Document:

Exhibit

Exhibit 10.2

BAKER HUGHES INCORPORATED
RESTRICTED STOCK UNIT AWARD AGREEMENT
AWARD OF RESTRICTED STOCK UNITS
PAYABLE IN SHARES
The Compensation Committee (the “Committee”) of the Board of Directors of Baker Hughes Incorporated, a Delaware corporation (the “Company”), pursuant to the Baker Hughes Incorporated 2002 Director & Officer Long-Term Incentive Plan (the “Plan”), hereby awards to you, effective as of Grant Date (the “Grant Date”), a certain number of restricted stock units, in each case, as set forth in your Plan account maintained by Fidelity Stock Plan Services (the “Restricted Stock Units”), on the following terms and conditions:
The Restricted Stock Units that are awarded hereby to you will be subject to the prohibitions and restrictions set forth herein with respect to the sale or other disposition of such Restricted Stock Units and the obligation to forfeit and surrender such Restricted Stock Units to the Company (the “Forfeiture Restrictions”).  The Forfeiture Restrictions will lapse as to the Restricted Stock Units that are awarded hereby in accordance with the following schedule provided that the termination of your employment with the Company and all Affiliates (a “Termination of Employment”) has not occurred prior to the applicable lapse date:
		
	(a)
	on the first anniversary of the Grant Date, the Forfeiture Restrictions will lapse as to one-third of the Restricted Stock Units subject to this Agreement; and

		
	(b)
	on each succeeding anniversary of the Grant Date, the Forfeiture Restrictions will lapse as to an additional one-third of the Restricted Stock Units subject to this Agreement, so that on the third anniversary of the Grant Date the Forfeiture Restrictions will lapse as to all of the Restricted Stock Units subject to this Agreement.

If a Change in Control of the Company occurs or you incur a Termination of Employment before the third anniversary of the Grant Date, your rights to the Restricted Stock Units under this Agreement will be determined as provided in the attached Terms and Conditions of Restricted Stock Unit Award Agreements (the “Terms and Conditions”).
Upon the lapse of the Forfeiture Restrictions applicable to a Restricted Stock Unit that is awarded hereby, the Company will issue to you one share of the Company’s Common Stock, $1.00 par value per share (the “Common Stock”), in exchange for such Restricted Stock Unit and thereafter you will have no further rights with respect to such Restricted Stock Unit.  Such shares of the Common Stock will be transferable by you (except to the extent that any proposed transfer would, in the opinion of counsel satisfactory to the Company, constitute a violation of applicable federal or state securities law).
If during the period you hold any Restricted Stock Units awarded hereby the Company pays a dividend in cash with respect to the outstanding shares of the Common Stock (a “Cash Dividend”), then the Company will credit to an account established for you by the Company under the Plan (the “Account”) an amount equal to the product of (a) the Restricted Stock Units awarded hereby that have not been forfeited to the Company or exchanged by the Company for shares of the Common Stock and (b) the amount of the Cash Dividend paid per share of the Common Stock (the “Dividend Equivalent Credit”).  The Company will pay to you, in cash, an amount equal to the Dividend Equivalent Credits credited to 

 

the Account with respect to a Restricted Stock Unit on the date the Forfeiture Restrictions applicable to that Restricted Stock Unit lapse (and in no case later than the end of the calendar year in which the Forfeiture Restrictions applicable to that Restricted Stock Unit lapse or, if later, the 15th day of the third month following the date the Forfeiture Restrictions applicable to that Restricted Stock Unit lapse).
If during the period you hold any Restricted Stock Units awarded hereby the Company pays a dividend in shares of the Common Stock with respect to the outstanding shares of the Common Stock, then the Company will increase the Restricted Stock Units awarded hereby that have not then been exchanged by the Company for shares of the Common Stock by an amount equal to the product of (a) the Restricted Stock Units awarded hereby that have not been forfeited to the Company or exchanged by the Company for shares of the Common Stock and (b) the number of shares of the Common Stock paid by the Company per share of the Common Stock (collectively, the “Stock Dividend Restricted Stock Units”).  Each Stock Dividend Restricted Stock Unit will be subject to same Forfeiture Restrictions and other restrictions, limitations and conditions applicable to the Restricted Stock Unit for which such Stock Dividend Restricted Stock Unit was awarded and will be exchanged for shares of the Common Stock at the same time and on the same basis as such Restricted Stock Unit.
The Restricted Stock Units may not be sold, assigned, pledged, exchanged, hypothecated or otherwise transferred, encumbered or disposed of (other than by will or the applicable laws of descent and distribution).  Any such attempted sale, assignment, pledge, exchange, hypothecation, transfer, encumbrance or disposition in violation of this Agreement will be void and the Company Group will not be bound thereby.
Any shares of the Common Stock issued to you in exchange for Restricted Stock Units awarded hereby may not be sold or otherwise disposed of in any manner that would constitute a violation of any applicable federal or state securities laws.  You also agree that the Company may refuse to transfer any such shares of the Common Stock if such proposed transfer would in the opinion of counsel satisfactory to the Company constitute a violation of any applicable federal or state securities law.
The shares of Common Stock that may be issued under the Plan are registered with the Securities and Exchange Commission under a Registration Statement on Form S-8.  A Prospectus describing the Plan and the shares of Common Stock and the Terms and Conditions can be found on the Fidelity Stock Plan Services website at www.netbenefits.fidelity.com. You may also obtain a copy of the Plan Prospectus by requesting it from the Company.
Capitalized terms that are not defined herein will have the meaning ascribed to such terms in the Plan or the Terms and Conditions.
In accepting the award of Restricted Stock Units set forth in this Agreement you accept and agree to be bound by all the terms and conditions of the Plan, this Agreement and the Terms and Conditions.
                           	
