CERTIFICATE OF DESIGNATIONS,
                     PREFERENCES, RIGHTS AND LIMITATIONS OF
                     SERIES C CONVERTIBLE PREFERRED STOCK OF
                             NATIONAL LAMPOON, INC.

      Pursuant to Section 151 of the General Corporation Law of the State of
Delaware NATIONAL LAMPOON, INC., a corporation organized and existing under the
General Corporation Law of the state of Delaware (the "Corporation"), DOES
HEREBY CERTIFY:

      That, pursuant to the authority expressly vested in the Board of Directors
by Article 5 of the Certificate of Incorporation of the Corporation (as amended
from time to time, the "CERTIFICATE OF Incorporation"), and pursuant to the
provisions of Section 151 of the General Corporation Law of the State of
Delaware, the Board of Directors duly adopted a resolution providing for the
issuance of up to Two Hundred Fifty Thousand (250,000) shares of Series C
Convertible Preferred Stock, which resolution is as follows:

            RESOLVED by the Board of Directors of National Lampoon, Inc., a
      Delaware corporation (the "CORPORATION"), that one (1) series of the class
      of authorized Preferred Stock, $0.0001 par value per share, of the
      Corporation (the "PREFERRED STOCK") to be designated the Series C
      Convertible Preferred Stock (the "SERIES C PREFERRED") is hereby created,
      and that the designations and amounts thereof and the voting powers,
      preferences and relative, participating optional and other special rights
      of the shares of such series, and the qualifications, limitations and
      restrictions thereof are as follows:

      NUMBER OF SERIES AUTHORIZED SHARES: Series C Convertible Preferred Stock
      250,000

            Section 1. NUMBER OF SHARES. The number of shares constituting the
      Series C Preferred shall be as set forth above. Such number of shares may
      be increased or decreased by resolution of the Board of Directors;
      provided, that no decrease shall reduce the number of shares of Series C
      Preferred to a number less than the number of shares then outstanding plus
      the number of shares reserved for issuance upon the exercise of any
      outstanding options, rights or warrants, or upon the conversion of any
      outstanding securities or rights issued by the Corporation convertible
      into the Series C Preferred; provided further that no increase shall be
      effective unless the Corporation obtains the prior written consent of the
      holders of at least seventy-five percent (75%) of the outstanding Series C
      Preferred.

            Section 2. RANKING. As to the payment of dividends and distributions
      on liquidation and as to redemptions, the Series C Preferred ranks senior
      to all other Junior Securities of the Corporation.

            Section 3. VOTING

            Section 3.01. VOTING GENERALLY. Except as may be otherwise provided
      in this Certificate of Designations or as otherwise required by applicable
      law, the Series C Preferred shall vote together with the Common Stock (and
      such other series of Preferred Stock which by their terms likewise vote
      together with the Common Stock) as a single class on all actions to be
      taken by the stockholders of the Corporation. The holders of Series C
      Preferred shall be entitled to notice of all stockholders meetings in
      accordance with the Corporation's Bylaws. Each share of Series C Preferred
      shall entitle the holder thereof to one vote per share on each such action
      for each whole share of Common Stock into which such share of Series C
      Preferred is then convertible as of the record date for such vote or, if
      no record date is specified, as of the date of such vote.


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<PAGE>

            Section 3.02. ELECTION OF DIRECTORS. For so long as at least 100,000
      shares of Series C Preferred are issued and outstanding (as equitably
      adjusted for any stock splits, stock dividends, recapitalizations, reverse
      stock splits or otherwise to prevent an enlargement or diminution of
      rights), in the election of directors of the Corporation, the holders of
      the Series C Preferred, voting separately as a single class to the
      exclusion of all other classes of the Corporation's capital stock and with
      each share of Series C Preferred entitled to one vote, shall be entitled
      to elect one (1) director to serve on the Corporation's Board of Directors
      until his/her successor is duly elected by the holders of the Series C
      Preferred or he/she is removed from office by the holders of the Series C
      Preferred. If the holders of the Series C Preferred for any reason fail to
      elect anyone to fill any such directorship, such position shall remain
      vacant until such time as the holders of the Series C Preferred elect a
      director to fill such position and shall not be filled by resolution or
      vote of the Corporation's Board of Directors or the Corporation's other
      stockholders.

