EXHIBIT 3
CERTIFICATE OF INCORPORATION
OF
HOSPITALITY WORLDWIDE SERVICES, INC.
Under Section 402 of the Business Corporation Law
1. The name of the corporation is HOSPITALITY WORLDWIDE
SERVICES, INC. (hereinafter referred to as the "Corporation").
2. The purpose or purposes for which the Corporation is formed
are as follows; to wit,
To engage in any lawful act or activity for which corporations
may be formed under the Business Corporation Law. The Corporation is not formed
to engage in any act or activity requiring the consent or approval of any state
official, department, board, agency or other body without such consent or
approval first being obtained.
To own, operate, manage, acquire and deal in property, real
and personal, which may be necessary to the conduct of the business.
The Corporation shall have all of the powers enumerated in
Section 202 of the Business Corporation Law, subject to any limitations provided
in the Business Corporation Law or any other statute in the State of New York.
3. The personal liability of the directors of the Corporation
is hereby eliminated to the fullest extent permitted by the provisions of
paragraph (b) of Section 402 of the Business Corporation Law of the State of New
York, as the same may be amended and supplemented. Any repeal or modification of
this Article by the shareholders of the Corporation shall not adversely affect
any right or protection of a director of the Corporation existing hereunder with
respect to any act or omission occurring prior to such repeal or modification.
4. The county in which the office of the corporation is to be
located in the State of New York is: Nassau
5. The aggregate number of shares of stock that the
Corporation shall have authority to issue is (i) twenty million (20,000,000)
shares of Common Stock, $0.01 par value per share ("Common Stock"), and (ii)
three million (3,000,000) shares of Preferred Stock, $0.01 par value per share
("Preferred Stock"). The Board of Directors is hereby authorized to fix or alter
the rights, preferences, privileges and restrictions granted to or imposed upon
any series of Preferred Stock, and the number of shares constituting any such
series and the designation thereof, or of any of them.
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1. DESIGNATIONS AND AMOUNT. 200,000 shares of the
Preferred Stock of the Corporation, stated value of $25 (the
"Stated Value") per share, shall constitute a class of
Preferred Stock designated as "Redeemable Convertible
Preferred Stock" (the "Preferred Stock").
2. RANK. The Preferred Stock shall rank senior to all
classes and series of common stock of the Corporation now or
hereafter authorized, issued or outstanding, including,
without limitation, the Common Stock, par value $.01 per share
("Common Stock") of the Corporation, and any other classes and
series of capital stock of the Corporation now or hereafter
authorized, issued or outstanding and specifically designated
as being junior to the Preferred Stock (collectively, the
"Junior Securities"). Unless authorized by a vote of the
holders of a majority of the Preferred Stock then outstanding,
no other capital stock of the Corporation shall rank senior to
the Preferred Stock.
3. DIVIDENDS.
(a) The holders of shares of Preferred Stock shall be
entitled to receive, out of assets of the Corporation legally
available for payment, cash dividends at the rate of six
percent (6%) (or $1.50) per annum per share of Preferred Stock
(the "Preferred Dividend"), payable annually and in arrears on
the ninetieth day following the end of the fiscal year of The
Leonard Parker Company, a Florida corporation ("LPC") in each
year, commencing March 31, 1998 (each a "dividend payment
date"); PROVIDED, HOWEVER, that if on any such day banks in
the City of New York are authorized or required to close, a
Preferred Dividend otherwise payable on such day will be
payable on the next day that banks in the City of New York are
not authorized or required to close. Such Preferred Dividend
shall accrue from the date of issuance and be cumulative from
the later of the date of initial issuance of such shares of
Preferred Stock or the most recent dividend payment date on
which dividends have been paid on the Preferred Stock by the
Corporation. The party that holds the Preferred Stock on an
applicable record date, as shall be fixed by the Board, for
any Preferred Dividend will be entitled to receive such
Preferred Dividend, without regard to whether the Preferred
Stock is outstanding subsequent to the applicable record date
but prior to the applicable dividend payment date. If the
Corporation is legally capable of paying the Preferred
Dividend and elects to accrue such amount, such accrued
dividends shall bear interest at the rate of 13 1/2% per annum
until paid.
