Exhibit        3.8

 

 

**Certificate of Designation**

**of**

**Series        “A” Preferred Stock**

**of**

**SPAR        Group, Inc.**

**As of        March 28, 2008**

The undersigned, duly authorized officer of**SPAR        Group, Inc.**, a corporation organized and existing under the laws        of the State of Delaware (the        “Corporation”), in        accordance with the provisions of Section 103 General Corporation Law, and pursuant to        Section 151 thereof, DOES HEREBY CERTIFY:

1.         The Certificate of        Incorporation of the Corporation, as amended, (a) authorizes the Corporation to issue a        maximum of 3,000,000 shares of Preferred Stock of a par value of one cent ($.01) each, and        (b) expressly vests in the Board of Directors of the Corporation the authority, by        resolution or resolutions, (i) to approve the issuance of any or all of said shares in one        or more series and (ii) to fix the voting powers (full, limited or none), designations,        preferences and relative, participating, optional or other special rights and        qualifications, limitations or restrictions of each such series of preferred stock to be        issued.

2.         The Board of        Directors of the Corporation, pursuant to such express authority, on March 27, 2008, duly        adopted the resolutions attached hereto as Exhibit A creating a series of 3,000,000 shares        of Preferred Stock designated as “Series A Preferred Stock”.

         

|  | Signed on March 28, 2008.                                                                                                                                                                                                                                                                                                                                                                                                         |
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|  |                                                                                                                                                                                                                                                                                                                                                                                                          |
|  | **SPAR Group, Inc.**                                                                                                                                                                                                                                                                                                                                                                                                              |
|  |                                                                                                                                                                                                                                                                                                                                                                                                |
|  | By:  /s/ James R.                Segreto                                                               |
|  |         James R. Segreto,                Chief Financial Officer and Secretary                                                                                                                                                                                                                                                                                                            |

         

         

         

         

         

         

         

         

 

|   | -1- | **Series A Preferred Designation** |
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**Exhibit A**

**SPAR        Group, Inc.**

**Resolutions of its Board of Directors**

**Adopted March 27, 2008**

         

**Series A Preferred Stock Designation**

         

WHEREAS, the Certificate of Incorporation of**SPAR        Group, Inc.**(the        “Corporation”), as amended,        (a) authorizes the Corporation to issue a maximum of 3,000,000 shares of Preferred Stock of        a par value of one cent ($.01) each, and (b) expressly vests in the Board of Directors of        the Corporation the authority, by resolution or resolutions, (i) to approve the issuance of        any or all of said shares in one or more series and (ii) to fix the voting powers (full,        limited or none), designations, preferences and relative, participating, optional or other        special rights and qualifications, limitations or restrictions of each such series of        preferred stock to be issued; and

WHEREAS, the Board of Directors of the Corporation (the        “Board”) has determined that        it is desirable for the Corporation to raise additional capital through the issuance of        shares of preferred stock as hereinafter provided; and now, therefore, it is

RESOLVED, that pursuant to the authority vested in the Board in accordance        with the provisions of its Certificate of Incorporation, a series of the Preferred Stock of        the Corporation shall be, and it hereby is, created, and that the voting powers (full,        limited or none), designations, preferences and relative, participating, optional or other        special rights and qualifications, limitations or restrictions thereof shall be and hereby        fixed are as follows (all of which may be referred to as this        “Designation”):