		
	 
	BAKER HUGHES INCORPORATED

	 
	 

	 
	Martin S. Craighead

	 
	Chairman and Chief Executive Officer

 

BAKER HUGHES INCORPORATED
TERMS AND CONDITIONS 
OF 
RESTRICTED STOCK UNIT AWARD AGREEMENTS  

These Terms and Conditions are applicable to a restricted stock unit award granted pursuant to the Baker Hughes Incorporated 2002 Director & Officer Long-Term Incentive Plan (the “Plan”) and are incorporated as part of the Restricted Stock Unit Award Agreement setting forth the terms of such restricted stock unit award (the “Agreement”).
1.    TERMINATION OF EMPLOYMENT/CHANGE IN CONTROL.  The following provisions will apply in the event your employment with the Company and all Affiliates (collectively, the “Company Group”) terminates (a “Termination of Employment”), or a Change in Control of the Company occurs, before the third anniversary of the Grant Date (the “Third Anniversary Date”) under the Restricted Stock Unit Award Agreement awarded to you (the “Agreement”):
1.1    Termination Generally.  If you incur a Termination of Employment on or before the Third Anniversary Date for any reason other than one of the reasons described in Sections 1.2 through 1.5 below, the Forfeiture Restrictions then applicable to the Restricted Stock Units will not lapse and the number of Restricted Stock Units then subject to the Forfeiture Restrictions will be forfeited to the Company on the date of your Termination of Employment.
1.2    Potential or Actual Change in Control.
(i)     Termination of Employment Without Cause or for Good Reason in Connection With a Potential Change in Control on or Before the Third Anniversary Date.  If (a) you incur a Termination of Employment without Cause on or before the Third Anniversary Date prior to a Change in Control of the Company (whether or not a Change in Control ever occurs) and such Termination of Employment is at the request or direction of a Person who has entered into an agreement with the Company the consummation of which would constitute a Change in Control of the Company or is otherwise in connection with or in anticipation of a Change in Control of the Company (whether or not a Change in Control ever occurs) or (b) you incur a Termination of Employment for Good Reason on or before the Third Anniversary Date prior to a Change in Control of the Company (whether or not a Change in Control ever occurs), and such Termination of Employment or the circumstance or event which constitutes Good Reason occurs at the request or direction of a Person who has entered into an agreement with the Company the consummation of which would constitute a Change in Control of the Company or is otherwise in connection with or in anticipation of a Change in Control of the Company (whether or not a Change in Control ever occurs), then all remaining Forfeiture Restrictions will immediately lapse on the date of your Separation From Service if you are not a Specified Employee or on the date that is six months following your Separation From Service if you are a Specified Employee.  For purposes of these Terms and Conditions, “Separation From Service” has the meaning ascribed to that term in Section 409A and “Specified Employee” means a person who is, as of the date of the person’s 

 
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Separation From Service, a “specified employee” within the meaning of Section 409A, taking into account the elections made and procedures established in resolutions adopted by the Administrative Committee of Baker Hughes.  For purposes of these Terms and Conditions, “Section 409A” means section 409A of the Internal Revenue Code of 1986, as amended and the Department of Treasury rules and regulations issued thereunder.
(ii)     Termination of Employment Does Not Occur Before a Change in Control on or Before the Third Anniversary Date.  If a Change in Control of the Company occurs on or before the Third Anniversary Date and you do not incur a Termination of Employment before the date the Change in Control of the Company occurs, then all remaining Forfeiture Restrictions will lapse at the time specified below.  All remaining Forfeiture Restrictions will lapse on the date the Change in Control of the Company occurs if the Change in Control of the Company qualifies as a change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the corporation, within the meaning of Section 409A, or (b) on the Third Anniversary Date, if the Change in Control of the Company does not so qualify.  