(b) So long as any Preferred Stock shall remain
outstanding, the holders of the Preferred Stock shall be
entitled to receive, and Parker Reorder Corporation, a Florida
corporation ("Parker Reorder"), shall pay, out of the
cumulative net profits (the
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"Cumulative Net Profits") of Parker Reorder, a cash payment
(the "Participating Dividend") equal to twenty percent (20%)
of (i) the Cumulative Net Profits of Parker Reorder, less (ii)
all Participating Dividends previously made to the holders of
the Preferred Stock hereunder, such Participating Dividend to
be payable annually to the holders of the Preferred Stock
ninety (90) days following the end of each fiscal year of
Parker Reorder. Such Participating Dividend shall be paid in
only such amounts as shall be authenticated by a certificate
executed by two officers of the Corporation. "Cumulative Net
Profits" shall mean net profits of Parker Reorder computed in
accordance with generally accepted accounting principles based
on the audited financial statements of Parker Reorder,
assuming that taxes and other charges are assessed as if it
were a standalone company, cumulative from January 1, 1997.
For purposes of calculating Cumulative Net Profits, expenses
allocated to Parker Reorder for goods or services provided by
any affiliate of the Company shall not exceed the sum Parker
Reorder would have paid for such goods or services to an
unaffiliated third party. In the event that the Preferred
Stock ceases to be outstanding at a time prior to the end of a
fiscal year of Parker Reorder, Cumulative Net Profits and,
consequently, the Participating Dividend, shall be computed as
of the end of the most recently completed fiscal quarter of
Parker Reorder and shall be paid within ninety (90) days after
the Preferred Stock ceases to be outstanding.
(c) So long as any Preferred Stock shall remain
outstanding, neither the Corporation nor any subsidiary
thereof shall pay or declare any dividend or make any
distribution upon, nor shall any distribution be made in
respect of, any Junior Securities, unless all accrued and
unpaid Preferred Dividends on the Preferred Stock for all
prior and applicable dividend periods have been or
contemporaneously are declared and paid and the Preferred
Dividends on the Preferred Stock for the current and
applicable dividend period, if accrued, have been or
contemporaneously are declared and set apart for payment.
4. RIGHTS ON LIQUIDATION, DISSOLUTION OR WINDING UP,
ETC.
(a) In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the
assets of the Corporation available for distribution to the
stockholders of the Corporation, whether from capital, surplus
or earnings, shall be distributed in the following order of
priority:
(i) The holders of shares of Preferred Stock
shall be entitled to receive, in cash, prior and in preference
to any distribution to the holders of any Junior Securities an
amount equal to the Stated Value for each share of the
Preferred Stock then outstanding, plus an amount equal to all
accrued and unpaid Preferred Dividends and interest thereon,
if any, on such shares
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of Preferred Stock as of the date such payment is made to the
holders of shares of Preferred Stock; and
(ii) If there is a distribution pursuant to
Section 4(a)(i) hereof, the remaining assets of the
Corporation available for distribution, if any, to the
stockholders of the Corporation shall be distributed pro rata
to the holders of issued and outstanding shares of Common
Stock.
(b) If upon any liquidation, dissolution or winding
up of the Corporation, the assets distributable among the
holders of shares of Preferred Stock are insufficient to
permit the payment in full to the holders of all such shares
of all preferential amounts payable to all such holders, then
the entire assets of the Corporation thus distributable shall
be distributed ratably among the holders of the shares of
Preferred Stock in proportion to the respective amounts that
would be payable per share if such assets were sufficient to
permit payment in full.
(c) For purposes of this Section 4, a distribution of
assets in any liquidation, dissolution or winding up shall not
include (i) any consolidation or merger of the Corporation
with or into any other corporation, (ii) any liquidation,
dissolution, winding up or reorganization of the Corporation
immediately followed by reincorporation of another corporation
or (iii) a sale or other disposition of all or substantially
all of the Corporation's assets to another corporation;
PROVIDED, HOWEVER, that, in each case, effective provision is
made in the certificate of incorporation of the resulting and
surviving corporation or otherwise for the protection of the
rights of the holders of shares of Preferred Stock and that
the holders of a majority of the Preferred Stock then
outstanding, voting as a class, shall have given their
approval.