| (a) | **Designation and Amount of the Series A Preferred                        Stock****.** |
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| (i) | The shares of such series shall be and hereby is designated                        as “Series A Preferred Stock” and the maximum number of shares                        constituting such series shall be 3,000,000 (as reduced from time to time                        as hereinafter provided, the “Maximum Share                        Number”). |
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| (ii) | The Maximum Share Number may be decreased, at any time and                        from time to time, by resolution of the Board; provided,                        however, that no decrease shall reduce the Maximum Share Number to a                        number less than the full number of the shares of Series A Preferred Stock                        then outstanding. |
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| (iii) | The Maximum Share Number shall be reduced automatically from                        time to time by the number of shares of Series A Preferred Stock converted                        into shares of the Corporation’s common stock, $.01 par value (the                        “Common Stock”), pursuant to this Designation. However,                        the Maximum Share Number shall not be reduced by the number of shares of                        Series A Preferred Stock redeemed at the option of the                        Corporation. |
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| (b) | **Potential Dividend Accruals and Dividend                        Declarations****.** |
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| (i) | Holders of shares of Series A Preferred Stock shall be                        entitled to receive, as hereinafter provided, cumulative dividends on each                        share of Series A Preferred Stock at a rate of 2.5% per calendar quarter                        (the “Quarterly Rate”) (i.e., 10% per annum) of the                        purchase price paid for such share (the “Purchase                        Price”). |
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| (ii) | Potential dividends on each share of Series A Preferred                        Stock (each a “Quarterly Accrual” and collectively the                        “Cumulative Accruals”) (A) shall automatically accrue as                        of the last day of each March, June, September and December in each year                        (each a “Accrual Date”) for the three month calendar                        quarter then ending or such shorter period as such share may have been                        issued and outstanding (each a “Accrual Period”), (B)                        shall for the applicable Accrual Period be equal to the product of (x) the                        Quarterly Rate, times (y) the applicable Purchase Price for such                        share, times (z) the Accrual Period Fraction (as hereinafter                        defined), and (C) shall be added to and be cumulative with all prior                        Cumulative Accruals. However, the Cumulative Accruals shall be reduced from                        time to time (without duplication) upon declaration by the amount of each                        Dividend (as hereinafter defined) declared or deemed declared therefrom and                        upon payment by the amount of the Cumulative Accruals or portion thereof                        paid in liquidation or redemption as hereinafter provided.                        “Accrual Period Fraction” shall mean either (x) 1.0000                        for each Accrual Period that is a full calendar quarter, or (y) shall be                        equal to the quotient (expressed as a decimal carried to four places) of                        the actual number of days such share was issued and outstanding during any                        shorter Accrual Period (counting any day part as a whole day) divided by                        the full number of calendar days in the applicable calendar                        quarter. |
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|   | -2- | **Series A Preferred Designation** |
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| (iii) | At the discretion of the Board, outstanding Cumulative                        Accruals (as hereinafter defined) respecting the Series A Preferred Stock                        may be declared in whole or in part to be payable as a dividend, when, if                        and as declared by the Board and made out of any amounts legally available                        therefor, through either (A) the payment of cash as hereinafter provided (a                        “Cash Dividend”), or (B) the issuance of shares of                        Common Stock as hereinafter provided (a “Stock                        Dividend”). In the case of a Stock Dividend, the Cumulative                        Accruals shall be deemed paid in an amount equal to the number of shares                        issued times the Per Share Market Value (as hereinafter defined) of a share                        of Common Stock at the record date for such dividend. Cash Dividends and                        Stock Dividends may be referred to individually as a                        “Dividend” and collectively as                        “Dividends”. |
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| (iv) | “Per Share Market Value” means on any                        particular date (A) the closing bid price per share, or the last sale price                        per share, as applicable, of the Common Stock on such date on the Nasdaq or                        another registered national stock exchange on which the Common Stock is                        then listed, or if there is no such price on such date, then the closing                        bid price on such exchange or quotation system on the date nearest                        preceding such date, or (B) if the Common Stock is not listed then on the                        Nasdaq or any other registered national stock exchange, the closing bid                        price for a share of Common Stock in the over-the-counter market, as                        reported by the OTC Bulletin Board or in the National Quotation Bureau                        Incorporated or similar organization or agency succeeding to its functions                        of reporting prices) at the close of business on such date, or (C) if the                        Common Stock is not then reported by the OTC Bulletin Board or the National                        Quotation Bureau Incorporated (or similar organization or agency succeeding                        to its functions of reporting prices), then the average of the “Pink                        Sheet” quotes for the relevant