            Section 3.03. OTHER VOTING RIGHTS. Notwithstanding the foregoing, so
      long as any Series C Preferred remains outstanding, without the
      affirmative vote or prior written consent of the holders of at least a
      majority of the outstanding Series C Preferred, the Corporation shall not:

            (a) directly or indirectly declare or pay any dividends or make any
      distributions upon any of its Common Stock; and

            (b) directly or indirectly redeem, purchase or otherwise acquire any
      of the Corporation's Junior Securities or directly or indirectly redeem,
      purchase or make any payments with respect to any stock appreciation
      rights, phantom stock plans or similar rights or plans; except for
      repurchases of Common Stock from employees and other service providers of
      the Corporation upon termination of employment or other services pursuant
      to equity incentive agreements or other agreements providing for a right
      of repurchase by the Corporation as approved by the unanimous consent of
      the Board.

            Section 4. DIVIDENDS. The Corporation shall have the right to issue
      dividends and make distributions, whether cash, securities or otherwise,
      whether or not any shares of the Series C Preferred Stock are outstanding;
      provided, however, that the Corporation shall not issue any dividends
      (other than dividends payable solely in Common Stock) or make any
      distributions of cash or other assets until after the Payment Satisfaction
      Date. To the extent dividends are declared and issued by the Corporation
      prior to the earlier of (i) the Redemption Date, (ii) the date of a
      Liquidation Event or (iii) the date on which the Series C Preferred Stock
      is converted hereunder, the Corporation shall pay preferential dividends,
      payable in the Corporation's Common Stock, to the holders of the Series C
      Preferred Stock as provided in this Section 4. Dividends on each share of
      the Series C Preferred Stock shall accrue on a daily basis, whether or not
      declared, beginning with the date of issuance of such share of Series C
      Preferred and continuing until the earlier of (i) the Redemption Date,
      (ii) the date of a Liquidation Event, or (iii) the date on which such
      share of Series C Preferred Stock is converted hereunder, at the rate of
      9.0% per annum on the sum of (i) the Original Purchase Price (as equitably
      adjusted for any stock splits, stock dividends, recapitalizations, reverse
      stock splits or otherwise to prevent an enlargement or diminution of
      rights), plus (ii) all accumulated and unpaid dividends thereon
      (compounding annually). All accrued and unpaid dividends on each share of
      Series C Preferred Stock shall be fully paid (pro rata and pari passu with
      any class or series of preferred securities of the Corporation entitled to
      participate pro rata and pari passu as to dividends with the Series C
      Preferred Stock) before any dividends or distributions may be issued with
      respect to any Junior Securities. If a share of Series C Preferred Stock
      is converted, then upon such conversion any accumulated and unpaid
      dividends on such share of Series C Preferred Stock shall be paid in the
      form of Common Stock at a price per share equal to the Conversion Price.
      Except as otherwise provided herein, if at any time the Corporation pays
      less than the total amount of dividends then accrued with respect to the
      Series C Preferred Stock and each Parity Series, such payment shall be
      distributed ratably among the holders thereof based upon the aggregate
      accrued but unpaid dividends on the Series C Preferred Stock and all
      Parity Series.


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            Section 5. LIQUIDATION.

            Section 5.01. LIQUIDATION PREFERENCE. Upon the occurrence of any
      Liquidation Event, each holder of Series C Preferred shall be entitled to
      be paid, before any distribution or payment is made upon any Junior
      Securities (including, without limitation, the Series B Convertible
      Preferred Stock), an amount in cash equal to the aggregate Liquidation
      Value of all shares of Series C Preferred held by such holder (plus all
      unpaid dividends thereon, if any). In addition to and after payment in
      full of all other amounts payable to the holders of the Series C Preferred
      under this Section 5 and the subsequent payment of all priority amounts
      due to the holders of any other class of preferred stock of the
      Corporation outstanding, upon the occurrence of any Liquidation Event, the
      assets of the Corporation legally available for distribution, if any,
      shall be distributed ratably to the holders of the Common Stock, the
      holders of Series C Preferred and the holders of such other series of
      Preferred Stock as are constituted as similarly participating (including
      the Series B Convertible Preferred Stock), with all holders of Series C
      Preferred treated (for purposes of this determination) as if they had
      converted all of their shares of Series C Preferred into Common Stock in
      accordance with Section 7.

