Exhibit 3.3
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND
RIGHTS OF SERIES B PREFERRED STOCK OF
STRATUS SERVICES GROUP, INC.
The undersigned, the Secretary and General Counsel of Stratus Services
Group, Inc. (the "Corporation"), a corporation organized and existing under the
General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
That, pursuant to the authority conferred on the Board of Directors by
the Amended and Restated Certificate of Incorporation of the Corporation and
Section 151 of the General Corporation Law of the State of Delaware, on March
11, 2002, the Board of Directors of the Corporation did unanimously approve the
adoption of the following resolution providing for the designations, preferences
and other rights, and the qualifications, limitations or restrictions thereof,
of the Series B Preferred Stock of the Corporation:
RESOLVED, that pursuant to the authority vested in the Board of
Directors in accordance with the provisions of the Amended and Restated
Certificate of Incorporation of the Corporation, there is hereby established a
series of Preferred Stock to which the following provisions shall be applicable:
The shares of this series shall be designated the "Series B Preferred
Stock" (the "Series B Preferred Stock") and shall consist of Five Hundred
Thousand (500,000) shares, with a par value of $.01 per share and a stated value
of $5.00 per share and $2,500,000 in the aggregate. A statement of the relative
powers, dividends, preferences, rights, qualifications, limitations and
restrictions of the Series B Preferred Stock is as follows:
1. Dividends.
(a) The holders of the Series B Preferred shall be entitled to
receive out of any assets legally available therefore
cumulative dividends at the rate of 6% per annum, payable on
a quarterly basis on March 31, June 30, October 31 and
December 31 of each year (each a "Dividend Payment Date")
when and as declared by the Board of Directors, in preference
and priority to any payment of any dividend on the Common
Stock or any other class or series of stock of the
Corporation, including the Corporation's Series A Preferred
Stock. Such dividends shall accrue on any given share from
the day of original issuance of such share and shall accrue
from day to day whether or not earned or declared. If at any
time dividends on the outstanding Series B Preferred Stock at
the rate set forth above shall not have been paid or declared
and set apart for payment with respect to all preceding
periods, the amount of the deficiency shall be fully paid or
declared and set apart for payment, but without interest,
before any distribution, whether by way of dividend or
otherwise, shall be declared or paid upon or set apart for
the shares of any other class or series of stock of the
Corporation.
(b) Any dividend may be paid, at the option of the Corporation,
either (i) in cash or (ii) in shares of Common Stock if the
Common Stock issuable in connection with such dividend has
been registered for resale under the Securities Act, and the
registration statement, including a current prospectus with
respect thereto remains in effect at the date of delivery of
such shares, and if the Corporation shall have given written
notice of its intention to pay the dividend in stock to all
holders of the Series B Preferred Stock at least 10 days
before the record date for such dividend. If dividends are
paid by the Company in shares of its Common Stock, then the
number of shares of Common Stock issuable on account of such
interest shall equal the cash amount of such dividend on such
Conversion Date divided by the Conversion Price (as defined
below) on such date.
2. VOTING. Holders of Series B Preferred Stock shall not be entitled to
any voting rights except as otherwise provided by law.
3. Liquidation Preference.
(a) SERIES B PREFERRED STOCK. Upon the occurrence of a
Liquidating Event (as defined below), whether voluntary or
involuntary, the holders of the Series B Preferred Stock
shall be entitled to receive, out of the assets of the
Corporation available for distribution to its shareholders or
from the proceeds from such Liquidating Event, and prior to
and in preference to any payment or distribution made in
respect of the Common Stock or any other class or series of
stock of the Corporation, including the Corporation's Series
A Preferred Stock, $5.00 in cash, securities or other
property (based upon the Market Price thereof for such
securities and the fair market value thereof for such other
property, in each case calculated as of the date of such
Liquidating Event) for each share of Series B Preferred Stock
(together with all accrued and unpaid dividends thereon) (the
"SERIES B LIQUIDATION PREFERENCE"). If, upon such Liquidating
Event, the assets distributable to the holders of the Series
B Preferred Stock shall be insufficient to permit the payment
in full of the Series B Liquidation Preference, the assets of
the Corporation shall be distributed to the holders of the
Series B Preferred Stock ratably until the holders shall have
received the full amount to which they would otherwise be
entitled.
