conversion</U>. The Corporation shall have the right, at its option, to cause the Series A Preferred Stock, in
whole but not in part, to be automatically converted into that number of fully paid and nonassessable shares of Common Stock for each share of Series A Preferred Stock equal to the quotient of (A)&nbsp;the Liquidation Preference divided by
(B)&nbsp;the Conversion Price in effect at the time of conversion, with such adjustment or cash payment for fractional shares as set forth pursuant to <U>Section&nbsp;4(h)</U>. The Corporation may exercise its right to cause a mandatory conversion
pursuant to this <U>Section&nbsp;4(b)(i) </U>only if the Closing Price of the Common Stock has equaled or exceeded 150% of the Conversion Price then in effect for at least 90 consecutive Trading Days, including the last Trading Day of such 90 day
period (the &#147;<B>Mandatory Conversion Notice Date</B>&#148;). </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">6 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)
<U>Notice</U>. To exercise the mandatory conversion right described in <U>Section&nbsp;4(b)(i)</U>, a written notice (the &#147;<B>Mandatory Conversion Notice</B>&#148;) shall be sent by or on behalf of the Corporation, by first class mail, postage
prepaid, to the holders of record of Series A Preferred Stock as they appear on the stock register of the Corporation up to 10 days and no more than 30 days prior to the Mandatory Conversion Notice Date (A)&nbsp;notifying such holders of the
Corporation&#146;s intent to exercise its mandatory conversion right and of the date of the mandatory conversion, which date shall not be less than 5 days nor be more than 30 days after the Mandatory Conversion Notice Date (the &#147;<B>Mandatory
Conversion Date</B>&#148;), and (ii)&nbsp;stating the office of the Corporation or of any transfer agent for such series of Series A Preferred Stock at which the shares of Series A Preferred Stock called for conversion shall, upon presentation and
surrender of the certificate(s) (or a reasonably acceptable affidavit and indemnity undertaking in the case of a lost, stolen or destroyed certificate) evidencing such shares, be converted, and the Conversion Price to be applied thereto. The
Corporation shall also issue a press release containing such information and publish such information on its website; provided that, failure to issue such press release or publish such information on the Corporation&#146;s website shall not act to
prevent or delay conversion pursuant to this <U>Section&nbsp;4(b)</U>. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <U>Mandatory Conversion Mechanics</U>. The
Corporation shall deliver to the transfer agent for such series of Series A Preferred Stock irrevocable written instructions authorizing the transfer agent, on behalf and at the expense of the Corporation, to cause the Mandatory Conversion Notice to
be duly mailed as soon as practicable after receipt of such irrevocable instructions from the Corporation and in accordance with the above provisions. The shares of Common Stock to be issued upon conversion of the Series A Preferred Stock pursuant
to this <U>Section&nbsp;4(b)</U> and cash with respect to any accrued and unpaid dividends as provided in <U>Section&nbsp;4(b)(iv)</U> and cash in an amount sufficient to cover payment for fractional shares as contemplated by
<U>Section&nbsp;4(h)</U> shall be deposited with the transfer agent in trust at least one Business Day prior to the Mandatory Conversion Date, for the pro rata benefit of the holders of record as they appear on the stock register of the Corporation,
so as to be and continue to be available therefor. Neither failure to mail such Mandatory Conversion Notice to one or more such holders nor any defect in such Mandatory Conversion Notice shall affect the sufficiency of the proceedings for conversion
as to other holders. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)
<U>Accumulated Dividends</U>. The Corporation may not authorize the mandatory conversion pursuant to <U>Section&nbsp;4(b) </U>unless, prior to giving the Mandatory Conversion Notice, all accrued and unpaid dividends on the Series A Preferred Stock
for periods ended prior to the date of such Mandatory Conversion Notice shall have been declared and paid. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:4%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c)
<U>Conversion Price Adjustments of Series A Preferred Stock</U>. The Conversion Price shall be subject to adjustment from time to time as follows: </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <U>Adjustment for Stock Splits, Subdivisions, Reclassifications or Combinations</U>. If the Corporation, at any time after the
Purchase Date, (A)&nbsp;pays a dividend or otherwise distributes to holders of its Common Stock, as such, shares of its capital stock (whether Common Stock or capital stock of any other class),
(B)</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">7 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">
subdivides its outstanding shares of Common Stock into a greater number of shares of Common Stock, (C)&nbsp;combines its outstanding shares of Common Stock into a smaller number of shares of
Common Stock, or (D)&nbsp;issues any shares of its capital stock in a reclassification of its outstanding shares of Common Stock (including any such reclassification in connection with a consolidation, merger or other business combination