1.3    Divestiture of Business Unit  Notwithstanding any other provision of the Agreement or these Terms and Conditions to the contrary, if the Company Group divests its ownership of a business unit of the Company or one or more Affiliates (a “Unit”) and you incur a Termination of Employment in connection with such divestiture (other than for Cause or death or due to your becoming permanently disabled within the meaning of Section 1.4), the Forfeiture Restrictions will lapse at the time specified below as to that number of Restricted Stock Units that are then subject to Forfeiture Restrictions on the date of your Termination of Employment equal to:
(1) multiplied by (2) divided by (3)
where (1) is the number of Restricted Stock Units that are then subject to Forfeiture Restrictions on the date of your Termination of Employment, (2) is the number of days during the period commencing on the Grant Date and ending on the date of your Termination of Employment, and (3) is the number of days during the period commencing on the Grant Date and ending on the Third Anniversary Date.  Such Forfeiture Restrictions specified in the preceding sentence will lapse on the date the Change in Control of the Company occurs if the Change in Control of the Company qualifies as a change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the corporation, within the meaning of Section 409A, or (b) on the Third Anniversary Date, if the Change in Control of the Company does not so qualify.  The Forfeiture Restrictions then applicable to all the remaining Restricted Stock Units after the application of the previous provisions of this Section 1.3 will not lapse and such Restricted Stock Units will be immediately forfeited to the Company.  A “Divestiture” includes the disposition of a Unit to an entity that the Company does not consolidate in its financial statements, whether the disposition is structured as a sale or transfer of stock (or other ownership interest), a merger, a consolidation or a sale or transfer of assets, or a combination thereof, provided that a “Divestiture” will not include a disposition that constitutes a Change in Control.

 
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1.4    Disability.  Notwithstanding any other provision of the Agreement or these Terms and Conditions to the contrary, if you become permanently disabled before the Third Anniversary Date and while in the active employ of one or more members of the Company Group, all remaining Forfeiture Restrictions will immediately lapse on the date of your Termination of Employment due to your becoming permanently disabled.  For purposes of this Section 1.4, you will be “permanently disabled” if you (a) are unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (b) are, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three (3) months under an accident and health plan covering employees of the Company Group.
1.5    Death.  Notwithstanding any other provision of the Agreement or these Terms and Conditions to the contrary, if you die before the Third Anniversary Date and while in the active employ of one or more members of the Company Group, all remaining Forfeiture Restrictions will immediately lapse on the date of your Termination of Employment due to death.
		
	2.
	PROHIBITED ACTIVITY.  Notwithstanding any other provision of these Terms and Conditions or the Agreement, if you engage in a “Prohibited Activity,” as described below, while employed by one or more members of the Company Group or within two years after the date of your Termination of Employment, then your right to receive the shares of the Common Stock, to the extent still outstanding at that time, will be completely forfeited.  A “Prohibited Activity” will be deemed to have occurred, as determined by the Committee in its sole and absolute discretion, if you divulge any non-public, confidential or proprietary information of the Company Group, but excluding information that (a) becomes generally available to the public other than as a result of your public use, disclosure, or fault, or (b) becomes available to you on a non-confidential basis after the date of your Termination of Employment from a source other than a member of the Company Group prior to the public use or disclosure by you, provided that such source is not bound by a confidentiality agreement or otherwise prohibited from transmitting the information by a contractual, legal or fiduciary obligation.

		
	3.
	TAX WITHHOLDING.  To the extent that the receipt of the Restricted Stock Units or the lapse of any Forfeiture Restrictions results in income, wages or other compensation to you for any income, employment or other tax purposes with respect to which the Company has a withholding obligation, the Company is authorized to withhold from any shares of Common Stock issued under the Agreement or from any cash or stock remuneration or other payment then or thereafter payable to you any tax required to be withheld by reason of such taxable income, wages or compensation including (without limitation) shares of the Common Stock sufficient to satisfy the withholding obligation.

		
	4.
	NONTRANSFERABILITY. The Agreement is not transferable by you otherwise than by will or by the laws of descent and distribution.

 
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	5.
	CAPITAL ADJUSTMENTS AND REORGANIZATIONS.  The existence of the Restricted Stock Units will not affect in any way the right or power of the Company or any company the stock of which is awarded pursuant to the Agreement to make or authorize any adjustment, recapitalization, reorganization or other change in its capital structure or its business, engage in any merger or consolidation, issue any debt or equity securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose of all or any part of its assets or business, or engage in any other corporate act or proceeding.

		
	6.
	RESTRICTED STOCK UNITS DO NOT AWARD ANY RIGHTS OF A SHAREHOLDER.  You will not have the voting rights or any of the other rights, powers or privileges of a holder of the Common Stock with respect to the Restricted Stock Units that are awarded hereby.  Only after a share of the Common Stock is issued in exchange for a Restricted Stock Unit will you have all of the rights of a shareholder with respect to such share of Common Stock issued in exchange for a Restricted Stock Unit.