(b) Valuation of Securities. For purposes of this Section 3, if
any asset distributed to shareholders upon the occurrence of
any Liquidating Event consists of property other than cash or
securities, the value of such distribution shall be deemed to
be the fair market value thereof at the time of such
distribution, as determined in good faith by the Board of
Directors of the Corporation. Any securities to be delivered
pursuant to this Section 3 shall be valued as follows:
(i) Securities not subject to an investment letter or other
similar restrictions on free marketability covered by
Section 3(b)(ii) hereof shall be valued at the Market
Price (as defined below); and
(ii) Securities subject to investment letter or other
restrictions on free marketability (other than
restrictions arising solely by virtue of a stockholder's
status as an affiliate or former affiliate) shall be
valued at an appropriate discount from the Market Price,
as reasonably determined by
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the Board of Directors in good faith, to reflect the
adjusted fair market value thereof.
For purposes of this Statement, "MARKET PRICE" of any security means the average
of the closing prices of such security's sales on the principal securities
exchanges on which such security may at the time be listed, or, if there has
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 by the Nasdaq Stock Market as of 4:00 P.M., New York
time, or, if on any day such security is not quoted by the Nasdaq Stock Market,
the average of the highest bid and lowest asked prices on such day in the
domestic over-the-counter market as reported by the NASD OTC Bulletin Board, or
any similar successor organization, in each such case averaged over a period of
five days consisting of the day prior to the day as of which Market Price is
being determined and the four consecutive business days prior to such day. If at
any time such security is not listed on any securities exchange or quoted by the
Nasdaq Stock Market or the over-the-counter market, the Market Price shall be
the fair value thereof determined in good faith by the Corporation's Board of
Directors
(c) LIQUIDATING EVENT. Any of the following shall be considered a
"LIQUIDATING EVENT", and shall entitle the holders of the
Series B Preferred Stock and the Common Stock to receive at
the closing, in cash, securities or other property, amounts
as specified in Sections 3(a) (valued as provided in Section
3(b) above):
(i) any liquidation, dissolution or winding up of the
Corporation; or
(ii) a sale, lease or other disposition of all or
substantially all the Corporation's assets PROVIDED,
HOWEVER, that if the holders of a majority of the shares
of Series B Preferred Stock so elect by giving written
notice to the Corporation before the effective date of
any such sale, lease or disposition that would otherwise
be a Liquidating Event as defined herein, such sale,
lease or other disposition or consolidation shall not be
deemed a Liquidating Event and the provisions of Section
4(d) below shall apply.
(d) NOTICE OF LIQUIDATION EVENT. The Corporation shall give to
each holder at least thirty (30) days prior written notice of
any Liquidating Event by delivery of such notice via first
class mail, postage prepaid, at the holder's address as set
forth in the records of the Corporation; provided, however,
that any holder of Series B Preferred Stock may convert its
shares of Series B Preferred Stock to Common Stock at any time
prior to the payment date stated in such notice.
4. CONVERSION OF SERIES B PREFERRED STOCK. Each holder of shares of Series
B Preferred Stock shall have the right to convert such shares into
shares of the Common Stock of the Corporation as follows:
(a) OPTIONAL CONVERSION. At any time after issuance, all or any
portion of shares of the Series B Preferred Stock may be
converted, at the option of the holders, into fully paid and
nonassessable shares of Common Stock of the Corporation by
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multiplying the number of shares of Series B Preferred Stock to
be converted TIMES the Liquidation Preference of such shares and
dividing the result by the Conversion Price (as defined below)
then in effect.
(b) CONVERSION PRICE. The initial conversion price per share of
Series B Preferred Stock (the "CONVERSION PRICE") shall be the
lesser of (1) $4.65 or (2) 75% of the Per Share Market Value on
the Trading Day immediately preceding the applicable Conversion
Date (as defined below).