conversion date, as determined in good                        faith by the Corporation’s Board, or (D) if the Common Stock is not                        then publicly traded the fair market value of a share of Common Stock as                        determined by an independent appraiser selected in good faith by the                        Corporation’s Board; provided,however, that all                        determinations of the Per Share Market Value shall be appropriately                        adjusted for any stock dividends, stock splits or other similar                        transactions during such period. The determination of fair market value by                        an independent appraiser shall be based upon the fair market value of the                        Corporation determined on a going concern basis as between a willing buyer                        and a willing seller and taking into account all relevant factors                        determinative of value, and shall be final and binding on all parties. In                        determining the fair market value of any shares of Common Stock, no                        consideration shall be given to any restrictions on transfer of the Common                        Stock imposed by agreement or by federal or state securities laws, or to                        the existence or absence of, or any limitations on, voting                        rights. |
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| (v) | The Corporation shall pay or distribute the applicable                        Dividend so declared by the Board on each share of Series A Preferred                        Stock, on such payment or distribution date as shall have been fixed by the                        Board at the time of the declaration of such Dividend, to the holder of                        record of such share at the close of business on such record date as shall                        have been fixed by the Board at the time of the declaration of such                        Dividend, and each such holder shall be entitled to receive such Dividend                        applicable to his or her shares so declared. |
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| (vi) | So long as any declared Dividends remain unpaid or any                        Cumulative Accruals remain outstanding, without the prior consent of the                        holders of a majority (or such greater number of shares of Series A                        Preferred Stock as shall then be required by applicable law) of the shares                        of Series A Preferred Stock at the time outstanding (voting together as a                        separate class), given by written consent in a manner as may then be                        permitted by law or given in person or by proxy by a vote at a meeting                        called for such purpose, the Corporation shall not pay, fund or set aside                        for payment any dividends in cash or property in respect of any of the                        Common Stock, or in respect of any other series of preferred stock issued                        by the Corporation, in each case other than dividends consisting of its                        Common Stock. |
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| (vii) | No holder of any Series A Preferred Stock shall be deemed on                        account of any Cumulative Accruals to be a creditor of the Corporation or                        be entitled to receive payment or distribution of any dividend unless,                        until and only to the extent the Board has declared a Cash Dividend or                        Stock Dividend or the Corporation is deemed to have declared a Stock                        Dividend with respect thereto. |
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|   | -3- | **Series A Preferred Designation** |
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| (viii) | No holder of any Series A Preferred Stock shall be entitled                        on account of any such share to any dividends, whether payable in cash,                        property or stock, in excess of the Quarterly Accruals and resulting                        Cumulative Accruals as provided in this Designation. |
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| (c) | **Liquidation****.** |
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| (i) | Upon the dissolution, liquidation or winding up of the                        Corporation, whether voluntary or involuntary, before any dividend of cash                        or property or payment or distribution of the assets of the Corporation                        shall be made or set apart for any Common Stock or any other class or                        series of stock, eachholder of Series A Preferred Stock then outstanding                        shall be entitled to receive an amount on account of each those shares                        equal to the applicable Liquidation Amount (as hereinafter defined),                        whether or not funds are then legally available for the payment of                        dividends (to the greatest extent permitted by applicable law) and whether                        or not earned or declared. “Liquidation Amount” shall                        mean for each share of Series A Preferred Stock the sum of (A) the Purchase                        Price therefor, (B) the amount of all declared and unpaid Cash Dividends                        thereon, (C) the value of all declared and unpaid Stock Dividends thereon                        (computed at the Per Share Market Value on the first business day preceding                        the date of payment), and (D) the then outstanding balance of the                        Cumulative Accruals thereon. |
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| (ii) | In the event the assets of the Corporation available for                        distribution to holders of shares of Series A Preferred Stock upon                        dissolution, liquidation or winding up of the Corporation, whether                        voluntary or involuntary, shall be insufficient to pay in full all amounts                        to which holders of shares of Series A Preferred Stock are entitled, no                        such distribution shall be made on account of any shares of any other class                        or series of stock unless and until the Series A Preferred Stock holders                        shall have received the full amount of their respective Liquidation                        Preferences. |
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| (iii) | After payment in cash to the holders of shares of Series A                        Preferred Stock of their full Liquidation Peferences upon’                        dissolution, liquidation or winding up of the Corporation, whether                        voluntary or involuntary, the holders of shares of Series A Preferred Stock                        as such shall have no right or claim to any of the remaining assets of the                        Corporation. |