		
	7.
	EMPLOYMENT RELATIONSHIP.  For purposes of the Agreement, you will be considered to be in the employment of the Company Group as long as you have an employment relationship with the Company Group.  The Committee will determine any questions as to whether and when there has been a termination of such employment relationship, and the cause of such termination, under the Plan and the Committee’s determination will be final and binding on all persons.

		
	8.
	NOT AN EMPLOYMENT AGREEMENT.  The Agreement is not an employment agreement, and no provision of the Agreement will be construed or interpreted to create an employment relationship between you and the Company or any Affiliate or guarantee the right to remain employed by the Company or any Affiliate for any specified term.

		
	9.
	SECURITIES ACT LEGEND.  If you are an officer or affiliate of the Company under the Securities Act of 1933, you consent to the placing on any certificate for shares of the Common Stock issued under the Agreement an appropriate legend restricting resale or other transfer of such shares except in accordance with such Act and all applicable rules thereunder.

		
	10.
	LIMIT OF LIABILITY.  Under no circumstances will the Company or any Affiliate be liable for any indirect, incidental, consequential or special damages (including lost profits) of any form incurred by any person, whether or not foreseeable and regardless of the form of the act in which such a claim may be brought, with respect to the Plan.

		
	11.
	DATA PRIVACY.  The Company’s Human Resources Department in Houston, Texas (U.S.A.) administers and maintains the data regarding the Plan, the awardees and the restricted stock units granted to awardees for all employees in the Company Group worldwide.

The data administered and maintained by the Company includes information that may be considered personal data, including the name of the awardee, the award granted and the number of restricted units included in any award (“Employee Personal Data”).  From time to time during the course of your employment in the Company Group, the Company may transfer certain of your Employee Personal Data to Affiliates as necessary for the purpose of implementation, administration and management of your participation in the Plan (the 

 
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“Purposes”), and the Company and its Affiliates may each further transfer your Employee Personal Data to any third parties assisting the Company in the implementation, administration and management of the Plan (collectively, “Data Recipients”).  The countries to which your Employee Personal Data may be transferred may have data protection standards that are different than those in your home country and that offer a level of data protection that is less than that in your home country.
In accepting the award of the Restricted Stock Units set forth in the Agreement, you hereby expressly acknowledge that you understand that from time to time during the course of your employment in the Company Group the Company may transfer your Employee Personal Data to Data Recipients for the Purposes.  You further acknowledge that you understand that the countries to which your Employee Personal Data may be transferred may have data protection standards that are different than those in your home country and that offer a level of data protection that is less than that in your home country.
Further, in accepting the award of the Restricted Stock Units set forth in the Agreement, you hereby expressly affirm that you do not object, and you hereby expressly consent, to the transfer of your Employee Personal Data by the Company to Data Recipients for the Purposes from time to time during the course of your employment in the Company Group.
		
	12.
	RECOUPMENTS.  If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under applicable securities laws, if you are then a current or former executive officer of the Company you will forfeit and must repay to the Company any compensation awarded under the Agreement to the extent specified in any of the Company’s compensation recoupment policies established or amended (now or in the future) in compliance with the rules and standards of the Securities and Exchange Commission Committee under or in connection with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Further, if the Company is required to prepare an accounting restatement due in whole or in part to your misconduct, you will forfeit and must repay to the Company any compensation awarded under the Agreement to the extent required by the Board of Directors of the Company in accordance with the terms of the Company’s compensation recoupment policy.

		
	13.
	OTHER AGREEMENTS.  Nothing in these Terms and Conditions is intended to reduce the Company’s protections or your obligations under (1) any other agreement between you and the Company or any other member of the Company Group, (2) the common law, or (3) any applicable state,  federal or foreign statute. 

		
	14.
	GOVERNING LAW AND VENUE.  The Plan, these Terms and Conditions and the award of the restricted stock units set forth in the Agreement shall be governed by the laws of the State of Texas, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan, these Terms and Conditions and the award of the restricted stock units to the substantive law of another jurisdiction. In accepting the award of the restricted stock units you are deemed to agree to submit to the exclusive jurisdiction and venue of the federal or state courts of Harris County, Texas, to resolve any and all issues that may arise out of or relate to  the Plan, these Terms and Conditions and the award of the restricted stock units.    

 
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	15.
	SEVERABILITY AND BLUE PENCILING.  If any single Section or clause of these Terms and Conditions should be found unenforceable, it shall be severed and the remaining Sections and clauses of these Terms and Conditions shall be enforced in accordance with the intent of these Terms and Conditions.  If any particular provision of these Terms and Conditions shall be adjudicated to be invalid or unenforceable, the Company and you specifically authorize the court making such determination to edit the invalid or unenforceable provision to allow these Terms and Conditions, and the provisions thereof, to be valid and enforceable to the fullest extent allowed by law or public policy.

