ex4_1.htm


    DCAP GROUP, INC.

    
 

    
      
        
          
            	
                    Certificate
      of Designations of Preferred Stock Authorized by Resolution of the Board
      of Directors Providing for an Issue of 1,300 Shares of Preferred Stock
      Designated “Series E Preferred
Stock.”

                  


          

        

      

       

    

    


    DCAP
Group, Inc. (the “Corporation”), a corporation organized and existing under the
General Corporation Law of the State of Delaware, in accordance with the
provisions of Section 151 of Title 8 thereof and Article FOURTH of the
Corporation’s Certificate of Incorporation, DOES HEREBY CERTIFY
THAT:

    


    Pursuant
to authority conferred upon the Board of Directors by the Certificate of
Incorporation of the Corporation, said Board of Directors, at a meeting duly
held, adopted a resolution providing for the issuance of one thousand three
hundred (1,300) shares of the Corporation’s Preferred Stock, par value $.01 per
share, designated “Series E Preferred Stock,” which resolution is as
follows:

    


    RESOLVED, that, pursuant to
the authority vested in the Board of Directors of the Corporation by the
Certificate of Incorporation, the Board of Directors, through its Insurance and
Finance Committee, does hereby provide for and authorize the issuance of one
thousand three hundred (1,300) shares of the Preferred Stock, par value $.01 per
share, of the Corporation, to be designated “Series E Preferred Stock” of the
presently authorized but unissued shares of Preferred Stock.  The
voting powers, designations, preferences, and relative, participating, optional
or other special rights of the Series E Preferred Stock authorized hereunder and
the qualifications, limitations and restrictions of such preferences and rights
are as follows:

    


    (i)           Dividends.

    


    (a)           Dividend
Preference.  From and after the date hereof, when and if the
Board of Directors of the Corporation declares a dividend or distribution
payable with respect to (i) the Common Stock or
any other capital stock or security issued by the Corporation which is junior to
the Series E Preferred Stock as to such dividends
or distributions, such dividend or distribution shall not be paid until payment
is made to the holders of the Series E Preferred Stock of all dividends or distributions accumulated or accrued through
that date, or (ii) the then outstanding capital
stock of the Corporation that is pari passu to the Series E Preferred Stock as to such dividends or distributions, such dividends or
distributions shall not be paid unless an equivalent payment is made to the
holders of the Series E Preferred Stock, pro rata, on the
accumulated and unpaid dividends or distributions payable to the Series E Preferred Stock as of the date of such
payment.

    


    (b)           Dividend Amount and
Payment.  Holders of the Series E Preferred Stock shall be entitled to receive, when,
as and if declared by the Board of Directors, out of funds legally available for
that purpose, with respect to each share of Series E Preferred Stock, a cash
dividend equal to eleven and one-half percent (11.5%) of the Original Issue
Price (as hereinafter defined), per annum. Such dividend shall be
cumulative, shall accrue from the date hereof and shall be payable quarterly on
each January 15, April 15, July 15 and October 15 for the preceding calendar
quarter.  For purposes hereof, the term “Original Issue Price” shall
mean one thousand dollars ($1,000.00).

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (ii)           Voting
Rights.  Except as required by applicable law, the holders of
the Series E Preferred Stock shall not be entitled to vote on any matters
required to be or otherwise submitted to a vote of stockholders of the
Corporation.

    


    (iii)           Redemption.

    


    (a)           Subject
to the requirements of applicable law, on July 31, 2011 (the “Outside Redemption
Date”), if any shares of the Series
E Preferred Stock shall be then outstanding, the Corporation
shall redeem, for cash, all outstanding shares of the Series E
Preferred Stock, at a redemption price per share equal to the
Original Issue Price, together with any accumulated and unpaid dividends thereon to the
Outside Redemption Date (the “Redemption Price”).

