**Exhibit3.6**

 

**CERTIFICATEOF DESIGNATIONS, PREFERENCES AND**

**RIGHTS OF SERIES F PREFERRED STOCK OF**

**STRATUS SERVICES GROUP, INC.**

 

The undersigned, the Executive Vice President andChief Financial Officer of Stratus Services Group, Inc. (the “Corporation”), acorporation organized and existing under the General Corporation Law of theState of Delaware, DOES HEREBY CERTIFY:

 

That, pursuant to the authority conferred on the Boardof Directors by the Amended and Restated Certificate of Incorporation of theCorporation and Section 151 of the General Corporation Law of the State ofDelaware, on July 29, 2002, the Board of Directors of the Corporation didunanimously approve the adoption of the following resolution providing for thedesignations, preferences and other rights, and the qualifications, limitationsor restrictions thereof, of the Series F Preferred Stock of the Corporation:

 

RESOLVED, that pursuant to the authority vested in theBoard of Directors in accordance with the provisions of the Amended and RestatedCertificate of Incorporation of the Corporation, there is hereby established aseries of Preferred Stock to which the following provisions shall beapplicable:

 

The shares of this series shall be designated the“Series F Preferred Stock” (the “Series F Preferred Stock”) and shallconsist of Twenty Thousand (20,000) shares, with a par value of $.01 per shareand a stated value of $100.00 per share and $2,000,000 in the aggregate.  A statement of the relative powers,dividends, preferences, rights, qualifications, limitations and restrictions ofthe Series F Preferred Stock is as follows:

 

1.                                       Dividends.

 

(a)                                  Theholders of the Series F Preferred shall be entitled to receive out of anyassets legally available therefor cumulative dividends at the rate of sevenpercent (7%) per annum, payable monthly on the tenth (10th) day of the eachmonth, commencing on the month following the Closing, in preference andpriority to any payment of any dividend on the Common Stock or theCorporation’s Series E Preferred Stock. Such dividends shall accrue on any given share from the day of originalissuance of such share and shall accrue from day to day whether or not earnedor declared.  If at any time dividendson the outstanding Series F Preferred Stock at the rate set forth above shallnot have been paid or declared and set apart for payment with respect to allpreceding periods, the amount of the deficiency shall be fully paid or declaredand set apart for payment, but without interest, before any distribution,whether by way of dividend or otherwise, shall be declared or paid upon or setapart for the shares of any other class or series of Common Stock of theCorporation.

 

(b)                                 Anydividend 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 connectionwith  such dividend has been registeredfor resale under the Securities Act of 1933, as

 

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amended (the “Act”), and the registration statementincluding a current prospectus with respect thereto remains in effect at thedate of delivery of such shares, and if the Corporation shall have givenwritten notice of its intention to pay such dividend in stock to all holders ofthe Series F Preferred Stock at least 10 days before the record date of such dividend.  If dividends are paid by the Corporation inshares of its Common Stock, then the number of shares of Common Stock issuableon account of such interest shall equal the cash amount of such dividend onsuch Dividend Payment Date divided by the Conversion Price (as defined below)on such date.

 

2.                                       Voting.  Holders of Series F Preferred Stock shall beentitled to notice of any shareholders’ meeting.  Except as otherwise required by law, at any annual or specialmeeting of the Corporation’s shareholders, or in connection with any writtenconsent in lieu of any such meeting, each outstanding share of Series FPreferred Stock shall be entitled to the number of votes equal to the number offull shares of Common Stock into which such share of Series F Preferred Stockis then convertible (calculated by rounding any fractional share down to thenearest whole number) on the date for determination of shareholders entitled tovote at the meeting.  Initially, eachshare of Series F Preferred Stock shall have 1,000 votes.  Except as otherwise required by law, theSeries F Preferred Stock and the Common Stock shall vote together as a singleclass on each matter submitted to the shareholders, and not by separate classor series.  The holders of the Series FPreferred Stock shall be entitled to vote separately as a class on any (a)proposed amendment to this Certificate of Designations, Preferences and Rightsof Series F Preferred Stock (the “Statement”) which would increase ordecrease the aggregate number of authorized shares of Series F Preferred Stock,(b) proposal to create a new class of shares having rights and preferencesequal to or having priority over the Series F Preferred Stock or (c) proposedamendments of this Statement that could adversely affect the powers,preferences, participations, rights, qualifications or restrictions of theSeries F Preferred Stock.  Any matter onwhich the holders of the Series F Preferred Stock are entitled to vote as aclass requires the affirmative vote of holders owning a majority of the issuedand outstanding shares of Series F Preferred Stock.

 

3.                                       LiquidationPreference.

 

(a)                                  SeriesF Preferred Stock.  Upon theoccurrence of a Liquidating Event (as defined below), whether voluntary orinvoluntary, the holders of the Series F Preferred Stock shall be entitled toreceive, out of the assets of the Corporation available for distribution to itsshareholders or from the proceeds from such Liquidating Event, and prior to andin preference to any payment or distribution made in respect of the CommonStock of the Corporation or the Corporation’s Series E Preferred Stock, $100.00in cash, securities or other property (based upon the Market Price thereof forsuch securities and the fair market value thereof for such other property, ineach case calculated as of the date of such Liquidating Event) for each shareof Series F Preferred Stock (together with all accrued and unpaid dividendsthereon) (the “Series F Liquidation Preference”).  If, upon such Liquidating Event, the assetsdistributable to the holders of the Series F Preferred Stock shall beinsufficient to permit the payment in full of the Series F

 

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Liquidation Preference, the assets of the Corporationshall be distributed to the holders of the Series F Preferred Stock ratablyuntil the holders shall have received the full amount to which they wouldotherwise be entitled.