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| (iv) | Neither the merger or consolidation of the Corporation into                        or with any other corporation (provided the Corporation is the continuing                        corporation) nor the merger or consolidation of any other corporation into                        or with the Corporation nor the sale, lease, exchange or other disposition                        (for cash, shares of stock, securities or other consideration) of all or                        substantially all the assets of the Corporation shall be deemed to be a                        dissolution, liquidation or winding up, voluntary or involuntary, of the                        Corporation. |
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| (d) | **Redemption at the Option of the                        Corporation****.** |
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| (i) | The Corporation at its option may, if, as and when                        authorized by the Board in its discretion and made out of any amounts                        legally available therefor, at any time and from time to time redeem all or                        part of the shares of Series A Preferred Stock (an “Optional                        Redemption”) on date determined by the Board (an                        “Optional Redemption Date”) at a redemption price for                        each holder thereof for each redeemed share equal to the applicable                        Liquidation Amount (the “Optional Redemption Price”). A                        partial redemption shall be made from the holders of the Series A Preferred                        Stock in proportion to the shares held by them. |
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| (ii) | Notice of each redemption of shares of Series A Preferred                        Stock shall be mailed to each holder of the shares to be redeemed, at the                        holder’s address of record, not more than 60 nor less than 20 days                        prior to the Optional Redemption Date, specifying: |
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|   | (A) | the Optional Redemption Date; |
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|   | (B) | the place of redemption, which shall be at the principal                        office of the Corporation or a bank or trust company appointed by the                        Corporation in accordance with subdivision (v) below; |
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|   | -4- | **Series A Preferred Designation** |
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|   | (C) | the aggregate number of Series A Preferred Stock shares                        outstanding and held by all holders and the aggregate number of Series A                        Preferred Stock shares to be redeemed from all holders; |
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|   | (D) | the number of shares of such holder to be redeemed and the                        number(s) of the certificate(s).representing such shares if less than all                        shares of such holder are to be redeemed; |
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|   | (E) | the Optional Redemption Price for the shares of such holder                        to be redeemed, including the amount of accrued and unpaid dividends that                        will be part of such Optional Redemption Price; and |
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|   | (F) | the record date, if any, of the closing of the transfer                        books of the Corporation in connection with such redemption pursuant to                        subdivision (iv) below. |
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| (iii) | On or prior to the Optional Redemption Date, as the case may                        be, the holder shall surrender to the Corporation certificates representing                        the shares of Series A Preferred Stock to be redeemed, duly endorsed or                        accompanied by a duly executed stock power, and on the Optional Redemption                        Date, the Corporation shall pay the consideration therefor (i.e., the                        Optional Redemption Price) by check subject to collection unless it shall                        not have received such certificates, in which case it shall make provision                        for payment therefor on its books and records, whereupon (a) Dividends on                        the shares of Series A Preferred Stock scheduled for redemption shall cease                        to accrue on the Optional Redemption Date, and (b) all rights of the                        holders of such shares as stockholders of the Corporation by reason of the                        ownership of such shares shall cease an such date, except the right to                        receive the Optional Redemption Price payable upon redemption of such                        shares, without interest, on presentation and surrender of the respective                        certificates representing such shares. In case less than all the shares                        represented by any certificate are redeemed, a new certificate shall be                        issued representing the unredeemed shares without cost to the holder                        thereof. |
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| (iv) | In order to facilitate the redemption of any shares of                        Series A Preferred Stock, the Corporation’s Board is authorized to                        cause the transfer books of the Corporation related to shares of Series A                        Preferred Stock to be closed as to such shares no later than seven days                        prior to such redemption. |
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| (e) | **Conversion to Common Stock at Holder’s                        Option****.** |