    


    (b)           In the event the Corporation redeems shares of Series E Preferred Stock pursuant to paragraph (a)
above, notice of such redemption (the “Redemption
Notice”) shall be given by first class mail, postage prepaid, mailed not less
than ten (10) days nor more than twenty (20) days prior to the Outside
Redemption Date, to each holder of record of the shares of Series
E Preferred Stock to be redeemed at such holder’s address as the
same appears on the stock register of the Corporation.  The Redemption
Notice shall state:  (i) the Outside
Redemption Date; (ii) the number of shares of Series E Preferred Stock to be redeemed; (iii) the place or places where certificates for such
shares are to be surrendered for payment of the Redemption Price; and (iv) that dividends on the shares to be redeemed will
cease to accrue on the Outside Redemption Date.

    


    (c)           In
the event the Corporation shall consummate a “Rule 13e-3 transaction” (as such
term is defined in Rule 13e-3 promulgated by the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as amended), the
Corporation shall give written notice thereof (the “Going Private Notice”) to
the holders of the Series E Preferred Stock.  Each holder of Series E
Preferred Stock thereupon shall have the right, exercisable by written notice
(the “Redemption Exercise Notice”) given to the Corporation within thirty (30)
days of receipt of the Going Private Notice, to cause the Corporation, subject
to the requirements of applicable law, to redeem, for cash, all or any portion
of such holder’s Series E Preferred Stock at the Redemption
Price.  The Redemption Exercise Notice shall provide for the number of
shares of Series E Preferred Stock that the holder desires that the Corporation
redeem and a date (no less than thirty (30) days nor more than sixty (60) days
following the date thereof (together with the Outside Redemption Date, the
“Redemption Date”)) upon which, subject to the requirements of applicable law,
the Corporation shall redeem, for cash, such number of shares of Series E
Preferred Stock as is set forth in the holder’s Redemption Exercise
Notice.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (d)           In the case of any redemption pursuant to paragraph
(a) or (c) above, as to which any required notice
from the Corporation was properly mailed as provided in paragraph (b) or (c)  above, from and after the
Redemption Date (unless default shall be made by the Corporation in paying the
Redemption Price of the shares called for redemption), dividends on the shares
of Series E Preferred Stock so called for
redemption shall cease to accrue, and all rights of the holders thereof as
stockholders of the Corporation (except the right to receive from the
Corporation the Redemption Price per share) shall cease.  Upon
surrender in accordance with said notice of the certificates for any shares so
redeemed (properly endorsed or assigned for transfer, if the Board of Directors
shall so require and the notice shall so state), such shares shall be redeemed
by the Corporation at the Redemption Price.

    


    
      	
               
      

            	
              (iv)

            	
              Conversion.

            


    

    


    (a)           Conversion
Right.  Each share of Series E Preferred Stock shall be
convertible, at any time and from time to time, at the option of the holder
thereof, into such number of shares of Common Stock of the Corporation as is
determined by dividing the Original Issue Price by the Conversion Price (as
hereinafter defined).  For purposes hereof, the term “Conversion
Price” shall mean two dollars cents ($2.00), subject to adjustment as
hereinafter set forth.

    


    Before
any holder of Series E Preferred Stock shall be entitled to receive Common Stock
upon conversion, the holder shall send a notice of conversion with respect
thereto (the “Conversion Notice”) and shall surrender the certificate(s)
therefor, duly endorsed, at the principal offices of the
Corporation.  Effective upon the Corporation’s receipt of the
Conversion Notice (the “Effective Conversion Date”), the holder shall thereupon
be deemed to be the holder of record of the Common Stock issuable upon
conversion, notwithstanding that the stock transfer books of the Corporation
shall then be closed or that the certificate(s) representing such Common Stock
shall not then be actually delivered to the holder.  Subject to the
provisions hereof, promptly following the Effective Conversion Date, the
Corporation shall issue or cause its transfer agent to issue and deliver to such
holder of Series E Preferred Stock a certificate for the number of shares of
Common Stock to which the holder shall be entitled.

    


                                                   
(b)           Adjustment
of Conversion Price.

