LEVEL 8 SYSTEMS, INC.
CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES
AND LIMITATIONS OF PREFERRED STOCK
Designation, Amount, Par Value, Liquidation Value And Rank
1.1 The series of preferred stock shall be designated as Series B3 Convertible Redeemable Preferred Stock,
("Series B3 Preferred Stock" or "Preferred Stock"), and the number of shares so designated shall be 30,000
(which shall not be subject to increase without the consent of the Required Holders of the Series B3 Preferred
Stock). Each share of Preferred Stock, $.001 par value per share, shall have a liquidation value of $1,000 per
share (the "Liquidation Value"). The Board of Directors of the Company created the Series B3 Preferred Stock
pursuant to the authority conferred upon the Board of Directors of the Company by the Certificate of
Incorporation of the Company pursuant to ss.151(g) of the General Corporation Law of the State of Delaware.
1.2 The Series B3 Preferred Stock shall rank senior to the Junior Securities as to dividends, distributions and
upon liquidation, dissolution or winding up. The Series B3 Preferred Stock shall rank junior to the Senior
Securities as to dividends, distributions and upon liquidation, dissolution or winding up.
2.1 Holders of the Series B3 Preferred Stock ("Holders") shall not be entitled to receive any dividends unless
such dividends are duly authorized and declared by the Board of Directors of the Company.
2.2 So long as any Preferred Stock shall remain outstanding or unconverted, except pursuant to existing
agreements of the Company on the date hereof, neither the Company nor any Subsidiary thereof shall, without
the prior written consent of the Required Holders, redeem, purchase or otherwise acquire directly or indirectly
any Junior Securities, nor shall the Company directly or indirectly pay or declare any dividend or make any
distribution (other than a dividend or distribution described herein) upon, nor shall any distribution be m