(c) SUBDIVISION OR COMBINATION OF COMMON STOCK. In the event that the
Corporation at any time or from time to time shall effect a
subdivision of the outstanding shares of Common Stock into a
greater number of shares of Common Stock (by stock split,
reclassification or otherwise), or in the event the outstanding
shares of Common Stock shall be combined or consolidated, by
reclassification or otherwise, into a lesser number of shares of
Common Stock, then the Conversion Price in effect immediately
prior to such event shall, concurrently with the effectiveness of
such event, be proportionately decreased or increased, as
appropriate.
(d) EXTRAORDINARY EVENT. Prior to the consummation of any
Extraordinary Event (as defined below), the Corporation shall
make appropriate provisions (in form and substance reasonably
satisfactory to the holders of a majority of the Series B
Preferred Stock then outstanding) to ensure that each of the
holders of Series B Preferred Stock shall thereafter have the
right to acquire and receive, in lieu of or in addition to (as
the case may be) the shares of Common Stock immediately
theretofore acquirable and receivable upon the conversion of such
holder's Series B Preferred Stock, such shares of stock,
securities or assets as such holder would have received in
connection with such Extraordinary Event if such holder had
converted its Series B Preferred Stock immediately prior to such
Extraordinary Event. In each such case, the Corporation shall
also make appropriate provisions (in form and substance
reasonably satisfactory to the holders of a majority of the
Series B Preferred Stock then outstanding) to ensure that the
provisions of this Section 4 shall thereafter be applicable to
the Series B Preferred Stock. The Corporation shall not effect
any such consolidation, merger or sale, unless prior to the
consummation thereof, the successor entity (if other than the
Corporation) resulting from such consolidation or merger or the
entity purchasing such assets assumes by written instrument (in
form and substance reasonably satisfactory to the holders of a
majority of the Series B Preferred Stock then outstanding), the
obligation to deliver to each such holder such shares of stock,
securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to acquire. For purposes
of this Section 4, "EXTRAORDINARY EVENT" means the occurrence or
consummation of a transaction or series of related transactions
(other than any such transaction that is treated as a Liquidating
Event) resulting in: (i) a merger, consolidation, sale or
reorganization in which the Corporation or any of its
subsidiaries is not the surviving corporation; or (ii) a sale,
lease or exchange, directly or indirectly, of all or
substantially all of the property and assets of the Corporation,
whether or not in the ordinary course of business.
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(e) CERTAIN EVENTS. If any event occurs of the type contemplated by
the provisions of this Section 4 but not expressly provided for
by such provisions (including, without limitation, stock
dividend, partial liquidation, in kind dividend, the granting of
stock appreciation rights, phantom stock rights or other rights
with equity features), then the Corporation's Board of Directors
shall make an appropriate adjustment in the Conversion Price so
as to protect the rights of the holders of Series B Preferred
Stock in a manner consistent with the other provisions of this
Designation of Series B Preferred Stock; PROVIDED, HOWEVER, that
no such adjustment shall increase the Conversion Price as
otherwise determined pursuant to this Section 4 or decrease the
number of shares of Common Stock issuable upon conversion of each
share of Series B Preferred Stock.
(f) CONVERSION PROCEDURE.
(i) Except as otherwise provided herein, each conversion of
Series B Preferred Stock 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 B
Preferred Stock to be converted have been surrendered for
conversion at the principal office of the Corporation (a
"Conversion Date"). At the time any such conversion has been
effected, the rights of the holder of the shares converted as
a holder of Series B Preferred Stock shall cease and the
person or persons in whose name or names any certificate or
certificates for shares of Common Stock are to be issued upon
such conversion shall be deemed to have become the holder or
holders of record of the shares of Common Stock represented
thereby.
(ii) Notwithstanding any other provision hereof, if a conversion
of Series B Preferred Stock is to be made in connection with
an Extraordinary Event or any other transaction affecting the
Corporation or any holder of Series B Preferred Stock, the
conversion of any shares of Series B Preferred Stock may, at
the election of the holder thereof, be conditioned upon the
consummation of such transaction, in which case such
conversion shall be deemed to be effective immediately prior
to the consummation of such transaction.