		
	16.
	MISCELLANEOUS.  The Agreement is awarded pursuant to and is subject to all of the provisions of the Plan, including amendments to the Plan, if any.  In the event of a conflict between these Terms and Conditions and the Plan provisions, the Plan provisions will control.  The terms “you” and “your” refer to the Participant named in the Agreement.  Capitalized terms that are not defined herein will have the meanings ascribed to such terms in the Plan or the Agreement.  The Company’s rights under these Terms and Conditions and the Agreement may be assigned by the Company.

 
6POSITIVEID
CORPORATION

 

CERTIFICATE
OF DESIGNATIONS OF PREFERENCES,

RIGHTS AND LIMITATIONS

OF

SERIES II CONVERTIBLE PREFERRED STOCK

 

The
undersigned, William J. Caragol and Allison F. Tomek, hereby certify that:

 

1.They
are the Chief Executive Officer and Secretary, respectively, of PositiveID Corporation, a Delaware corporation (the “Corporation”).

 

2.The
Corporation is authorized to issue 5,000,000 shares of preferred stock. There are currently 7,600 shares of preferred stock designated,
of which 400 shares are Series C Preferred Stock; 2,500 shares are Series F Preferred Stock; 500 shares are Series H Preferred
Stock; 2,500 shares are Series I Convertible Preferred Stock; and 1,700 shares are Series J Convertible Preferred Stock. Currently
no shares of Series C Preferred Stock are outstanding; no shares of Series F Preferred Stock are outstanding; no shares of Series
H Stock are outstanding; 2,025 shares of Series I Convertible Preferred Stock are issued and outstanding; and 125 shares of Series
J Convertible Preferred Stock are issued and outstanding.

 

3.The
following resolutions were duly adopted by the Board of Directors:

 

WHEREAS,
the Certificate of Incorporation of the Corporation provides for a class of its authorized stock known as preferred stock, comprised
of 5,000,000 shares of $0.01 par value preferred stock (the “Preferred Stock”), issuable from time to time
in one or more series;

 

WHEREAS,
the Board of Directors of the Corporation is authorized to fix the dividend rights, dividend rate, voting rights, conversion rights,
rights and terms of redemption and liquidation preferences of any wholly unissued series of Preferred Stock and the number of
shares constituting any series and the designation thereof, of any of them;

 

WHEREAS,
it is the desire of the Board of Directors of the Corporation, pursuant to its authority as aforesaid in accordance with Section
151 of the General Corporation Law of the State of Delaware, and as set forth in this Certificate of Designations of Preferences,
Rights and Limitations of Series II Convertible Preferred Stock, to designate the rights, preferences, restrictions and other
matters relating to the Series II Convertible Preferred Stock, which will consist of 3,000 shares of Preferred Stock, par value
$0.01 per share, which the Corporation has the authority to issue, as follows:

 

NOW,
THEREFORE, BE IT RESOLVED, that the Board of Directors does hereby provide for the issuance of a series of Preferred Stock for
cash or exchange of other securities, rights or property and does hereby fix and determine the rights, preferences, restrictions
and other matters relating to such series of Preferred Stock are hereby amended and restated as follows:

 

I.Terms
of Preferred Stock.

 

A.Designation
and Amount. The series of Preferred Stock will be designated as the Corporation’s Series II Convertible Preferred
Stock (the “Series II Preferred Stock”) and the number of shares so designated will be 3,000, which will not
be subject to increase without the consent of the holders (each a “Holder” and collectively, the “Holders”)
of a majority of the outstanding shares of Series II Preferred Stock. 

 

    	 	 	 

    	 

    

 

B.Ranking
and Voting.

 

1.Ranking.
The Series
II Preferred Stock will, with respect to dividend rights and rights upon liquidation, winding-up or dissolution, rank: (a) senior
with respect to dividends and right of liquidation with the Corporation’s Common Stock (“Common
Stock”); (b) pari passu with respect to dividends and right of liquidation with the
Corporation’s Series I Convertible Preferred Stock and Series J Convertible Preferred Stock; and (c) junior to all existing
and future indebtedness of the Corporation. Without the prior written consent of Holders holding a majority of the outstanding
shares of Series II Preferred Stock, the Company may not issue any Preferred Stock that is not junior to the Series II Preferred
Stock in right of dividends and liquidation.

 

2.Voting.
Each share of Series II Preferred Stock shall be entitled to vote on all matters requiring shareholder vote. Each share of
Series II Preferred Stock will be entitled to the number of votes per share based on the calculation of As Converted Voting
Shares, as defined in Section I.G.5.a, calculated on any record date for any shareholder vote.