(d) After the payment of the full preferential
amounts provided for herein to the holders of shares of
Preferred Stock, such holders shall be entitled to no other or
further participation in the distribution of the assets of the
Corporation.
5. REDEMPTION OF PREFERRED STOCK.
(a) OPTIONAL REDEMPTION. At any time and from time to
time after the third anniversary of the closing of the
purchase by the Corporation of all of the common stock of LPC
(the "Closing"), the Corporation shall have the option, on a
pro rata basis, to (unless otherwise prevented by law) redeem
all, or any portion of, the Preferred Stock in accordance with
Section 5(c) and upon 30 days prior written notice of the
Corporation's intention to exercise the redemption option to
the holders of shares of Preferred Stock, at a redemption
price equal to the Stated Value for each such share of the
Preferred Stock then outstanding, plus an amount equal to all
accrued and unpaid Preferred Dividends and interest
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thereon, if any, on such shares of Preferred Stock as of the
date such redemption is exercised.
(b) MANDATORY REDEMPTION. At any time after the fifth
anniversary of the Closing, at the request of the holders of
all of the Preferred Stock, the Corporation must redeem,
within 90 days after such notice is received, all of the
Preferred Stock in accordance with Section 5(d), at a
redemption price equal to the Stated Value for each such share
of the Preferred Stock then outstanding, plus an amount equal
to all accrued and unpaid Preferred Dividends and interest
thereon, if any, on such shares of Preferred Stock as of the
date such redemption is exercised. If the Corporation does not
redeem all of the Preferred Stock as provided in this Section
5(b) within 90 days of notice duly served upon the Corporation
in accordance with Section 5(d) by holders of a majority in
interest of the Preferred Stock, then the holders of the
Preferred Stock, voting together as a class, shall be entitled
to elect such number of directors of the Corporation as shall
equal the minimum number required to equal a majority of such
Board of Directors. In order to effect such election, the
Corporation will, to the extent necessary, expand its Board of
Directors to allow for such additional members and will take
all such additional actions as may be reasonably necessary.
Upon payment of the redemption price of the Preferred Stock,
the class vote as described herein shall expire and the
holders of the Preferred Stock shall cause the directors so
elected to resign. The obligation of the Corporation to redeem
the Preferred Stock pursuant to this Section 5(b) shall be
secured by a pledge of all of the capital stock of LPC, as
evidenced by that certain Pledge Agreement, dated January 9,
1997.
(c) OPTIONAL REDEMPTION PROCEDURE. Notice of any
Preferred Stock redemption date pursuant to Section 5(a)
hereof shall be sent by the Corporation by first-class
certified mail, return receipt requested, postage prepaid, to
the holders of record of shares of Preferred Stock at their
respective addresses as the same shall appear on the books of
the Corporation at its principal corporate office. At any time
on or after any Preferred Stock redemption date, the holders
of record of shares of Preferred Stock to be redeemed on such
Preferred Stock redemption date in accordance with this
Section 5 shall be entitled to receive the applicable
redemption price upon actual delivery to the Corporation or
its agents of the certificates representing the shares to be
redeemed or delivery of an affidavit, in form reasonably
acceptable to the Corporation, that such certificates have
been lost or destroyed.
(d) MANDATORY REDEMPTION PROCEDURE. If the
Corporation receives an election from the holders of the
Preferred Stock pursuant to Section 5(b) hereof, notice of the
Preferred Stock redemption date (which shall be on or before
the date 90 days after notice to the Corporation) shall be
sent by the Corporation
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by first-class certified mail, return receipt requested,
postage prepaid, to the holders of record of shares of
Preferred Stock at their respective addresses as the same
shall appear on the books of the Corporation. At any time on
or after any Preferred Stock redemption date, the holders of
record of shares of Preferred Stock to be redeemed on such
Preferred Stock redemption date in accordance with this
Section 5 shall be entitled to receive the applicable
redemption price upon actual delivery to the Corporation or
its agents of the certificates representing the shares to be
redeemed.
