PARAMARK ENTERPRISES, INC.
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND
RIGHTS OF CLASS B PREFERRED STOCK
PURSUANT TO SECTION 151(g) OF
THE DELAWARE GENERAL CORPORATION LAW
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Paramark Enterprises, Inc. (the "Corporation"), a corporation organized
and existing under the General Corporation Law of the State of Delaware hereby
certifies that pursuant to the authority conferred upon the Board of Directors
by Section 151(g) of the Delaware General Corporation Law and Section (b) of
Article Fourth of the Restated Certificate of Incorporation of Paramark
Enterprises, Inc. at a meeting duly held on November __, 1997 adopted the
following resolution providing for the issuance of up to 20,000 shares of Series
B Preferred Stock:
RESOLVED, that the Board of Directors of Paramark Enterprises, Inc.
hereby adopts the following designation for its Series B Preferred Stock
pursuant to Section 151(g) of the Delaware General Corporation Law and Section
(b) of Article Fourth of the Restated Certificate of Incorporation of Paramark
Enterprises, Inc.:
l. Designation and Number of Shares. The series of Preferred Stock
shall be designated as "Series B Convertible Preferred Stock" (hereinafter
called "Series B Preferred") and shall consist of a total of 20,000 shares with
a par value of .01 per share.
2. Dividends. The holders of the Series B Preferred shall be entitled
to receive, when and as declared by the Board of Directors, out of any assets
legally available therefor, non-cumulative dividends at the rate of 8% per
annum, payable quarterly or annually on such date or dates as the Board of
Directors may determine, before any dividend shall be set apart or paid on the
Common Stock for that year.
3. Liquidation.
(a) In the event of the liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, after all creditors of the
Corporation shall have been paid in full, the holders of the outstanding Series
B Preferred shall be entitled to receive an amount equal to $5.00 per share (as
adjusted for any stock dividends, combinations or splits with respect to such
shares) plus all accrued and unpaid dividends thereon (whether or not such
dividends shall have been declared and whether or not there shall be any funds
legally available for the payment of dividends), without interest, and no more,
to the date fixed for payment of such distributive amount before any
distribution of assets shall be made to the holders of any Common Stock or any
equity securities ranking junior to the Series B Preferred as to liquidation.
If, upon any dissolution, liquidation or winding up of the Corporation, the net
assets of the Corporation shall be insufficient to pay the holders of all
outstanding shares of Series B Preferred the full amounts to which they
respectively shall be entitled, the holders of each such stock shall share
ratably in any distribution of assets
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according to the respective amounts which would be payable in respect of such
stock upon such distribution if all amounts payable on or with respect to all
stock were paid in full.
(b) Holders of the Series B Preferred shall not be entitled, upon the
liquidation, dissolution or winding up of the Corporation, to receive any
amounts with respect to such stock other than the amounts referred to in this
paragraph 3. Nothing contained herein shall be deemed to prevent the conversion
of the Series B Preferred pursuant to paragraph 4 herein prior to liquidation,
dissolution or winding up.
4. Conversion. The holders of the Series B Preferred shall have
conversion rights as follows:
(a) Right to Convert. Each share of Series B Preferred shall be
convertible, at the option of the holder thereof, at any time after the date of
issuance of such share, at the office of the Corporation, into such number of
fully paid and nonassessable shares of Common Stock of the Corporation (the
"Common Stock") as is determined by dividing $5.00 by the Conversion Price,
determined as hereinafter provided, in effect at the time of the conversion. The
price at which shares of Common Stock shall be deliverable upon conversion of
the Series B Preferred (the "Series B Conversion Price") shall initially be
$1.00. Such initial conversion price shall be adjusted in the event of any stock
split, stock dividend, recapitalization of Common Stock or other subdivision or
combination of Common Stock.
(b) Mechanics of Conversion. No fractional shares of Common Stock shall
be issued upon conversion of the Series B Preferred. In lieu of any fractional
shares to which the holder would otherwise be entitled, the Corporation shall
pay cash equal to such fraction multiplied by the then effective Conversion
Price. Before any holder of Series B Preferred shall be entitled to convert the
same into full shares of Common Stock and to receive certificates therefor, such
holder shall surrender the certificate or certificates therefor, duly endorsed,
at the office of the Corporation or of any transfer agent for the Series B
Preferred, and shall give written notice to the Corporation at such office that
such holder elects to convert the same; provided, however, that the Corporation
shall not be obligated to issue certificates evidencing the shares of Common
Stock issuable upon such conversion unless the certificates evidencing such
shares of Series B Preferred are either delivered to the Corporation or its
transfer agent as provided above, or the holder notifies the Corporation or its
transfer agent that such certificates have been lost, stolen or destroyed and
executes an agreement satisfactory to the Corporation to indemnify it from any
loss incurred by it in connection with such certificates. The Corporation shall,
as soon as practicable after such delivery, or such agreement and
indemnification in the case of a lost certificate, issue and deliver at such
office to such holder of Series B Preferred, a certificate or certificates for
the number of shares of Common Stock to which such holder 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 Series B
Preferred to be converted.
(c) Reservation of Common Stock Issuable Upon Conversion. The
Corporation shall at all times reserve and keep available out of its authorized
but unissued shares of Common Stock,
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solely for the purpose of effecting the conversion of the shares of the Series B
Preferred, 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 the Series B
Preferred; and if at any time the number of authorized but unissued shares of
Common Stock shall not be sufficient to effect the conversion of all then
outstanding shares of the Series B Preferred, the Corporation will take such
corporate action as may, in the opinion of its counsel, be necessary to increase
its authorized but unissued shares of Common Stock to such number of shares as
shall be sufficient for such purpose, including, without limitation, engaging in
best efforts to obtain the requisite stockholder approval of any necessary
amendment to the Articles of Incorporation of the Corporation.
5. Voting Rights.
Each holder of shares of the Series B Preferred shall be entitled to
the number of votes equal to the number of shares of Common Stock into which
such shares of Series B Preferred could be converted and shall have voting
rights and powers equal to the voting rights and powers of the Common Stock
(except as otherwise expressly provided herein or as required by law, voting
together with the Common Stock as a single class).
6. Redemption.
(a) The Corporation may redeem, at its option and at any time after
December 16, 1997 and prior to December 31, 1998, any or all of the shares of
the Series B Preferred then outstanding.
(b) The per share redemption price at which shares of Series B
Preferred are to be redeemed shall be $5.00 per share.
(c) In the event that the Corporation shall determine to redeem less
than all of the outstanding shares of Series B Preferred, the method by which
the shares of Series B Preferred are to be redeemed may be by lot, pro rata or
any other means which the Board of Directors shall determine to be equitable,
and the Certificate of the Secretary of the Corporation filed with the
Corporation or the transfer agent for the Series B Preferred to be redeemed
setting forth the determination of the Board of Directors shall be conclusive as
to the shares redeemed and the method by which they were determined.
(d) Notice of any proposed redemption of Series B Preferred shall be
given by the Corporation by first class mail, postage prepaid, at least ten (10)
days and not more than sixty (60) days prior to the date fixed for such
redemption, to the holders of record of the shares of Series B Preferred to be
redeemed at their respective addresses appearing on the books of the
Corporation.
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IN WITNESS WHEREOF, said ________________ has caused this Certificate
to be signed by Charles Loccisano, its Chairman and Chief Executive Officer,
this _________ day of ________, 1997.
Attest: PARAMARK ENTERPRISES, INC.
_____________________ By: _____________________________________
_____________, Secretary Charles Loccisano
Chairman and Chief Executive Officer
[SEAL]
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