 

C.Dividends.

 

1.Commencing
on the date of the issuance of such shares of Series II Preferred Stock (each respectively an “Issuance Date”),
Holders of Series II Preferred Stock will be entitled to dividends on each outstanding share of Series II Preferred Stock (“Dividends”),
at a rate equal to 6.0% per annum (“Dividend Rate”) of a stated value (“Stated Value”) of
$1,000 per share of Series II Preferred Stock, subject to appropriate adjustment in the event of any stock splits, stock dividends,
combinations of shares, recapitalizations or other such events relating to the outstanding Series II Preferred Stock at any time
and from time to timeAny calculation of the amount of such Dividends payable pursuant to the provisions of this Section I.C.
will be made based on a 365-day year, compounded monthly. 

 

2.So
long as any shares of Series II Preferred Stock are outstanding, no dividends or other distributions will be paid, declared or
set apart with respect to any Common Stock. 

 

D.Protective
Provision. So long as any shares of Series II Preferred Stock are outstanding, the Corporation will not, without the affirmative
approval of the Holders of a majority of the shares of Series II Preferred Stock then outstanding (voting as a class), (i) alter
or change adversely the powers, preferences or rights given to the Series II Preferred Stock or alter or amend this Certificate
of Designations, (ii) authorize or create any class of stock ranking as to distribution of dividends senior to the Series II Preferred
Stock, (iii) amend its articles of incorporation or other charter documents in breach of any of the provisions hereof, (iv) increase
the authorized number of shares of Series II Preferred Stock, (v) liquidate, dissolve or wind-up the business and affairs of the
Corporation, or effect any Deemed Liquidation Event (as defined below), or (vi) enter into any agreement with respect to any of
the foregoing.

 

    	 	2	 

    	 

    

 

1.A
”Deemed Liquidation Event” will mean: (a) a merger or consolidation in which the Corporation is a constituent
party or a subsidiary of the Corporation is a constituent party and the Corporation issues shares of its capital stock pursuant
to such merger or consolidation, except any such merger or consolidation involving the Corporation or a subsidiary in which the
shares of capital stock of the Corporation outstanding immediately prior to such merger or consolidation continue to represent,
or are converted into or exchanged for shares of capital stock that represent, immediately following such merger or consolidation,
at least a majority, by voting power, of the capital stock of the surviving or resulting corporation or, if the surviving or resulting
corporation is a wholly-owned subsidiary of another corporation immediately following such merger or consolidation, the parent
corporation of such surviving or resulting corporation; or (b) the sale, lease, transfer, exclusive license or other disposition,
in a single transaction or series of related transactions, by the Corporation or any subsidiary of the Corporation of all or substantially
all the assets of the Corporation and its subsidiaries taken as a whole, or the sale or disposition (whether by merger or otherwise)
of one or more subsidiaries of the Corporation if substantially all of the assets of the Corporation and its subsidiaries taken
as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition
is to a wholly owned subsidiary of the Corporation.

 

2.The
Corporation will not have the power to effect a Deemed Liquidation Event referred to in Section I.D.1 unless the agreement
or plan of merger or consolidation for such transaction provides that the consideration payable to the stockholders of the Corporation
will be allocated among the holders of capital stock of the Corporation in accordance with Section I.E.

 

E.Liquidation.

 

1.Upon
any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, after payment or provision for
payment of debts and other liabilities of the Corporation, and after payment or provision for any liquidation preference payable
to the holders of any Preferred Stock ranking senior upon liquidation to the Series II Preferred Stock, but prior to any distribution
or payment made to the holders of Common Stock or the holders of any Preferred Stock ranking junior upon liquidation to the Series
II Preferred Stock by reason of their ownership thereof, the Holders of Series II Preferred Stock will be entitled to be paid
out of the assets of the Corporation available for distribution to its stockholders an amount with respect to each share of Series
II Preferred Stock equal to the Stated Value thereof plus any accrued but unpaid Dividends thereon (collectively, the “Series
II Liquidation Value”).

 

2.If,
upon any liquidation, dissolution or winding up of the Corporation, the assets of the Corporation will be insufficient to make
payment in full to all Holders, then such assets will be distributed among the Holders at the time outstanding, ratably in proportion
to the full amounts to which they would otherwise be respectively entitled.

 

F.Redemption.

 

1.Corporation’s
Redemption Option. At any time after one year from the Issuance Date and subject to a ten-day advance notice (via email
or overnight courier) to the Holders, the Corporation will have the right, at the Corporation’s option, to redeem all or
any portion of the shares of Series II Preferred Stock at a price per share equal to 100% of the Series II Liquidation Value of
the shares being redeemed. After the initial notice is delivered to the Holders, during the ten-day notice period, Holders will
have the right to convert pursuant to Section I.G.