(iii) Promptly (and in any event within five (5) business days in
the case of Section 4(f)(iii)(A) below) after a conversion
has been effected, the Corporation shall deliver to the
converting holder:
(A) a certificate or certificates representing the number of
shares of Common Stock issuable by reason of such
conversion in such name or names and such denomination or
denominations as the converting holder has specified; and
(B) a certificate representing any shares of Series B
Preferred Stock which were represented by the certificate
or certificates delivered
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to the Corporation in connection with such conversion
but which were not converted.
(iv) The issuance of certificates for shares of Common Stock upon
conversion of Series B Preferred Stock shall be made without
charge to the holders of such Series B Preferred Stock for
any issuance tax in respect thereof (so long as such
certificates are issued in the name of the record holder of
such Series B Preferred Stock) or other cost incurred by the
Corporation in connection with such conversion and the
related issuance of shares of Common Stock. Upon conversion
of each share of Series B Preferred Stock, the Corporation
shall take all such actions as are necessary in order to
ensure that the Common Stock issuable with respect to such
conversion shall be validly issued, fully paid and
nonassessable, free and clear of all taxes (other than any
taxes relating to any dividends paid with respect thereto),
liens, charges and encumbrances with respect to the issuance
thereof.
(v) The Corporation shall not close its books against the
transfer of Series B Preferred Stock or of Common Stock
issued or issuable upon conversion of Series B Preferred
Stock in any manner which interferes with the timely
conversion of Series B Preferred Stock. The Corporation shall
assist and cooperate with any holder of such shares required
to make any governmental filings or obtain any governmental
approval prior to or in connection with any conversion of
such shares hereunder (including, without limitation, making
any filings required to be made by the Corporation).
(g) LIMITATION ON NUMBER OF CONVERSION SHARES. The Corporation shall
not be obligated to issue, in the aggregate, more than 1,927,510
shares (such number of shares, the "Issuable Maximum") of Common
Stock (which equals 19.999% of the number of shares of Common
Stock outstanding as of March 11, 2002) as presently constituted
(the "NASDAQ Cap") upon conversion of the Series B Preferred
Stock, if issuance of a larger number of shares would constitute
a breach of the Corporation's obligations under its agreements
with the National Association of Securities Dealers, Inc. (the
"NASD") or the Nasdaq Stock Market ("NASDAQ") or the rules of
such organizations. Such maximum number of shares of Common Stock
shall be proportionately and equitably adjusted in the event of
stock splits, stock dividends, reverse stock splits,
reclassifications or other such events, in such manner as the
Board of Directors of the Corporation shall reasonably determine.
If on any Conversion Date (A) the shares of Common Stock are
listed for trading on NASDAQ, (B) the Conversion Price in effect
is such that the aggregate number of shares of Common Stock that
would be issuable upon conversion in full of all of the then
outstanding shares of Series B Preferred Stock, together with any
shares previously issued upon conversion of the Series B
Preferred Stock, would exceed the NASDAQ Cap, and (C) the Company
shall not have previously obtained the vote of stockholders
("Stockholder Approval"), if any, as may be required by the
applicable rules and
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regulations of NASDAQ applicable to approve the issuance of
shares in excess of the NASDAQ Cap pursuant to the terms hereof,
then the Company shall issue to the holder of Series B Preferred
Stock requesting conversion a number of shares of Common Stock
equal to such holder's pro rata portion (which shall be
calculated pursuant to the terms hereof) of the Issuable Maximum,
and with respect to the remainder of the shares of Series B
Preferred Stock then held by such holder for which a conversion
in accordance with the Conversion Price would result in an
issuance of shares of Common Stock in excess of the holders' pro
rata portion (which shall be calculated pursuant to the terms
hereof) of the Issuable Maximum, the converting holder shall have
the right to require the Corporation to use its best efforts to
obtain the Stockholder Approval applicable to such issuance as
soon as reasonably possible. The pro rata portion of the Issuable
Maximum for each holder of Series B Preferred Stock shall be
determined by dividing (x) the number of shares of Series B
Preferred Stock issued or sold to such holder and/or its
transferor on the Original Issue Date by (y) the total number of
shares of Series B Preferred Stock issued and sold by the Company
on the Original Issue Date. If any of the original holders of
Series B Preferred Stock and their transferees no longer holds
any shares of Series B Preferred Stock, then such holder's and
the holders' transferees remaining portion of the Issuable
Maximum shall be allocated pro rata among the remaining holders
of Series B Preferred Stock.