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| (i) | The holder of any shares of Series A Preferred Stock shall                        have the right, at his or her option, at any time and from time to time, by                        written notice to the Corporation (a “Conversion                        Notice”), to convert all or any portion (but not less than 100                        shares unless such shares constitute all) of the holder’s shares of                        Series A Preferred Stock into the equivalent number of fully paid and                        nonassessable shares of Common Stock of the Corporation. The Conversion                        Ratio is 1:1, subject to adjustment as provided below. Notwithstanding the                        foregoing, the conversion right provided herein shall terminate at the                        close of business on the business day immediately preceding the Optional                        Redemption Date for any share of Series A Preferred Stock called for                        Optional Redemption unless, in any case, (a) the Corporation shall extend                        such date, (b) the Corporation shall have received the Conversion Notice                        prior to the Optional Redemption Date, or (c) a default by the Corporation                        in payment or providing for payment of the redemption price shall have                        occurred and be continuing. |
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| (ii) | Conversion shall be effected by surrender to the Corporation                        of the certificates representing the shares of Series A Preferred Stock to                        be converted, duly endorsed or accompanied by a duly executed stock power,                        together with written notice to the Corporation that such holder elects to                        convert a specified number of shares of Series A Preferred Stock                        surrendered. Shares of Series A Preferred Stock shall be deemed to have                        been converted as of the date of the surrender of such shares for                        conversion, and the person or persons entitled to receive the shares of                        Common Stock issuable upon such conversion shall be treated for all                        purposes as the record holder or holders of such shares of Common Stock on                        such date; provided, however, that no such surrender on any day when the                        stock transfer books for the Corporation’s Common Stock shall be                        closed shall be effective to constitute the person or persons entitled to                        receive the shares of Common Stock upon such conversion as the record                        holder or holders of such shares of Common Stock on such date, but such                        surrender shall be effective to constitute the person or persons entitled                        to receive such shares of Common Stock as the record holder or holders                        thereof for all purposes at the close of business on the next succeeding                        day on which such stock transfer books are open. |
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|   | -5- | **Series A Preferred Designation** |
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| (iii) | Upon any conversion of a share of Series A Preferred Stock:                        (A) the Corporation shall simultaneously pay in full the amount of all                        declared and unpaid Cash Dividends thereon and deliver in full the shares                        of all declared and unpaid Stock Dividends thereon, in each case                        irrespective of whether a later payment or record date may have been                        specified in the declaration thereof; (B) the Corporation (without further                        action of the Board) shall be deemed to have declared (to the greatest                        extent permitted by applicable law) a Stock Dividend with respect to then                        outstanding balance of the Cumulative Accruals thereon, providedthat the Corporation shall give the holder(s) notice if it cannot                        declare and pay such a Stock Dividend in the full amount of all outstanding                        Cumulative Accruals, and such holder(s) shall have a reasonable period of                        time to withdraw their Conversion Notices as a result thereof; and (C)                        except for those payments and deliveries and that deemed Stock Dividend                        declaration, (x) no payment of or adjustment of the Conversion Price with                        respect to any potential dividends on the Series A Preferred Stock so                        converted will be made, and (y) all rights to future Quarterly Accruals and                        the resulting future Cumulative Accruals with respect to any shares of                        Series A Preferred Stock so converted shall cease and be deemed                        satisfied. |
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| (iv) | In the event of any change in the outstanding Common Stock                        into a smaller or larger number of shares by reason of a stock dividend,                        stock subdivision or stock combination or the issue of any shares of                        capital stock by recapitalization (other than a change in par value or any                        Stock Dividend or conversion under this Designation), the Conversion Ratio                        shall be proportionately adjusted so that the holder of any shares of                        Series A Preferred Stock thereafter surrendered for conversion shall be                        entitled to receive the number and kind of shares of capital stock of the                        Corporation that he or she would have owned or been entitled to receive                        immediately following the event described above had such shares of Series A                        Preferred Stock been converted immediately prior thereto. An adjustment                        made pursuant to this subdivision shall become effective immediately after                        the record date in the case of a stock dividend and shall become effective                        immediately after the effective date in the case of a subdivision,                        combination or reclassification. |
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| (v) | In case of any consolidation or merger of the Corporation                        with or into any other person (other than a consolidation or merger in                        which the Corporation is the continuing person), or any conveyance or                        transfer of all or substantially all of the property and assets of the                        Corporation, (A) the prior consent of the holders of a majority (or such                        greater number of shares of Series A Preferred Stock as shall then be                        required by applicable law) of the shares of Series A Preferred Stock at                        the time outstanding (voting together as a separate class), given by                        written consent in a manner as may then be permitted by law or given in                        person or by proxy by a vote at a meeting called for such purpose, shall be                        required therefore, and (B) the holder of shares of Series A