transaction in which the Corporation is the continuing or surviving corporation), the Conversion Price in effect at the time of the record date for such dividend or distribution or the effective date of such subdivision, combination or
reclassification shall be adjusted to the number obtained by multiplying such Conversion Price by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such action and the denominator of
which shall be the number of shares of Common Stock outstanding immediately following such action. For the purposes of this <U>Section&nbsp;4(c)(i)</U>, the number of shares of Common Stock at any time outstanding shall not include shares held in
the treasury of the Corporation but shall include shares issuable in respect of scrip certificates issued in lieu of fractions of shares of Common Stock. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <U>Adjustment for Issuances Below Conversion Price to Current Holders</U>. If the Corporation should issue or be deemed to have
issued, at any time after the Purchase Date, rights, options or warrants to holders of the outstanding shares of Common Stock, as such, entitling the holders of such rights, options or warrants to subscribe for or purchase shares of Common Stock at
a price per share that is lower on the record date mentioned below than the Conversion Price in effect immediately prior to the issuance, then the Conversion Price in effect immediately prior to such adjustment shall be reduced to the lowest
consideration per share received or receivable by the Corporation for the shares of Common Stock so issued or issuable upon such conversion, exchange or exercise. Such adjustment will be made whenever such rights, options or warrants are issued and,
at such time, will become effective retroactive to the time that is immediately after the record date for the determination of shareholders entitled to receive such rights, options or warrants. In case such purchase, conversion, exchange or
subscription price may be paid in a consideration part or all of which is in a form other than cash, the fair value of such consideration will be as determined by the Board, whose determination will be conclusive if based on the financial advice of
a U.S. national or regional investment banking firm or national accounting firm. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <U>Adjustment for Issuances Below Conversion
Price to New Holders</U>. (A)&nbsp;If the Corporation should issue or be deemed to have issued, at any time after the Purchase Date, shares of Common Stock, securities convertible into or exchangeable for shares of Common Stock or rights, options or
warrants entitling the holders of such rights, options or warrants to subscribe for or purchase shares of Common Stock (excluding shares of Common Stock, convertible or exchangeable securities or rights, options or warrants issued in any of the
transactions described in <U>Section&nbsp;4(c)(i) </U>or <U>(ii)</U>) for a purchase price per share of such Common Stock, for a conversion or exchange price per share of Common Stock initially deliverable upon conversion or exchange of such
securities, or for a subscription or purchase price per share of Common Stock initially deliverable upon exercise of such rights, </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">8 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">
options or warrants, that is less than the Conversion Price in effect on the date the purchase, conversion, exchange or subscription price of such additional shares of Common Stock is first
fixed, then the Conversion Price in effect immediately prior to such adjustment shall be reduced to the lowest consideration per share received or receivable by the Corporation for the shares of Common Stock so issued, issuable or deemed issued upon
such conversion, exchange or exercise. Such adjustment will be made whenever such rights, options or warrants are issued and, at such time, will become effective retroactive to the time that is immediately after the record date for the determination
of shareholders entitled to receive such rights, options or warrants. In case such purchase, conversion, exchange or subscription price may be paid in a consideration part or all of which is in a form other than cash, the fair value of such
consideration will be as determined by the Board, whose determination will be conclusive if based on the financial advice of a U.S. national or regional investment banking firm or national accounting firm. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;(B) Notwithstanding <U>Section&nbsp;4(c)(iii)(A)</U>, if the Corporation should issue or be deemed to have issued, at any time after the Purchase Date, (I)&nbsp;shares of Common Stock, securities convertible into or
exchangeable for shares of Common Stock or rights, options or warrants entitling the holders of such rights, options or warrants to subscribe for or purchase shares of Common Stock for a purchase price per share of Common Stock, for a conversion or
exchange price per share of Common Stock initially deliverable upon conversion or exchange of such securities, or for a subscription or purchase price per Common Stock initially deliverable upon exercise of such rights, options or warrants, that is