 

    	 	3	 

    	 

    

 

2.Mandatory
Redemption. If the Corporation determines to liquidate, dissolve or wind-up its business and affairs, or effect any Deemed
Liquidation Event, the Corporation will redeem all of the outstanding shares of Series II Preferred Stock prior to the Deemed
Liquidation Event. All Series II Preferred Shares shall be redeemed no later than three years after the Deemed Liquidation Event.

 

3.Mechanics
of Redemption. If the Corporation elects to redeem any of the Holders’ Series II Preferred Stock then outstanding,
it will deliver written notice thereof via email or overnight courier (“Notice of Redemption at Option of Corporation”)
to each Holder whose shares are to be redeemed, which Notice of Redemption at Option of Corporation will indicate (a) the number
of shares of Series II Preferred Stock that the Corporation is electing to redeem, (b) the date upon which the applicable redemption
price will be paid, and (c) the amount of the applicable redemption price (with a reasonably detailed calculation thereof). The
Notice of Redemption at Option of Corporation may not be delivered until at least ten days after notice is delivered to Holder
pursuant to Section I.F.1. Upon receipt of such initial notice, the Holder will have the right to convert its Series II Preferred
Shares into common shares pursuant to Section I.G. 

 

4.Payment
of Redemption Price. Upon receipt by any Holder of a Notice of Redemption at Option of Corporation, if Holder does not
choose to convert pursuant to Section I.G, such Holder will promptly submit to the Corporation such Holder’s
Series II Preferred Stock certificates. Upon receipt of such Holder’s Series II Preferred Stock certificates, the Corporation
will pay the applicable redemption price to such Holder in cash. 

 

G.Conversion.

 

1.Mechanics
of Conversion.

 

a.Subject
to the terms and conditions hereof, any or all of the outstanding shares of Series II Preferred Stock may be converted into shares
of Common Stock at any time or times after the Issuance Date, at the option of Holder, (i) if at the option of a Holder, by delivery
of a written notice to the Corporation (the “Holder Conversion Notice”), of the Holder’s election to
convert Series II Preferred Stock and the number of shares of Series II Preferred Stock which such Holder is electing to convert,
or (ii) if at the option of the Corporation, if and only if the closing price of the Common Stock on the Trading Market exceeds
400% of the Conversion Price for a period of twenty consecutive trading days, by delivery of a written notice to the subject Holder
(the “Corporation Conversion Notice” and, with the Holder Conversion Notice, each a “Conversion Notice”),
stating the Corporation’s election to convert Series II Preferred Stock and the number of such Holder’s shares of
Series II Preferred Stock to be converted.

 

b.Within
one day of the Corporation Conversion Notice or Holder Conversion Notice, the Corporation shall transmit by facsimile or electronic
mail an acknowledgment of confirmation of receipt of the Holder Conversion Notice or issuance of the Corporation Conversion Notice
to the Holder. Within three days of notice the Corporation shall issue a certificate for the number of shares specified in the
Holder Conversion Notice or Corporation Conversion Notice.

 

2.Payment
and Issuance Upon Conversion. In the event of a conversion of any Series II Preferred Stock, the Corporation shall issue
to such Holder a number of Conversion Shares equal to (i) the Series II Liquidation Value multiplied by (ii) the number of shares
of Series II Preferred Stock held by such Holder and subject to the Holder Conversion Notice, divided by (iii) the Conversion
Price with respect to such Series II Preferred Stock.

 

    	 	4	 

    	 

    

 

3.Stock
Splits. If the Corporation at any time and from time to time on or after the Issuance Date subdivides (by any stock split,
stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares of Common Stock into a greater number
of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately reduced and the number
of Conversion Shares will be proportionately increased. If the Corporation at any time and from time to time on or after the first
Issuance Date combines (by combination, reverse stock split, recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will
be proportionately increased and the number of Conversion Shares will be proportionately decreased. Any adjustment under this
Section I.G.3 shall become effective at the close of business on the date the subdivision or combination becomes effective.

 

4.Rights.
In addition to any adjustments pursuant to Section I.G.3, if at any time the Corporation grants, issues or sells any
options, convertible securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders
of any class of shares of Common Stock (the “Purchase Rights”), then Holder will be entitled to acquire, upon
the terms applicable to such Purchase Rights, the aggregate Purchase Rights which Holder could have acquired if Holder had held
the number of shares of Common Stock acquirable upon conversion of all Preferred Stock held by Holder immediately before the date
on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as
of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights.

 

5.Definitions.
For purposes of this Section I, the following terms shall have the following meanings:

 

a.“As
Converted Voting Shares” means the number of votes per share of Series II Preferred Stock calculated as pursuant to
the following formula: Number of votes per Series II share = Series II Liquidation Value per share, divided by the Conversion
Price, multiplied by twenty-five (25).