(h) Certain Conversion Restrictions.
(i) A holder may not convert shares of Series B Preferred Stock
or receive shares of Common Stock as payment of dividends
hereunder to the extent such conversion or receipt of such
interest payment would result in the holder, together with
any affiliate thereof, beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the
rules promulgated thereunder) in excess of 4.999% of the then
issued and outstanding shares of Common Stock, including
shares issuable upon conversion of, and payment of dividends
on, the shares of Series B Preferred Stock held by such
Holder after application of this Section. Since the holder
will not be obligated to report to the Company the number of
shares of Common Stock it may hold at the time of a
conversion hereunder, unless the conversion at issue would
result in the issuance of shares of Common Stock in excess of
4.999% of the then outstanding shares of Common Stock without
regard to any other shares which may be beneficially owned by
the holder or an affiliate thereof, the Holder shall have the
authority and obligation to determine whether the restriction
contained in this Section will limit any particular
conversion hereunder and to the extent that the holder
determines that the limitation contained in this Section
applies, the determination of which shares of Series B
Preferred Stock are convertible shall be the responsibility
and obligation of the holder. If the holder has delivered a
Conversion Notice for shares of Series B Preferred Stock
that, without regard to any other shares that the holder or
its affiliates may beneficially own, would result in
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the issuance in excess of the permitted amount hereunder, the
Company shall notify the holder of this fact and shall honor
the conversion for the maximum principal amount permitted to
be converted on such Conversion Date in accordance with the
periods described in Section 4(b) and, at the option of the
holder, either retain any principal amount tendered for
conversion in excess of the permitted amount hereunder for
future conversions or return such excess principal amount to
the holder. The provisions of this Section may be waived by a
holder (but only as to itself and not to any other holder)
upon not less than 61 days prior notice to the Company. Other
holders shall be unaffected by any such waiver.
(ii) A holder may not convert shares of Series B Preferred Stock
or receive shares of Common Stock as payment of dividends
hereunder to the extent such conversion or receipt of such
interest payment would result in the Holder, together with
any affiliate thereof, beneficially owning (as determined in
accordance with Section 13(d) of the Exchange Act and the
rules promulgated thereunder) in excess of 9.999% of the then
issued and outstanding shares of Common Stock, including
shares issuable upon conversion of, and payment of interest
on, the shares of Series B Preferred Stock held by such
Holder after application of this Section. Since the holder
will not be obligated to report to the Company the number of
shares of Common Stock it may hold at the time of a
conversion hereunder, unless the conversion at issue would
result in the issuance of shares of Common Stock in excess of
9.999% of the then outstanding shares of Common Stock without
regard to any other shares which may be beneficially owned by
the Holder or an affiliate thereof, the holder shall have the
authority and obligation to determine whether the restriction
contained in this Section will limit any particular
conversion hereunder and to the extent that the holder
determines that the limitation contained in this Section
applies, the determination of which portion of the principal
amount of shares of Series B Preferred Stock are convertible
shall be the responsibility and obligation of the Holder. If
the holder has delivered a Conversion Notice for shares of
Series B Preferred Stock that, without regard to any other
shares that the holder or its affiliates may beneficially
own, would result in the issuance in excess of the permitted
amount hereunder, the Company shall notify the holder of this
fact and shall honor the conversion for the maximum principal
amount permitted to be converted on such Conversion Date in
accordance with the periods described in Section 4(b) and, at
the option of the holder, either retain any principal amount
tendered for conversion in excess of the permitted amount
hereunder for future conversions or return such excess shares
of Series B Preferred Stock to the holder. The provisions of
this Section may be waived by a Holder (but only as to itself
and not to any other holder of Series B Preferred Stock) upon
not less than 61 days prior notice to the Company. Other
holders of Series B Preferred Stock shall be unaffected by
any such waiver.