            Section 5.02. INSUFFICIENCY OF ASSETS. If upon the occurrence of any
      such Liquidation Event, the Corporation's assets to be distributed among
      the holders of the Series C Preferred are insufficient to permit payment
      to such holders of the aggregate amount which they are entitled to be paid
      under this Section 5, then the entire assets available to be distributed
      to the Corporation's stockholders shall be distributed pro rata among such
      holders based upon the aggregate Liquidation Value (plus all unpaid
      dividends thereon, if any) of the Series C Preferred held by each such
      holder.


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<PAGE>

            Section 5.03. NOTICE OF LIQUIDATION. Not less than thirty (30) days
      prior to the payment date stated therein, the Corporation shall mail
      written notice of any such Liquidation Event to each record holder of
      Series C Preferred, setting forth in reasonable detail the amount of
      proceeds to be paid with respect to each share of Series C Preferred and
      each share of Common Stock in connection with such Liquidation Event.

            Section 6. CONVERSION.

            Section 6.01. CONVERSION PROCEDURE.

            (a) At any time and from time to time, any holder of Series C
      Preferred may convert all or any portion of the Series C Preferred held by
      such holder into a number of shares of Conversion Stock computed by
      multiplying the number of shares of Series C Preferred to be converted
      times ten, with such conversion ratio to be adjusted as provided herein.

            (b) Except as otherwise provided herein, each conversion of Series C
      Preferred shall be deemed to have been effected as of the close of
      business on the date on which the certificate or certificates representing
      the Series C Preferred to be converted have been surrendered for
      conversion at the principal office of the Corporation. At the time any
      such conversion has been effected, the rights of the holder of the shares
      of Series C Preferred converted as a holder of Series C Preferred shall
      cease and the Person or Persons in whose name or names any certificate or
      certificates for shares of Conversion Stock are to be issued upon such
      conversion shall be deemed to have become the holder or holders of record
      of the shares of Conversion Stock represented thereby.

            (c).Notwithstanding any other provision hereof, if a conversion of
      Series C Preferred is to be made in connection with a Change in Ownership,
      a Fundamental Change or other transaction affecting the Corporation, the
      conversion of any shares of Series C Preferred may, at the election of the
      holder thereof, be conditioned upon the consummation of such transaction,
      in which case such conversion shall not be deemed to be effective until
      such transaction has been consummated.

            (d) As soon as possible after a conversion has been effected, the
      Corporation shall deliver to the converting holder:

                  (i) a certificate or certificates representing the number of
            shares of Conversion Stock issuable by reason of such conversion in
            such name or names and such denomination or denominations as the
            converting holder has specified; and


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<PAGE>

                  (ii) a certificate representing any shares of Series C
            Preferred which were represented by the certificate or certificates
            delivered to the Corporation in connection with such conversion but
            which were not converted.

            (e) The issuance of certificates for shares of Conversion Stock upon
      conversion of Series C Preferred shall be made without charge to the
      holders of such Series C Preferred for any issuance tax in respect thereof
      or other cost incurred by the Corporation in connection with such
      conversion and the related issuance of shares of Conversion Stock.

            (f) The Corporation shall not close its books against the transfer
      of Series C Preferred or of Conversion Stock issued or issuable upon
      conversion of Series C Preferred in any manner which interferes with the
      timely conversion of Series C Preferred. The Corporation shall assist and
      cooperate with any holder of shares of Series C Preferred required to make
      any governmental filings or obtain any governmental approval prior to or
      in connection with any conversion of shares of Series C Preferred
      hereunder (including, without limitation, making any filings required to
      be made by the Corporation).