 

b.“Conversion
Price” means a price per share of Common Stock equal to 100% of the lowest daily volume weighted average price of the
Common Stock during the subsequent 12 months following the Issuance Date, subject to adjustment as otherwise provided herein.

 

c.“Conversion
Shares” means shares of Common Stock issuable upon conversion of Series II Preferred Stock.

 

d.“Trading
Day” means any day on which the Common Stock is traded on the Trading Market; provided that it shall not include any
day on which the Common Stock is (i) scheduled to trade for less than 5 hours, or (ii) suspended from trading.

 

e.“Trading
Market” means the OTC Bulletin Board, the OTCQB, the OTC Pink Sheets, the NASDAQ Capital Market, the NASDAQ Global Market,
the NASDAQ Global Select Market, the NYSE Amex, or the New York Stock Exchange, whichever is at the time the principal trading
exchange or market for the Common Stock. All Trading Market data shall be measured as provided by the appropriate function of
the Bloomberg Professional service of Bloomberg Financial Markets or its successor performing similar functions.

 

    	 	5	 

    	 

    

 

f.“Transaction
Documents” means, collectively, any Stock Purchase Agreement pursuant to which any share of Series II Preferred Stock
is issued, and all other agreements, certificates and documents referenced therein or annexed thereto.

 

H.Stock
Register. The Corporation will keep at its principal office, or at the offices of the transfer agent, a register of the
Series II Preferred Stock, which shall be prima facie indicia of ownership of all outstanding shares of Series II Preferred Stock.
Upon the surrender of any certificate representing Series II Preferred Stock at such place, the Corporation, at the request of
the record Holder of such certificate, will execute and deliver (at the Corporation’s expense) a new certificate or certificates
in exchange therefor representing in the aggregate the number of shares represented by the surrendered certificate. Each such
new certificate will be registered in such name and will represent such number of shares as is requested by the Holder of the
surrendered certificate and will be substantially identical in form to the surrendered certificate.

 

II.Miscellaneous.

 

A.Notices.
Any and all notices to the Corporation will be addressed to the Corporation’s Chief Executive Officer at the Corporation’s
principal place of business on file with the Secretary of State of the State of Delaware. Any and all notices or other communications
or deliveries to be provided by the Corporation to any Holder hereunder will be in writing and delivered personally, by electronic
mail or facsimile, sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile telephone
number or address of such Holder appearing on the books of the Corporation, or if no such facsimile telephone number or address
appears, at the principal place of business of the Holder. Any notice or other communication or deliveries hereunder will be deemed
given and effective on the earliest of (1) the date of transmission, if such notice or communication is delivered via facsimile
at the facsimile telephone number specified in this Section II.A prior to 5:30 p.m. Eastern time, (2) the first business
day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile telephone number
specified in this section later than 5:30 p.m. but prior to 11:59 p.m. Eastern time on such date, (3) the second business day
following the date of mailing, if sent by nationally recognized overnight courier service, or (4) upon actual receipt by the party
to whom such notice is required to be given.

 

B.Lost
or Mutilated Preferred Stock Certificate. Upon receipt of evidence reasonably satisfactory to the Corporation (an affidavit
of the registered Holder will be satisfactory) of the ownership and the loss, theft, destruction or mutilation of any certificate
evidencing shares of Series II Preferred Stock, and in the case of any such loss, theft or destruction upon receipt of indemnity
reasonably satisfactory to the Corporation (provided that if the Holder is a financial institution or other institutional investor
its own agreement will be satisfactory) or in the case of any such mutilation upon surrender of such certificate, the Corporation
will, at its expense, execute and deliver in lieu of such certificate a new certificate of like kind representing the number of
shares of such class represented by such lost, stolen, destroyed or mutilated certificate and dated the date of such lost, stolen,
destroyed or mutilated certificate.

 

C.Headings.
The headings contained herein are for convenience only and will not be deemed to limit or affect any of the provisions hereof.

 

    	 	6	 

    	 

    

 

RESOLVED,
FURTHER, that the chairman, chief executive officer, chief financial officer, president or any vice-president, and the secretary
or any assistant secretary, of the Corporation be and they hereby are authorized and directed to prepare and file a Designation
of Preferences, Rights and Limitations of Series II Preferred Stock in accordance with the foregoing resolution and the provisions
of Delaware law.

 

IN
WITNESS WHEREOF, the undersigned have executed this Certificate this 25th day of July, 2016.

 

	Signed:
    	/s/
    William J. Caragol	 
	Name:	William
    J. Caragol	 
	Title:
    	Chief
    Executive Officer	 
	 	 	 
	Signed:
    	/s/
    Allison F. Tomek	 
	Name:
    	Allison
    F. Tomek	 
	Title:
    	Secretary	 

 

    	 	7

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