(x)&nbsp;less than the Conversion Price in effect on the date the purchase, conversion, exchange or subscription price of such additional shares of Common Stock is first fixed and (y)&nbsp;greater than $4.00, (II) in connection with an acquisition
by the Corporation of the assets or equity of another entity (an &#147;<B>Acquisition</B>&#148;), (III) the number of shares of Common Stock to be issued in connection with the Acquisition, plus the number of shares of Common Stock issuable upon the
conversion, exchange or exercise of all other securities issued in connection with the Acquisition is less than 50,000 shares of Common Stock, (IV) the Corporation has not participated in more than two Acquisitions during the calendar year, and
(V)&nbsp;the number of shares of Common Stock issued in connection with the Acquisition and all prior Acquisitions during the last five years to which this <U>Section&nbsp;4(c)(iii)(B)</U> applied plus the number of shares of Common Stock issuable
upon the conversion, exchange or exercise of all other securities issued in connection with the Acquisition and all prior Acquisitions to which this <U>Section&nbsp;4(c)(iii)(B)</U> applied is less than 500,000 shares, then the Conversion Price in
effect immediately prior to such adjustment shall be reduced by multiplying the Conversion Price in effect immediately prior to such adjustment by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding on such
record date plus the number of shares of Common Stock which the aggregate of the offering price of the total number of shares of Common Stock so issued or issuable upon such conversion, exchange or exercise would purchase at the current Conversion
Price, and the denominator of which shall be the number of shares of Common Stock outstanding on such date plus the number of additional shares of </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">9 </FONT></P>


<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; margin-left:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">
Common Stock offered by such rights, options or warrants for subscription or purchase. Such adjustment will be made whenever such rights, options or warrants are issued and, at such time, will
become effective retroactive to the time that is immediately after the record date for the determination of shareholders entitled to receive such rights, options or warrants. In case such purchase, conversion, exchange or subscription price may be
paid in a consideration part or all of which is in a form other than cash, the fair value of such consideration will be as determined by the Board, whose determination will be conclusive if based on the financial advice of a U.S. national or
regional investment banking firm or national accounting firm. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <U>Adjustment for Consolidation, Merger or
Sale</U>. If at any time or from time to time on or after the Purchase Date, any Liquidation Transaction shall be effected, then, as a condition of such Liquidation Transaction, lawful and adequate provision shall be made whereby each holder of
Series A Preferred Stock shall then have the right to convert the Series A Preferred Stock into the kind and amount of stock and other securities and property receivable upon such Liquidation Transaction by holders of the maximum number of shares of
Common Stock into which such shares of Series A Preferred Stock could have been converted immediately prior to such Liquidation Transaction, all subject to further adjustment as provided herein or with respect to such other securities or property by
the terms thereof. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <U>Exempt
Issuances</U>. Notwithstanding this <U>Section&nbsp;4(c)</U>, the following issuances shall be exempt from adjustment of the Conversion Price pursuant to this <U>Section&nbsp;4(c)</U>: (A)&nbsp;issuances to employees, officers, directors,
consultants and advisors of the Corporation pursuant to any incentive plan, stock purchase plan, agreement or other arrangement duly adopted by the Corporation and approved by the compensation committee of the Board; (B)&nbsp;issuances upon exercise
of the warrants issued to JCH Crenshaw Holdings, LLC pursuant to the Purchase Agreement; and (C)&nbsp;upon issuance or conversion of the Series A Preferred Stock. </FONT></P>
<P STYLE="margin-top:6px;margin-bottom:0px; margin-left:8%; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <U>No Increase in Conversion Price</U>. No
adjustment to the Conversion Price pursuant to this <U>Section&nbsp;4(c)</U> shall have the effect of increasing the Conversion Price above the Conversion Price in effect immediately prior to such adjustment. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) <U>Reversion</U>. Upon the expiration of any rights, options, warrants or conversion or exchange privileges for which an adjustment
has been made, if none thereof were exercised, the Conversion Price will, upon such expiration, be readjusted and will thereafter be such as it would have been had it been originally not been adjusted; provided, however, that no such readjustment
will have the effect of increasing the Conversion Price by an amount in excess of the amount of the adjustment initially made in respect of the issuance, sale, or grant of such rights, options, warrants or conversion or exchange privileges.
</FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">10 </FONT></P>



<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(e) <U>Other Distributions</U>. In the event the Corporation shall declare a distribution
(other than a subdivision, combination or merger or sale of assets transaction provided for elsewhere in this <U>Section&nbsp;4 </U>or in <U>Section&nbsp;2</U>) payable in securities of other persons, evidences of indebtedness issued by the
Corporation or other persons, assets (excluding cash dividends) or options or rights not referred to in <U>Section&nbsp;4(c)(i)</U>, then, in each such case for the purpose of this <U>Section&nbsp;4(e)</U>, the holders of Series A Preferred Stock
shall be entitled to a proportionate share of any such distribution as though they were the holders of the number of shares of Common Stock of the Corporation into which their shares of Series A Preferred Stock are convertible as of the record date
fixed for the determination of the holders of Common Stock of the Corporation entitled to receive such distribution. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(f)
<U>No Impairment</U>. The Corporation will not, through any reorganization, recapitalization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by the Corporation, but will at all times in good faith assist in the carrying out of all the provisions of this <U>Section&nbsp;4 </U>and in the taking of all such action as may
be necessary or appropriate in order to protect the rights of the holders of Series A Preferred Stock set forth in this <U>Section&nbsp;4 </U>against impairment. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(g) <U>Termination of Conversion Rights</U>. In the event of a Notice of Redemption of any shares of Series A Preferred Stock pursuant to <U>Section&nbsp;3</U>, the conversion rights of the shares
designated for redemption shall terminate at the close of business on the last full day preceding the date fixed for redemption, unless the Redemption Price is not paid on such Redemption Date, in which case the conversion rights for such shares
shall continue until such price is paid in full. In the event of a liquidation, dissolution or winding up of the Corporation or a Liquidation Transaction, the conversion rights shall terminate at the close of business on the last full day preceding
the date fixed for the payment of any such amounts distributable on such event to the holders of Series A Preferred Stock. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(h) <U>No Fractional Shares</U>. No fractional shares shall be issued upon the conversion of any share or shares of the Series A
Preferred Stock, and the number of shares of Common Stock to be issued shall be rounded down to the nearest whole share. The number of shares issuable upon such conversion shall be determined on the basis of the total number of shares of Series A
Preferred Stock the holder is at the time converting (or are being automatically converted) into Common Stock and the number of shares of Common Stock issuable upon such aggregate conversion. If the conversion would result in any fractional share,
the Corporation shall, in lieu of issuing any such fractional share, pay the holder thereof an amount in cash equal to the fair market value of such fractional share of Common Stock on the date of conversion. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(i) <U>Certificate as to Adjustments</U>. Upon the occurrence of each adjustment or readjustment of the Conversion Price pursuant to this
<U>Section&nbsp;4</U>, the Corporation, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of such Series A Preferred Stock a certificate setting forth
such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Series A Preferred Stock, furnish or cause to be
furnished to such holder a like certificate setting forth (i)&nbsp;such adjustment and readjustment, (ii)&nbsp;the Conversion Price at the time in effect, and (iii)&nbsp;the number of shares of Common Stock and the amount, if any, of other property
which at the time would be received upon the conversion of a share of Series A Preferred Stock. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">11 </FONT></P>



<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(j) <U>Notices of Record Date</U>. In the event of any taking by the Corporation of a record
of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any right to subscribe for, purchase or otherwise acquire any
shares of stock of any class or any other securities or property, or to receive any other right, the Corporation shall mail to each holder of Series A Preferred Stock, at least 10 days prior to the date specified therein, a notice specifying the
date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(k) <U>Reservation of Stock Issuable Upon Conversion</U>. The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of the shares of Series A Preferred Stock, such number of its shares of Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Series A Preferred Stock; and if at any time