6. VOTING RIGHTS. (a) Except as hereinafter set
forth, the holders of Preferred Stock shall be entitled to
vote together with the holders of the Common Stock on all
matters submitted to the holders of the Common Stock. Each
share of Preferred Stock shall be entitled to 4.17 votes.
(b) The holders of record of the Preferred Stock,
voting as a class, shall be entitled to elect two (2)
directors of the Corporation's Board of Directors at any time
that any of the Preferred Stock is outstanding.
(c) The holders of the Preferred Stock shall be
entitled to vote as a class with respect to any action of the
Corporation adversely affecting the Preferred Stock, its
rights and preferences.
7. CONVERSION OF PREFERRED STOCK.
(a) Any holder of the Preferred Stock shall have the
right at such holders' option, at any one time during the
period beginning immediately after the first anniversary of
the Closing and ending on the third anniversary of the
Closing, to convert all of such holder's shares of Preferred
Stock into (i) such whole number of shares of Common Stock
equal to the product of the Stated Value and the number of
such holder's shares of Preferred Stock, divided by the
average closing sale price (determined as provided in Section
7(e)) for the Common Stock for the 20 trading days immediately
prior to the date written notice of the holder's intention to
exercise the conversion option is given (the "Conversion
Rate"); PROVIDED, HOWEVER, that in no case shall the number of
shares of Common Stock into which each share of Preferred
Stock may be converted be less than five or greater than 25 or
(ii) such whole number of shares of common stock, par value
$1.00 per share, of Parker Reorder (the "Parker Common Stock")
equal to 9.80% of the outstanding shares of Parker Common
Stock as calculated immediately after such conversion.
(b) Before any holder of shares of Preferred Stock
shall be entitled to convert the same into shares of Common
Stock, such holder shall give (a) 10 days written notice in
the case of exercising the conversion rights set forth in
Section 7(a)(i)
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(which notice shall not be given later than 10 days prior to
the end of the third anniversary of the Closing) or (b) 30
days written notice in the case of exercising the conversion
rights set forth in Section 7(a)(ii) to the Corporation at its
principal corporate office of the election to convert the same
and shall state therein the name or names in which the
certificates for shares of Common Stock are to be issued.
After the expiration of the applicable notice period, the
holder of shares of Preferred Stock shall surrender the
certificates therefor, duly endorsed, at the office of the
Corporation or of any transfer agent for the Preferred Stock.
The Corporation shall, as soon as practicable thereafter,
issue and deliver at such office to such holder of Preferred
Stock, or to the nominee or nominees of such holder,
certificates for the number of shares of Common Stock or
Parker Common Stock to which such holders shall be entitled as
aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such
surrender of the shares of Preferred Stock to be converted,
and the person or persons entitled to receive the shares of
Common Stock or Parker Common Stock issuable upon such
conversion shall be treated for all purposes as the record
holder or holders of such shares of Common Stock or Parker
Common Stock as of such date.
(c) The Corporation shall not be required to issue
fractions of shares of Common Stock upon conversion of the
Preferred Stock. If any fractions of a share would, but for
this Section, be issuable upon any conversion of Preferred
Stock, in lieu of such fractional share, the Company shall pay
to the holder, in cash, an amount equal to the same fraction
of the price per share of Common Stock as determined in
Section 7(a)(i). Notwithstanding the foregoing, Parker Reorder
may issue fractions of shares of Parker Common Stock upon
conversion of the Preferred Stock.
(d) The Corporation and Parker Reorder shall reserve
and shall at all times have reserved out of each of their
respective authorized but unissued shares of Common Stock
sufficient shares of Common Stock to permit the conversion of
the then outstanding shares of the Preferred Stock pursuant to
this Section 7. All shares of Common Stock or shares of Parker
Common Stock which may be issued upon conversion of shares of
the Preferred Stock pursuant to this Section 7 shall be
validly issued, fully paid and nonassessable.