Preferred                        Stock thereafter surrendered for conversion shall be entitled to receive                        (x) payment in full the amount of all declared and unpaid Cash Dividends                        thereon, irrespective of whether a later payment or record date may have                        been specified in the declaration thereof, and (y) the kind and amount of                        shares of stock and other securities and property to be received upon such                        consolidation, merger, conveyance or transfer by a holder of the number                        shares of Common Stock equal to the sum of (1) the number of shares of                        Common Stock into which such Series A Preferred Stock might have been                        converted immediately prior to such consolidation, merger, conveyance or                        transfer, (2) the number of shares of Common Stock under all declared and                        unpaid Stock Dividends thereon, irrespective of whether a later payment or                        record date may have been specified in the declaration thereof, and (3) the                        number of shares of Common Stock that would have been issuable in a duly                        declared Stock Dividend with respect to then outstanding balance of the                        Cumulative Accruals thereon. The above provisions of this clause shall                        similarly apply to successive reclassifications, consolidations, mergers,                        conveyances or transfers. |
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| (vi) | During any period during which the Corporation has not, for                        any reason, redeemed following the Optional Redemption Date any shares of                        Series A Preferred Stock that it was otherwise obligated to redeem or paid                        when stipulated in the applicable declaration any Cash Dividend or Stock                        Dividend that it has lawfully declared (a “Default”),                        then if a Conversion Notice is delivered and for so long as any such                        Default is continuing, the Conversion Ratio in effect with respect to such                        shares shall be adjusted so that the holder will receive twice as many                        shares of Common Stock as would have been the case absent such                        Default. |
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|   | -6- | **Series A Preferred Designation** |
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| (f) | **Priority****.** |
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| (i) | Any stock of any series or class of the Corporation shall be                        deemed to rank: |
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|   | (A) | prior to the shares of Series A Preferred Stock, either as                        to dividends or upon liquidation, if the holders of shares of such series                        or class shall be entitled to the receipt of dividends or of amounts                        distributable upon dissolution, liquidation or winding up of the                        Corporation, as the case may be, in preference or priority to the holders                        of shares of Series A Preferred Stock, but only to the extent approved by                        them as hereinafter provided; |
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|   | (B) | on a parity with shares of Series A Preferred Stock (other                        than other shares of Series A Preferred Stock), whether or not such shares                        contain dividend rates or payment dates or redemption or liquidation prices                        per share or sinking fund provisions, if any, different from those of                        shares of Series A Preferred Stock, if the holders of such series or class                        shall be entitled to the receipt of dividends in proportion to their                        respective accrued dividends per share and to the receipt of amounts                        distributable upon dissolution, liquidation or winding up of the                        Corporation in proportion to their respective full per share distributive                        amounts, as the case may be, without preference or priority, one over the                        other, as between the holders of shares of such series or class of stock                        and the holders of shares of Series A Preferred Stock, but only to the                        extent approved by them as hereinafter provided; and |
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|   | (C) | junior to shares of Series A Preferred Stock, either as to                        dividends or upon liquidation, if such class shall be Common Stock or if                        the holders of shares of Series A Preferred Stock shall be entitled to the                        receipt of dividends and of amounts distributable upon dissolution,                        liquidation or winding up of the Corporation, as the case may be, in                        preference or priority to the holders of shares of such series or                        class. |
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| (ii) | The consent of the holders of all of the shares of Series A                        Preferred Stock at the time outstanding (voting together as a separate                        class), given by written consent in a manner as may then be permitted by                        law or given in person or by proxy by a vote at a meeting called for such                        purpose, shall be necessary for authorizing, approving, effecting or                        validating the creation, authorization or issue of any shares of any class                        or series of stock of the Corporation ranking prior or equal to to shares                        of Series A Preferred Stock as to dividends or upon liquidation, or the                        reclassification of any authorized stock of the Corporation into any such                        prior shares, or the creation, authorization or issue of any obligation or                        security convertible into or evidencing the right to purchase any such                        prior shares, unless such shares, obligation or security are to be issued                        in connection or contemporaneously with the retirement of all outstanding                        shares of Series A Preferred Stock which did not vote in favor of such                        creation, authorization or issuance. However, such approval shall not be                        required with respect to the additional shares of Series A Preferred Stock                        permitted under this Designation if less than the permitted maximum Share                        Number are then outstanding. |
