Exhibit 10.6

[AETI Letterhead]

March 22, 2017

JCH Crenshaw Holdings, LLC

PO Box 704

Beaumont, Texas 77704

Attn: Casey Crenshaw

Re: Series A Preferred Stock Side Letter Agreement

Gentlemen:

This Letter Agreement (“Agreement”) is made by and between JCH Crenshaw
Holdings, LLC, a Texas limited liability company (“Investor”), and American
Electric Technologies, Inc., a Florida corporation (the “Company”). As used
herein the term “Party” shall refer to a party to this Agreement individually
and the “Parties” shall refer to all parties to this Agreement collectively.

Reference is made to that certain Note Purchase Agreement by and among the
Company, M&I Electric Industries, Inc., a Texas corporation, South Coast
Electric Systems, LLC, a Delaware limited liability company, and HD
Special-Situations III, LP, a Delaware limited partnership (the “NPA”), dated
March 22, 2017. Reference is also made to the Articles of Amendment of Articles
of Restatement of Articles of Incorporation of the Company (the “Articles”).
Capitalized terms used in this Agreement but not defined herein shall have the
meanings assigned to such terms in the NPA.

Pursuant to the NPA, the Company has agreed to certain restrictions on its
ability to (i) declare, authorize, or pay dividends or distributions on any of
its equity interests, (ii) purchase, redeem or otherwise aquire any of its
equity interests, (iii) return capital to its shareholders, or (iv) make
distributions of its assets to its shareholders.

The Investor is the sole holder of the Company’s Series A Convertible Preferred
Stock (the “Preferred Stock”). Pursuant to the Articles, the Investor holds
certain rights with respect to dividends, redemption and conversion of the
Preferred Stock. This Agreement will serve to confirm and evidence the agreement
that has been reached between the Company and the Investor concerning certain
matters set forth herein.

Section 1. Dividends. Section 1(a) of the Articles entitles the Investor to
receive, when, as and if declared, by the Board of Directors of the Company,
preferential cumulative cash dividends, payable in cash or shares of the
Company’s common stock. The parties hereby agree that until the earlier of
(i) the one year anniversary of the date hereof, or (ii) the Obligations under
the NPA have been paid in full (the “Standstill Period”), the Company, without
the prior written consent of the Lender, shall not declare, authorize or pay any
dividends in cash to the Investor with respect to the Preferred Stock. Following
the expiration of the Standstill Period, for so long as the Obligations under
the NPA remain outstanding, the Company may, at its sole discretion, declare,
authorize or pay dividends in cash to the Investor so long as no Event of
Default exists under the Note or would result therefrom. For avoidance of doubt,
it is agreed and understood that the Company may declare, authorize or pay
dividends to the Investor in shares of the Company’s common stock and that any
such dividends shall not be subject to the restrictions set forth in this
Section 1.

Section 2. Redemption Right. Pursuant to Section 3(a) of the Articles, at any
time following the earlier to occur of (i) April 30, 2017 and (ii) a material
default by the Company of any of the

 

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representations, warranties or covenants of the Company contained in the
Purchase Agreement (as defined in Section 3(a) of the Articles) by and between
the Company and the Investor, the Investor may compel the Company to redeem the
Preferred Stock upon notice to the Company. The Investor hereby agrees that it
shall not exercise its rights under Section 3(a) of the Articles during the
Standstill Period. Following the expiration of the Standstill Period, so long as
the Obligations under the NPA remain outstanding, the Investor may compel the
Company to redeem its Preferred Stock pursuant to the Articles, provided no
Event of Default exists under the Note or would result therefrom.

Section 3. General. During the Standstill Period, the Investor agrees not to
seek enforcement of any other provision not specifically described herein but
contained in the Articles that is inconsistent with the Company’s obligations
under Section 4(k) of the NPA. Following the Standstill Period, for so long as
the Obligations under the NPA remain outstanding, the Investor may seek to
enforce any such provisions so long as no Event of Default exists under the Note
or would result therefrom.

Section 4. Governing Law; Forum Selection; Consent to Jurisdiction. This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of Texas, without giving effect to the conflict of laws principles
thereof. Each Party hereto hereby irrevocably and unconditionally agrees that
any action, suit or proceeding, at law or equity, arising out of or relating to
this Agreement or any transactions contemplated hereby shall only be brought in
any federal court of the Southern District of Texas or any state court located
in Harris County, Texas, and hereby irrevocably and unconditionally expressly
submits to the personal jurisdiction and venue of such courts for the purposes
thereof, and hereby irrevocably and unconditionally waives (by way of motion,
defense, or otherwise) any and all jurisdictional, venue and convenience
objections or defenses that such Party may have in such action, suit or
proceeding, and to any trial by jury to the extent permitted by applicable law.

Section 5. Counterparts. This Agreement may be executed in one or more
counterparts (including by e-mail of portable document format or scanned
versions or by facsimile), each of which shall constitute an original and all of
which, when taken together, shall constitute one and the same agreement.

[Signature pages follow.]

 

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Please confirm that the foregoing correctly sets forth our agreement by signing
and returning this Agreement.

 

Sincerely, AMERICAN ELECTRIC TECHNOLOGIES, INC. By:  

/s/ Charles Dauber

Name:

  Charles Dauber

Title:

  President

 

SIGNATURE PAGE

TO

LETTER AGREEMENT

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Accepted and agreed as of the date first above written:

 

JCH CRENSHAW HOLDINGS, LLC By:  

/s/ Casey Crenshaw

  Casey Crenshaw, President

 

SIGNATURE PAGE

TO

LETTER AGREEMENT