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is authorized to issue up to 40,000,000 shares of preferred stock with such rights, preferences and privileges as are determined
by the Board of Directors.&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&lt;b&gt;&lt;i&gt;Series C Convertible Preferred Stock&lt;/i&gt;&lt;/b&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.25in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"&gt;&amp;#160;The Company
has authorized 10,000 shares of Series C Preferred Stock (the &amp;#147;Series C Stock&amp;#148;), of which 9,974.185 shares were issued
and outstanding as of June 30, 2013 and December 31, 2012.&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"&gt;&lt;b&gt;&lt;i&gt;Series D Convertible Preferred
Stock&lt;/i&gt;&lt;/b&gt;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"&gt;&amp;#160;&lt;/p&gt;

&lt;p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt"&gt;&amp;#160;The Company
has authorized 3,600,000 shares of Series D Convertible Preferred Stock (the &amp;#147;Series D Stock&amp;#148;), of which 3,006,000
shares were issued and outstanding as of June 30, 2013 and December 31, 2012.&lt;/p&gt;

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