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(i) NO FRACTIONAL SHARES. No fractional share shall be issued
upon the conversion of any share or shares of Series B
Preferred Stock. All shares of Common Stock (including
fractions thereof) issuable upon conversion of more than one
share of Series B Preferred Stock by a holder thereof shall
be aggregated for purposes of determining whether the
conversion would result in the issuance of any fractional
share. If, after the aforementioned aggregation, the
conversion would result in the issuance of a fraction of a
share of Common Stock, the Corporation shall, in lieu of
issuing any fractional share, pay the holder otherwise
entitled to such fraction a sum in cash equal to the fair
market value of such fraction on the date of conversion (as
determined in good faith by the Board of Directors).
(j) NO IMPAIRMENT. The Corporation will not, by amendment of this
Statement or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action (other than actions
taken in good faith), avoid the 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
carrying out all the provisions of this Section 4 and in
taking all such action as may be necessary or appropriate in
order to protect the conversion rights of the holders of the
Series B Preferred Stock against impairment.
(k) CERTIFICATES AS TO ADJUSTMENTS. Upon the occurrence of each
adjustment or readjustment of the Conversion Price pursuant
to this Section 4, the Corporation at its expense shall
promptly compute such adjustment or readjustment in
accordance with the terms hereof and prepare and furnish to
each holder of Series B Preferred Stock a certificate setting
forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is
based. The Corporation shall, upon the written request at any
time of any holder of Series B Preferred Stock, furnish or
cause to be furnished to such holder a like certificate
setting forth (i) such adjustments and readjustments, (ii)
the Conversion Price at the time in effect, and (iii) the
number of shares of Common Stock and the amount, if any, of
other property that at the time would be received upon the
conversion of the Series B Preferred Stock.
(l) 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 or determining the holders thereof
who are entitled to receive any dividend or other
distribution, any security or right convertible into or
entitling the holder thereof to receive additional shares of
Common Stock, or 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 Series B
Preferred Stock, at least 10 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.
(m) RESERVATION OF COMMON STOCK. The Corporation shall, at all
times when the Series B Preferred Stock shall be outstanding,
reserve and keep available out of its authorized but unissued
stock, for the purpose of effecting the conversion of the
Series B Preferred Stock, such number of its duly authorized
shares of Common
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Stock as shall from time to time be sufficient to effect the
conversion of all outstanding Series B Preferred Stock.
Before taking any action which would cause the effective
purchase price for the Series B Preferred Stock to be less
than the par value of the shares of Series B Preferred Stock,
the Corporation shall take any corporate action which may, in
the opinion of its counsel, be necessary in order that the
Corporation may validly and legally issue fully paid and
nonassessable shares of such Common Stock at such effective
purchase price.
5. DEFINITIONS. For the purposes hereof, the following terms shall have
the following meanings:
"BUSINESS DAY" means any day except Saturday, Sunday and any day which
shall be a federal legal holiday in the United States or a day on which
banking institutions in the State of New York or State of New Jersey
are authorized or required by law or other government action to close.