            (g) The Corporation shall at all times reserve and keep available
      out of its authorized but unissued shares of Conversion Stock, solely for
      the purpose of issuance upon the conversion of the Series C Preferred,
      such number of shares of Conversion Stock issuable upon the conversion of
      all outstanding Series C Preferred. All shares of Conversion Stock which
      are so issuable shall, when issued, be duly and validly issued, fully paid
      and nonassessable and free from all taxes, liens and charges.

            (h) If any fractional interest in a share of Conversion Stock would,
      except for the provisions of this subparagraph, be delivered upon any
      conversion of the Series C Preferred, the Corporation, in lieu of
      delivering the fractional share therefore, shall pay an amount to the
      holder thereof equal to the Market Price of such fractional interest as of
      the date of conversion.

            Section 6.02. Subdivision or Combination of Common Stock. If the
      Corporation at any time 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 number of
      shares of Conversion Stock into which each Series C Preferred Share can be
      converted shall be increased ratably, and if the Corporation at any time
      combines (by reverse stock split or otherwise) one or more classes of its
      outstanding shares of Common Stock into a smaller number of shares, the
      number of shares of Conversion Stock into which each Series C Preferred
      Share can be converted shall be decreased ratably.

      Section 7. REGISTRATION OF TRANSFER. The Corporation shall keep at its
      principal office a register for the registration of Series C Preferred.
      Upon the surrender of any certificate representing Series C Preferred at
      such place, the Corporation shall, at the request of the record holder of
      such certificate, execute and deliver (at the Corporation's expense) a new
      certificate or certificates in exchange therefore representing in the
      aggregate the number of shares of Series C Preferred represented by the
      surrendered certificate. Each such new certificate shall be registered in
      such name and shall represent such number of shares of Series C Preferred
      as is requested by the holder of the surrendered certificate and shall be
      substantially identical in form to the surrendered certificate.


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      Section 8. REPLACEMENT. Upon receipt of evidence reasonably satisfactory
      to the Corporation (an affidavit of the registered holder shall be
      satisfactory) of the ownership and the loss, theft, destruction or
      mutilation of any certificate evidencing shares of Series C Preferred, 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 shall be satisfactory), or, in the case of any such mutilation
      upon surrender of such certificate, the Corporation shall (at its expense)
      execute and deliver in lieu of such certificate a new certificate of like
      kind representing the number of shares of Series C Preferred of such class
      represented by such lost, stolen, destroyed or mutilated certificate and
      dated the date of such lost, stolen, destroyed or mutilated certificate,
      and declared dividends shall accrue on the Series C Preferred represented
      by such new certificate from the date to which dividends have been fully
      paid on such lost, stolen, destroyed or mutilated certificate.

            Section 9. DEFINITIONS.

            "CHANGE IN OWNERSHIP" means any sale, transfer or issuance or series
      of sales, transfers or issuances of shares of the Corporation's capital
      stock by the Corporation or any holders thereof which results in any
      Person or group of Persons (as the term "GROUP" is used under the
      Securities Exchange Act of 1934), other than the holders of Common Stock,
      the Series B Convertible Preferred Stock and the Series C Preferred as of
      the Series C Closing Date, owning more than 50% of the Common Stock
      outstanding at the time of such sale, transfer or issuance or series of
      sales, transfers or issuances.

            "COMMON STOCK" means, collectively, the Corporation's Common Stock,
      par value of $0.0001 per share.

            "CONVERSION STOCK" means shares of the Corporation's Common Stock;
      provided that if there is a change such that the securities issuable upon
      conversion of the Series C Preferred are issued by an entity other than
      the Corporation or there is a change in the type or class of securities so
      issuable, then the term "CONVERSION STOCK" shall mean one share of the
      security issuable upon conversion of the Series C Preferred if such
      security is issuable in shares, or shall mean the smallest unit in which
      such security is issuable if such security is not issuable in shares.

            "CONVERTIBLE SECURITIES" means any stock or securities directly or
      indirectly convertible into or exchangeable for Common Stock.