the number of authorized but unissued shares of Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of such series of Series A Preferred Stock, in addition to such other remedies as shall be available to the
holders of such Series A Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be
sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite shareholder approval of any necessary amendment to these Articles of Incorporation. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(l) <U>Issuance Limitation</U>. Notwithstanding anything to the contrary contained herein, until the Company obtains the requisite
shareholder approval (the &#147;<B>Issuance Approval</B>&#148;) under NASDAQ Corporate Governance Rule 5635 (the &#147;<B>Issuance Limitation</B>&#148;), under no circumstances will the number of shares of Common Stock issued upon conversion of the
Series A Preferred Stock, when aggregated with the number of shares of Common Stock, if any, previously issued upon conversion of the Series A Preferred Stock and upon exercise of any warrant issued pursuant to the Purchase Agreement, exceed 19.99%
of the number of shares of Common Stock outstanding immediately prior to the first issuance of shares of Series A Preferred Stock (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction).
Immediately after the Issuance Approval is obtained, the Issuance Limitation under this <U>Section&nbsp;4(l)</U> shall no longer apply. At any time that the Issuance Limitation applies, the number of shares of Common Stock issuable upon conversion
of the Series A Preferred Stock shall be limited to the maximum number of shares of Common Stock that could be issued without the Issuance Approval having been obtained. The Corporation shall use its commercially reasonable efforts to obtain the
Issuance Approval as soon as reasonably practicable after the first issuance of shares of Series A Preferred Stock. </FONT></P> <P STYLE="margin-top:18px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">5.
<U><B>Voting Rights</B></U>. </FONT></P> <P STYLE="margin-top:6px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) <U>General Voting Rights</U>. Except as expressly provided by these Articles of Incorporation
or as provided by law, the holders of Series A Preferred Stock shall have the same </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">12 </FONT></P>



<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
voting rights as the holders of Common Stock and shall be entitled to notice of any shareholders&#146; meeting in accordance with the Bylaws of the Corporation, and the holders of Common Stock
and the Series A Preferred Stock shall vote together as a single class on all matters. Each holder of Common Stock shall be entitled to one vote for each share of Common Stock held, and each holder of Series A Preferred Stock shall be entitled to
the number of votes equal to the number of shares of Common Stock into which such shares of Series A Preferred Stock could be converted. Fractional votes shall not, however, be permitted and any fractional voting rights available on an as-converted
basis (after aggregating all shares into which shares of Series A Preferred Stock held by each holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward). </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) <U>Voting Limitation</U>. (i)&nbsp;Notwithstanding anything to the contrary contained herein, until the Corporation obtains the
requisite shareholder approval (the &#147;<B>Voting Approval</B>&#148;) under NASDAQ Corporate Governance Rule 5635 (the &#147;<B>Voting Limitation</B>&#148;), under no circumstances will the aggregate voting rights of the outstanding Series A
Preferred Stock, Common Stock issued upon conversion of the Series A Preferred Stock and Common Stock issued upon exercise of any warrant issued pursuant to the Purchase Agreement, exceed 19.99% of the total voting power of the Corporation&#146;s
equity securities outstanding immediately prior to the first issuance of shares of Series A Preferred Stock (as adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction). Immediately after the Voting
Approval is obtained, the Voting Limitation under this <U>Section&nbsp;5(b) </U>shall no longer apply. At any time that the Voting Limitation applies, the voting power of the Series A Preferred Stock shall be reduced to the minimum extent necessary
to allow holders of shares of Common Stock issued upon exercise of any warrant issued pursuant to the Purchase Agreement, holders of shares of Common Stock issued upon conversion of the Series A Preferred Stock and holders of the Series A Preferred