    


    (I)           Adjustments
for Stock Dividends; Combinations, Etc.  In the event that the
Corporation shall (A) declare a dividend or other distribution on its Common
Stock payable in Common Stock of the Corporation;  (B) effect a
subdivision of its outstanding Common Stock into a greater number of shares of
Common Stock (by reclassification, stock split or otherwise than by payment of a
dividend in shares of Common Stock); (C) effect a combination of its outstanding
Common Stock into a lesser number of shares of Common Stock (by
reclassification, reverse split or otherwise); (D) issue by reclassification,
exchange or substitution of its Common Stock any shares of capital stock of the
Corporation; or (E) effect any other transaction having a like effect, the
Conversion Price in effect immediately prior to such action shall be adjusted so
that, in the event of a conversion at any time after the occurrence of any event
described in (A) through (E) above, the holder shall be entitled to receive the
shares of Common Stock to which such holder would have been finally entitled,
after giving effect to the occurrence of such event, as if the Series E
Preferred Stock had been converted into Common Stock immediately prior to the
occurrence of such event.  An adjustment made pursuant to this
paragraph (b)(I) shall become effective immediately after the record date in the
case of a dividend or other distribution and shall become effective immediately
upon the effective date in the case of a subdivision, combination,
reclassification, exchange or substitution.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (II)           Adjustment
for Consolidation or Merger.  In case of any consolidation or
merger to which the Corporation is a party, other than a merger or consolidation
in which the Corporation is the surviving or continuing corporation and which
does not result in any reclassification of, or change (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) in, outstanding Common Stock,
then in the event of a conversion, the holder of each share of Series E
Preferred Stock then outstanding shall receive, in exchange for such shares of
Series E Preferred Stock, the kind and amount of shares or other securities and
property receivable upon such consolidation or merger by a holder of the number
of shares of Common Stock into which such Series E Preferred Stock would have
been converted immediately prior to such consolidation or merger had the
conversion occurred.

    


    (c)           Fractional
Shares.  No fractional shares of Common Stock shall be issued
upon conversion of Series E Preferred Stock.  In lieu of any
fractional shares to which the holder would otherwise be entitled, the
Corporation shall pay, in cash, an amount equal to the product of (i) such
fraction of a share times (ii) the Current Market Price Per Share (as
hereinafter defined) on the Effective Conversion Date.  As used
herein, the term “Current Market Price Per Share” shall mean the closing price,
or, if not available, the closing bid price, of the Common Stock as quoted on a
national securities exchange, including The Nasdaq Stock Market (“Nasdaq”), or
the OTC Bulletin Board (the “Bulletin Board”), as the case may be (or, if there
is no closing price or closing bid price on a particular day, then the closing
price or, if not available, the closing bid price on the nearest trading date
before that day and for which such prices are available), and if the Common
Stock is not listed on such an exchange, including Nasdaq, or the Bulletin Board
on such particular day, then the Current Market Price Per Share shall be
determined by the Board of Directors in good faith by taking into consideration
all relevant factors.

    


    (d)           Reservation
of Shares Issuable Upon Conversion. The Corporation shall at all times
reserve and keep available out of its authorized but unissued Common Stock,
solely for the purpose of effecting the conversion of the Series E Preferred
Stock, such number of its shares of Common Stock as shall from time to time be
sufficient to effect the conversion of all outstanding Series E Preferred Stock;
provided, however, that nothing contained herein shall preclude the Corporation
from satisfying its obligations in respect of the conversion of the Series E
Preferred Stock by delivery of Common Stock which is held in the treasury of the
Corporation.