"CLOSING PRICE" means on any particular date: (a) the closing sales
price per share of Common Stock on such date on the OTC or on such
Subsequent Market on which the shares of Common Stock are then listed
or quoted (as reported by Bloomberg L.P. at 4:15 PM (New York time) for
the closing sales price for regular session trading on such day), or if
there is no such price on such date, then the closing sales price on
the OTC or on such Subsequent Market on the date nearest preceding such
date (as reported by Bloomberg L.P. at 4:15 PM (New York time) for the
closing sales price for regular session trading on such day), or (b) if
the shares of Common Stock are not then listed or quoted on the OTC or
a Subsequent Market, the closing sales price for a share of Common
Stock in the over-the-counter market, as reported by the National
Quotation Bureau Incorporated or similar organization or agency
succeeding to its functions of reporting prices) at the close of
business on such date, or (c) if the shares of Common Stock are not
then reported by the National Quotation Bureau Incorporated (or similar
organization or agency succeeding to its functions of reporting
prices), then the average of the "Pink Sheet" quotes for the relevant
conversion period, as determined in good faith by the Holder, or (d) if
the shares of Common Stock are not then publicly traded the fair market
value of a share of Common Stock as determined in good faith by the
Corporation's Board of Directors.
"COMMISSION" means the Securities and Exchange Commission.
"Common Stock" means the common stock, $.01 par value per share, of the
Company and stock of any other class into which such shares may
hereafter have been reclassified or changed.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"ORIGINAL ISSUE DATE" shall mean March 11, 2002.
"OTC" means the OTC Bulletin Board service.
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"PER SHARE MARKET VALUE" means on any particular date: (a) the closing
bid price per share of Common Stock on such date on the OTC or on such
Subsequent Market on which the shares of Common Stock are then listed
or quoted (as reported by Bloomberg L.P. at 4:15 PM (New York time) for
the closing bid price for regular session trading on such day), or if
there is no such price on such date, then the closing bid price on the
OTC or on such Subsequent Market on the date nearest preceding such
date (as reported by Bloomberg L.P. at 4:15 PM (New York Time) for the
closing bid price for regular session trading on such day), or (b) if
the shares of Common Stock are not then listed or quoted on the OTC or
a Subsequent Market, the closing bid price for a share of Common Stock
in the over-the-counter market, as reported by the National Quotation
Bureau Incorporated or similar organization or agency succeeding to its
functions of reporting prices) at the close of business on such date,
or (c) if the shares of Common Stock are not then reported by the
National Quotation Bureau Incorporated (or similar organization or
agency succeeding to its functions of reporting prices),then the
average of the "Pink Sheet" quotes for the relevant conversion period,
as determined in good faith by the Holder, or (d) if the shares of
Common Stock are not then publicly traded the fair market value of a
share of Common Stock as determined in good faith by the Corporation's
Board of Directors.
"PERSON" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or other entity or
organization, including a government or political subdivision or an
agency or instrumentality thereof.
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"SUBSEQUENT MARKET" means the New York Stock Exchange, Nasdaq SmallCap
Market, American Stock Exchange or Nasdaq National Market.
"TRADING DAY" means (a) a day on which the shares of Common Stock are
traded on the OTC or on such Subsequent Market on which the shares of
Common Stock are then listed or quoted, or (b) if the shares of Common
Stock are traded in the over-the-counter market, as reported by the
National Quotation Bureau Incorporated (or any similar organization or
agency succeeding its functions of reporting prices); provided, that in
the event that the shares of Common Stock are not listed or quoted as
set forth in (a) and (b) hereof, then Trading Day shall mean a Business
Day.
"UNDERLYING SHARES" means the shares of Common Stock issuable upon
conversion of the Series B Preferred Stock or as payment of dividends
in accordance with the terms hereof.
"UNDERLYING SHARES REGISTRATION STATEMENT" means a registration
statement filed under the Securities Act covering, among other things,
the resale of the Underlying Shares.
6. RETIREMENT OF SHARES. Any shares of Series B Preferred Stock redeemed,
purchased or otherwise acquired by the Corporation shall be deemed
retired and shall be cancelled and may not under any circumstances
thereafter be reissued or otherwise disposed of by the Corporation.
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IN WITNESS WHEREOF, the Corporation has caused this Certificate of
Designations, Preferences and rights to be signed by Michael A. Maltzman,
Executive Vice President and Chief Financial Officer, this 11th day of March
2002.
Stratus Services Group, Inc.
By: /s/ Michael A. Maltzman
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Name: Michael A. Maltzman
Title: Executive Vice President and
Chief Financial Officer
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