Stock to collectively exercise 19.99% of the total voting power of the Corporation&#146;s equity securities outstanding immediately prior to the first issuance of shares of Series A Preferred Stock (as adjusted for any stock dividend, stock split,
stock combination, reclassification or similar transaction). The Corporation shall use its commercially reasonable efforts to obtain the Voting Approval as soon as reasonably practicable. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(ii) Solely with respect to determining the number of votes to which holders of the Series A Preferred Stock are entitled on an as
converted to Common Stock basis as set forth in <U>Section&nbsp;5(a)</U>, any adjustment of the Conversion Price pursuant to <U>Sections 4(c)(ii)-(iv)</U>&nbsp;shall not cause the use of a Conversion Price for such purposes that is less than $4.39,
with such price to be adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction occurring after the Purchase Date. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(c) <U>Board Representation</U>. So long as the shares of Series A Preferred Stock on an as converted to Common Stock basis represent 5% or more of the Corporation&#146;s outstanding Common Stock, holders
of the Series A Preferred Stock, exclusively, shall be entitled to elect one member of the Board (and to fill any vacancy with respect thereto). </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">(d) <U>Other Board Seats</U>. Any other members of the Board of Directors authorized pursuant to the Corporation&#146;s bylaws shall be elected by the holders of the Series A Preferred Stock and Common
Stock, voting as a single class on an as converted to Common Stock basis. Any director who shall have been elected by a specified group or groups of </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">13 </FONT></P>



<p Style='page-break-before:always'>
<HR  SIZE="3" style="COLOR:#999999" WIDTH="100%" ALIGN="CENTER">
 <P STYLE="margin-top:0px;margin-bottom:0px"><FONT STYLE="font-family:Times New Roman" SIZE="2">
shareholders may be removed during the aforesaid term of office, either for or without cause, by and only by, the affirmative vote of the holders of a majority of the shares of such specified
group or groups, given at a special meeting of such shareholders duly called or by an action by written consent for that purpose. </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT
STYLE="font-family:Times New Roman" SIZE="2">6. <B><U>Protective Provisions</U>.</B> So long as the shares of Series A Preferred Stock on an as converted to Common Stock basis represent 5% or more of the Corporation&#146;s outstanding Common Stock,
the Corporation shall not (by amendment, merger, consolidation or otherwise) without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Series A
Preferred Stock: </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(a) amend, alter, waive, repeal or modify (whether by merger, consolidation or otherwise) any provision of
its Articles of Incorporation (including any filing or amending of a certificate of designation for any of its capital stock) or Bylaws of the Corporation so as to adversely affect or otherwise impair any of the rights, preferences, privileges,
qualifications, limitations or restrictions of, or applicable to, the Series A Preferred Stock; </FONT></P> <P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(b) authorize or issue, or
obligate itself to issue, any other equity security, including any security convertible into or exercisable for any equity security, having rights, preferences or privileges senior to or on a parity with the Series A Preferred Stock; </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(c) alter or change any rights, preferences or privileges of the Series A Preferred Stock; or </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:8%"><FONT STYLE="font-family:Times New Roman" SIZE="2">(d) increase or decrease (other than by conversion) the total number of authorized shares of Series A Preferred Stock. </FONT></P>
<P STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%"><FONT STYLE="font-family:Times New Roman" SIZE="2">7. <B><U>Status of Reacquired Shares of Series A Preferred Stock</U>.</B> Shares of outstanding Series A Preferred Stock reacquired by
the Corporation (including shares of Series A Preferred Stock that shall have been redeemed pursuant to the provisions hereof) or cancelled upon conversion into Common Stock shall have the status of authorized and unissued shares of Preferred Stock,
undesignated as to series, and subject to later designation and issuance by the Corporation in accordance with its Articles of Incorporation. </FONT></P>
 <p STYLE="margin-top:0px;margin-bottom:0px"><FONT SIZE="1">&nbsp;</FONT></P> <P STYLE="margin-top:0px;margin-bottom:0px" ALIGN="center"><FONT STYLE="font-family:Times New Roman" SIZE="2">14 </FONT></P>


</BODY></HTML>
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