    


    (e)           Lost,
Stolen or Destroyed Certificates.  In the event that the holder
notifies the Corporation that the certificate(s) representing Series E Preferred
Stock have been lost, stolen or destroyed and either (i) provides a letter, in
form satisfactory to the Corporation, to the effect that it will indemnify the
Corporation from any loss incurred by it in connection therewith, and/or (ii)
provides an indemnity bond in such amount as is reasonably required by the
Corporation, the Corporation having the option of electing either (i) or (ii) or
both, the Corporation shall accept such letter and/or indemnity bond in lieu of
the surrender of the certificate(s) as otherwise required by the provisions
hereof.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (f)           Certificate
as to Adjustments.  Whenever the number of shares of Common
Stock issuable, or the securities or other property deliverable, upon the
conversion of the Series E Preferred Stock shall be adjusted pursuant to the
provisions hereof, the Corporation shall give written notice thereof to each
holder of shares of Series E Preferred Stock at such holder’s address as it
appears on the transfer books of the Corporation and shall forthwith file, at
its principal executive office and with any transfer agent or agents for the
Series E Preferred Stock and the Common Stock, a certificate, signed by the
Chief Financial Officer of the Corporation, stating the number of shares of
Common Stock issuable, or the securities or other property deliverable, per
share of Series E Preferred Stock converted, calculated to the nearest cent or
to the nearest one one-hundredth of a share and setting forth in reasonable
detail the method of calculation and the facts requiring such adjustment and
upon which such calculation is based. Each adjustment shall remain in effect
until a subsequent adjustment hereunder is required.

    


    (g)           No
Conversion Charge or Tax. The issuance and delivery of certificates
representing shares of Common Stock upon the conversion of shares of Series E
Preferred Stock shall be made without charge to the holder of shares of Series E
Preferred Stock for any issue tax, or other incidental expense in respect of the
issuance or delivery of such certificates or the securities represented thereby,
all of which taxes and expenses shall be paid by the Corporation.

    


    (h)           Status on
Conversion.  Upon any conversion of shares of the Series E
Preferred Stock, the shares so converted shall be canceled.

    


    (i)           Statutory
Restrictions.  The foregoing provisions for conversion of the
Series E Preferred Stock shall be subject to all applicable statutory
limitations and restrictions.

    


    (v)           Liquidation
Preference.  In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, the holders of Series
E Preferred Stock will be entitled to receive, prior and in preference to any
distribution of the assets or surplus funds of the Corporation to the holders of
any Common Stock and any other stock of the Corporation ranking in liquidation
junior to the Series E Preferred Stock, by reason of the ownership thereof, an
amount (the “Series E Preferential Amount”) equal to (A) the Original Issue
Price and no more, and (B) all accumulated and unpaid dividends
thereon.  If, upon the occurrence of such an event, the assets and
funds thus distributable among the holders of Series E Preferred Stock shall be
insufficient to permit the payment to such holders of the full Series E
Preferential Amount, then the entire assets and funds of the Corporation legally
available for distribution to the holders of the Series E Preferred Stock shall
be distributed ratably among such holders in accordance with the respective
amounts which would be payable on such shares if all amounts payable thereon
were paid in full.  After the payment or setting apart of the full
Series E Preferential Amount required to be paid to the holders of Series E
Preferred Stock, the holders of Common Stock and any other stock of the
Corporation ranking in liquidation junior to the Series E Preferred Stock shall
be entitled to receive ratably all remaining assets or surplus funds of the
Corporation.  Neither the merger or consolidation of the Corporation,
nor the sale, lease or conveyance of all or part of its assets, shall be deemed
to be a liquidation, dissolution or winding up of the affairs of the
Corporation, either voluntarily or involuntarily, within the meaning of this
section.

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (vi)           Seniority.  For
so long as any shares of Series E Preferred Stock are issued and outstanding,
the Corporation shall not, without the written consent of the holders of a
majority of the then outstanding shares of Series E Preferred Stock, issue any
series of preferred stock that ranks senior to the Series E Preferred Stock with
respect to dividend rights or on liquidation, dissolution or winding up of the
Corporation.

    


    


    IN WITNESS WHEREOF, DCAP GROUP, INC. has caused
this Certificate to be executed by its Chief Executive Officer this 12th day of
May, 2009.

    


    
      
        	 	      
                DCAP
      GROUP, INC.

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Barry
      Goldstein	 
	 	 	Barry
      Goldstein, Chief Executive Officer