            "FUNDAMENTAL CHANGE" means (a) any sale or transfer of more than 50%
      of the assets of the Corporation and its Subsidiaries on a consolidated
      basis (measured either by book value in accordance with generally accepted
      accounting principles consistently applied or by fair market value
      determined in the reasonable good faith judgment of the Corporation's
      Board of Directors) in any transaction or series of transactions (other
      than sales in the ordinary course of business) and (b) any merger or
      consolidation to which the Corporation is a party, except for a merger in
      which the Corporation is the surviving corporation, the terms of the
      Series C Preferred are not changed and the Series C Preferred is not
      exchanged for cash, securities or other property, and after giving effect
      to such merger, the holders of the Corporation's outstanding capital stock
      possessing a majority of the voting power (under ordinary circumstances)
      to elect a majority of the Corporation's Board of Directors immediately
      prior to the merger shall continue to own the Corporation's outstanding
      capital stock possessing the voting power (under ordinary circumstances)
      to elect a majority of the Corporation's Board of Directors.


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<PAGE>

            "JUNIOR SECURITIES" means any capital stock or other equity
      securities of the Corporation (including, without limitation, warrants,
      options and other rights to acquire such capital stock or other equity
      securities), except for the Series C Preferred and such other series or
      classes of securities which the holders of a majority of the Series C
      Preferred affirmatively approve to not be Junior Securities under this
      Certificate of Designations.

            "LIQUIDATION EVENT" means any of the following (i) the liquidation,
      dissolution or winding up of the Corporation (whether voluntary or
      involuntary), (ii) the sale, lease, transfer or other disposition of all
      or substantially all of the property or assets of the Corporation, (iii)
      any merger, consolidation or reorganization to which the Corporation is a
      party, except for a merger, consolidation or reorganization, which, after
      giving effect to such merger, consolidation or reorganization, the holders
      of the Corporation's outstanding capital stock (on a fully-diluted basis)
      immediately prior to the merger, consolidation or reorganization, own
      capital stock holding a majority of the voting power (under ordinary
      circumstances), and (iv) any sale or related series of sales of shares of
      the Corporation's capital stock by the Corporation which results in any
      Person or group of affiliated Persons (other than the owners of the
      Company's capital stock as of the Series C Closing Date) owning capital
      stock holding a majority of the voting power of the Company.

            "LIQUIDATION VALUE" of any share of Series C Preferred as of any
      particular date shall be equal to 1.5 times the Original Purchase Price
      (as equitably adjusted for any stock splits, stock dividends,
      recapitalizations, reverse stock splits, or otherwise to prevent an
      enlargement or diminution of rights).

            "MARKET PRICE" of any security means the average of the closing
      prices of such security's sales on all securities exchanges on which such
      security may at the time be listed, or, if there have been no sales on any
      such exchange on any day, the average of the highest bid and lowest asked
      prices on all such exchanges at the end of such day, or, if on any day
      such security is not so listed, the average of the representative bid and
      asked prices quoted in the NASDAQ System as of 4:00 P.M., New York time,
      or, if on any day such security is not quoted in the NASDAQ System, the
      average of the closing or last prices of such stock's sales each day
      (whether sales occurred each day or not) in the domestic over-the-counter
      market as reported by the National Quotation Bureau, Incorporated, or any
      similar successor organization, in each such case averaged over a period
      of 21 days consisting of the day as of which "Market Price" is being
      determined and the 20 consecutive business days prior to such day. If at
      any time such security is not listed on any securities exchange or quoted
      in the NASDAQ System or the over-the-counter market, the "Market Price"
      shall be the fair value thereof determined in the reasonable good faith
      judgment of the Corporation's Board of Directors.


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            "OPTIONS" means any rights, warrants or options to subscribe for or
      purchase Common Stock or Convertible Securities.

            "ORIGINAL PURCHASE PRICE" shall mean with respect to each share of
      Series C Preferred, the amount of cash consideration paid to the Company
      for such share and for any accompanying warrants or options issued with
      such share and not separately priced.