(e) The closing price for each day shall be the last
reported sale price or, in case no such reported sale takes
place on such date, the average of the reported closing bid
prices for ten consecutive trading days ending the last
trading day before the day in question, on the principal
national securities exchange on which the Common Stock is
listed or admitted to trading or, if not listed or admitted to
trading on any national securities exchange, the closing sale
price of Common Stock, or in case no reported sale takes
place, the average of the daily closing bid and asked
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prices, for ten consecutive trading days ending the last
trading day before the day in question, on the Nasdaq SmallCap
Market ("NASDAQ"), or if Common Stock is not quoted on NASDAQ,
the OTC Electronic Bulletin Board or any comparable system,
the closing sale price or, in case no reported sale takes
place, the average of the closing bid and asked prices, as
furnished by any two members of the National Association of
Securities Dealers, Inc. selected from time to time by the
Corporation for that purpose. If Common Stock is not quoted on
NASDAQ, the OTC Electronic Bulletin Board or any comparable
system, the Board of Directors shall in good faith determine
the current market price on such reasonable basis as it
reasonably considers appropriate.
(f) If any of the following shall occur: (i) any
reclassification, stock split or change of outstanding shares
of Common Stock issuable upon conversion of shares of
Preferred Stock (other than a change in par value, or from par
value to no par value, or from no par value to par value, or
as a result of a subdivision or combination), or (ii) any
consolidation or merger to which the Corporation is a party
other than a merger in which the Corporation is the continuing
corporation and which does not result in any reclassification
or stock split of, or change (other than a change in name, or
par value, or from par value to no par value, or from no par
value to par value, or as a result of a subdivision or
combination) in, outstanding shares of Common Stock, then in
addition to all of the rights granted to the holders of
Preferred Stock as designated herein, the Corporation, or such
successor or purchasing corporation, as the case may be,
shall, as a condition precedent to such reclassification,
stock split, change, consolidation or merger, provide in its
certificate of incorporation or other charter document that
each share of Preferred Stock shall have rights which shall be
as nearly equivalent as may be practicable to the rights
provided for in this Section 7. If, in the case of any such
reclassification, stock split, change, consolidation or
merger, the stock or other securities and property (including
cash) receivable thereupon by a holder of Common Stock
includes shares of capital stock or other securities and
property of a corporation other than the successor purchasing
corporation, as the case may be, in such reclassification,
stock split, change, consolidation or merger, then the
certificate of incorporation or other charter document of such
other corporation shall contain such additional provisions to
protect the interests of the holders of shares of the
Preferred Stock as the Board of Directors shall reasonably
consider necessary by reason of the foregoing. The provision
of this Section 7(f) shall similarly apply to successive
consolidations, mergers, sales or conveyances.
(g) The Corporation will not, by amendment of its
Certificate of Incorporation, as amended, or through any
reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other
voluntary action, avoid the
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observance or performance of any of the terms to be observed
or performed hereunder by the Corporation, but will at all
times in good faith assist in the carrying out of all the
provisions of this Section 7 and in the taking of all such
action as may be necessary or appropriate in order to protect
the conversion rights of the holders of the Preferred Stock
against impairment.
8. NOTICES OF RECORD DATE. In the event of any taking
by the Corporation of a record of the holders of any class of
securities for the purpose of determining the holders thereof
who are entitled to receive any dividend or other
distribution, any right to subscribe for, purchase or
otherwise acquire any shares of stock of any class or any
other securities or property, or to receive any other right,
the Corporation shall mail to each holder of Preferred Stock,
at least twenty (20) days prior to the date specified therein,
a notice specifying the date on which any such record is to be
taken for the purpose of such dividend, distribution or right,
and the amount and character of such dividend, distribution or
right.
9. RESTRICTION OF TRANSFERABILITY. The shares of
Preferred Stock may not be sold, assigned or transferred
except in accordance with the provisions of Sections 5 and 7.
10. OTHER. The Corporation and its affiliates may not
purchase shares of Preferred Stock except ratably from all
holders thereof.
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6. The Secretary of State is designated as agent of the
corporation upon whom process against it may be served. The post office address
to which the Secretary of State shall mail a copy of any process against the
corporation served upon him is:
The Corporation
218 Rockaway Turnpike, Suite 707
Cedarhurst, New York 11516
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