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| (g) | **Amendments and Voting, Rights as Stockholders                        Generally**. |
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| (i) | No amendment to or other change in this Designation may be                        made by the Corporation without the consent of the holders of all of the                        shares of Series A Preferred Stock at the time outstanding (voting together                        as a separate class), given by written consent in a manner as may then be                        permitted by law or given in person or by proxy by a vote at a meeting                        called for such purpose. |
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| (ii) | Except as otherwise provided in this Designation or required                        by applicable law, each share of Series A Preferred Stock shall entitle the                        holder thereof to one vote, to participate in any meeting of shareholders,                        to have notice of any meeting of shareholders, to receive any other notice                        or report and to have any other right or benefit, in each case as if such                        share of Series A Preferred Stock were a share of Common Stock. |
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| (iii) | On any matters on which the holders of Series A Preferred                        Stock are entitled to vote, each holder shall be entitled to one vote for                        each share held (whether as part of a class or as if a Common Stock                        holder). |
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|   | -7- | **Series A Preferred Designation** |
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| (h) | **Reservation of Shares; No Fractional Shares; Maximum                        Shares Without Stockholder                        Vote****.** |
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| (i) | 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 and potential Stock Dividends, 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                        payment of Stock Dividends in respect of all accrued and undeclared                        Dividends; and if at any time the number of authorized but unissued shares                        of Common Stock shall be insufficient to effect the conversion of all then                        outstanding shares of Series A Preferred Stock, the Corporation will use                        its best efforts to take such action as may be necessary to increase its                        authorized but unissued shares of Common Stock to such number of shares as                        shall be sufficient for such purposes. |
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| (ii) | No fractional shares or scrip representing fractional shares                        of Common Stock shall be issued upon the conversion of any Series A                        Preferred Stock or making of any Stock Dividend. If the conversion of                        shares of Series A Preferred Stock or any Stock Dividend would otherwise                        require the issuance of a fraction of a share, an amount in cash shall be                        paid to the holder thereof equal to such fraction multiplied by the                        Conversion Ratio or Per Share Market Value then in effect, as                        applicable. |
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| (iii) | Notwithstanding anything in this Designation to the                        contrary, the Corporation shall not issue or commit to issue more than                        3,600,000 shares of its Common Stock pursuant hereto without the prior                        approval of a majority of its stockholders. |
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| (i) | **Miscellaneous****.** |
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| (i) | Shares of Series A Preferred Stock issued and reacquired by                        the Corporation (including, without limitation, shares which have been                        redeemed, but exluding shares that have been converted into shares of                        Common Stock) shall have the status of authorized and unissued shares of                        Preferred Stock, undesignated as to series, subject to later                        issuance. |
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| (ii) | The stockholders (and to the extent authorized by                        stockholders, the Board) of the Corporation shall have authority at any                        time and from time to time to provide in the Corporation’s                        Certificate of Incorporation for the issuance of additional series of                        Preferred Stock. However, the issuance of any shares prior or equal to the                        Series A Preferred Stock shall nevertheless require the consent of the                        holders of the Series A Preferred Stock as provided in this                        Designation. |
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| (iii) | No holder of Series A Preferred Stock of the Corporation                        shall, because of his ownership of such Series A Preferred Stock, have a                        pre-emptive right to purchase, subscribe for or take any part of any shares                        or securities, options or warrants convertible into any shares of the                        Corporation which may be issued, optioned for sale or sold at any time by                        the Corporation. |
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and it is further

**RESOLVED**, that the proper officers of the        Corporation be, and each of them hereby is, authorized, empowered and directed, with each        such officer having the full authority to act without the participation or consent of any        other officer, (A) to file with the Secretary of State of Delaware a Certificate of        Designation providing for the issuance of the series of stock designated in the foregoing        resolution, (B) to execute and deliver any and all further agreements, instruments,        certificates, waivers and other documents or communications, (C) to do and perform any and        all such other acts and things, and (D) to take or omit to take any and all such further        action,ineachcasein the name and on behalf of the        Corporation as such officer(s) may, in his or her discretion, deem necessary or appropriate        in order to perform or otherwise satisfy (in whole or in part) such Resolutions or their        purposes or intents, under its corporate seal or otherwise.

         

         

 

|   | -8- | **Series A Preferred Designation** |
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