            "PAYMENT SATISFACTION DATE" means the date following the termination
      of the employment of James P. Jimirro ("JIMIRRO") with the Corporation as
      of which the following condition (whichever is applicable) has been
      satisfied:

            (i) if Jimirro's employment with the Corporation has been terminated
            by the Corporation for "Cause" pursuant to Section 4(e) of the
            Employment Agreement between Jimirro and the Corporation dated May
            17, 2002 (the "EMPLOYMENT AGREEMENT") or by Jimirro otherwise than
            for an Executive Good Reason Termination Event pursuant to Section
            4(g) of the Employment Agreement, then upon full payment of all
            compensation (excluding payments with respect to the movie "National
            Lampoon's Van Wilder") owed to Jimirro under the Employment
            Agreement; or

            (ii) if Jimirro's employment with the Corporation has been
            terminated by reason of Jimirro's death or disability, by the
            Corporation for "Convenience" pursuant to Section 4(f) of the
            Employment Agreement, or by Jimirro for an Executive Good Reason
            Termination Event pursuant to Section 4(g) of the Employment
            Agreement, then upon the later of (A) full payment to Jimirro of all
            compensation (including payments under the Severance Note (as
            defined in the Employment Agreement) but excluding payments with
            respect to the movie "National Lampoon's Van Wilder") owed to
            Jimirro under the Employment Agreement, and (B) thirteen (13) months
            after the payment to Jimirro of the "Cash Severance Payment"
            pursuant to, and as defined in, Section 5(d)(i) of the Employment
            Agreement.

            "PERSON" means an individual, a partnership, a corporation, a
      limited liability Corporation, a limited liability, an association, a
      joint stock Corporation, a trust, a joint venture, an unincorporated
      organization and a governmental entity or any department, agency or
      political subdivision thereof.


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            "SERIES C CLOSING DATE" means the date upon which the first sale and
      purchase of Series C Preferred is consummated, which is currently
      anticipated to be in July 2004.

            "SUBSIDIARY" means any corporation of which the shares of
      outstanding capital stock possessing the voting power (under ordinary
      circumstances) in electing the board of directors are, at the time as of
      which any determination is being made, owned by the Corporation either
      directly or indirectly through Subsidiaries.

            Section 10. AMENDMENT AND WAIVER. No amendment, modification or
      waiver shall be binding or effective with respect to any provision hereof
      without the affirmative vote or prior written consent of the holders of a
      majority of the Series C Preferred outstanding at the time such action is
      taken; and provided further that no change in the terms hereof may be
      accomplished by merger or consolidation of the Corporation with another
      corporation or entity unless the Corporation has obtained the affirmative
      vote or prior written consent of the holders of a majority of the Series C
      Preferred then outstanding.

            Section 11. NOTICES. Except as otherwise expressly provided
      hereunder, all notices referred to herein shall be in writing and shall be
      delivered by registered or certified mail, return receipt requested and
      postage prepaid, or by reputable overnight courier service, charges
      prepaid, and shall be deemed to have been given when so mailed or sent (i)
      to the Corporation, at its principal executive offices and (ii) to any
      stockholder, at such holder's address as it appears in the stock records
      of the Corporation (unless otherwise indicated by any such holder).

      RESOLVED FURTHER, that the Executive Vice President of the Corporation is
authorized to do or cause to be done all such acts or things and to make,
execute and deliver or cause to be made, executed and delivered all such
agreements, documents, instruments and certificates in the name and on behalf of
the Corporation or otherwise as he deems necessary, desirable or appropriate to
execute or carry out the purpose and intent of the foregoing resolutions.

      IN WITNESS WHEREOF, National Lampoon, Inc. has caused this Certificate of
Designations, Preferences, Rights and Limitations of Series C Convertible
Preferred Stock to be signed by its duly authorized officer as of this 15th day
of October 2004.

NATIONAL LAMPOON, INC.


BY:/s/ Douglas S. Bennett
   ---------------------------------
   Douglas S. Bennett
   Executive Vice President


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