 

(b)                                 Valuationof Securities.  For purposes of thisSection 3, if any asset distributed to shareholders upon the occurrence of anyLiquidating Event consists of property other than cash or securities, the valueof such distribution shall be deemed to be the fair market value thereof at thetime of such distribution, as determined in good faith by the Board of Directorsof the Corporation.  Any securities tobe delivered pursuant to this Section 3 shall be valued as follows:

 

(i)                                     Securitiesnot subject to an investment letter or other similar restrictions on freemarketability covered by Section 3(b)(ii) hereof shall be valued at the MarketPrice (as defined below); and

 

(ii)                                  Securitiessubject to investment letter or other restrictions on free marketability (otherthan restrictions arising solely by virtue of a stockholder’s status as anaffiliate or former affiliate) shall be valued at an appropriate discount fromthe Market Price, as reasonably determined by the Board of Directors in goodfaith, to reflect the adjusted fair market value thereof.

 

For purposes of this Statement, “Market Price” of any securitymeans the average of the closing prices of such security’s sales on theprincipal securities exchanges on which such security may at the time belisted, or, if there has been no sales on any such exchange on any day, theaverage of the highest bid and lowest asked prices on all such exchanges at theend of such day, or, if on any day such security is not so listed, the averageof the representative bid and asked prices quoted in the NASDAQ Stock Market asof 4:00 P.M., New York time, or, if on any day such security is not quoted inthe NASDAQ Stock Market, the average of the highest bid and lowest asked priceson such day in the domestic over-the-counter market as reported by NASD OTCBulletin Board, or any similar successor organization, in each such caseaveraged over a period of five days consisting of the day prior to the day asof which Market Price is being determined and the four consecutive businessdays prior to such day.  If at any timesuch security is not listed on any securities exchange or quoted in the NASDAQStock Market or the over-the-counter market, the Market Price shall be the fairvalue thereof determined in good faith by the Corporation’s Board of Directors

 

(c)                                  LiquidatingEvent.  Any of the following shallbe considered a “Liquidating Event”, and shall entitle the holders ofthe Series F Preferred Stock and the Common Stock to receive at the closing, incash, securities or other property, amounts as specified in Sections 3(a)(valued as provided in Section 3(b) above):

 

(i)                                     anyliquidation, dissolution or winding up of the Corporation; or

 

(ii)                                  asale, lease or other disposition of all or substantially all the Corporation’sassets provided, however, that if the holders of a majority ofthe shares of Series F Preferred Stock so elect by giving written notice to

 

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the Corporation before the effective date of any suchsale, lease or disposition that would otherwise be a Liquidating Event asdefined herein, such sale, lease or other disposition or consolidation shallnot be deemed a Liquidating Event and the provisions of Section 5(e) belowshall apply

 

(d)                                 Noticeof Liquidation Event.  TheCorporation shall give to each holder at least thirty (30) days prior writtennotice of any Liquidating Event by delivery of such notice via first classmail, postage prepaid, at the holder’s address as set forth in the records ofthe Corporation; provided, however, that any holder of Series FPreferred Stock may convert its shares of Series F Preferred Stock to CommonStock at any time prior to the payment date stated in such notice.

 

4.                                       Redemption.  Except to the extent already convertedpursuant to Section 5(a), the Company shall have the right, but not theobligation, to redeem any or all of the shares of the Series F Preferred Stockat any time prior to conversion at a redemption price of 115% of the purchaseprice paid for the Series F Preferred Stock on the Original Issue Date, plusall accumulated but unpaid (whether or not declared) dividends.

 

5.                                       Conversionof Series F Preferred Stock.  Eachholder of shares of Series F Preferred Stock shall have the right to convertsuch shares into shares of the Common Stock of the Corporation as follows:

 

(a)                                  OptionalConversion.  Any time afterissuance, all or any portion of shares of the Series F Preferred Stock, at theoption of the holders, may be converted into a number of fully paid andnonassessable shares (calculated as to each conversion to the largest wholeshare) of Common Stock of the Corporation determined by multiplying the numberof shares of Series F Preferred Stock to be converted times $100.00 anddividing the result by the Conversion Price (as defined below) then in effect.

 

(b)                                 ConversionPrice.  The initial conversion priceper share of Series F Preferred Stock (the “Conversion Price”) shall beequal to $0.10.

 

(c)                                  Subdivisionor Combination of Common Stock.  Inthe event that the Corporation at any time or from time to time shall effect asubdivision of the outstanding shares of Common Stock into a greater number ofshares of Common Stock (by stock split, reclassification or otherwise), or inthe event the outstanding shares of Common Stock shall be combined orconsolidated, by reclassification or otherwise, into a lesser number of sharesof Common Stock, then the Conversion Price in effect immediately prior to suchevent shall, concurrently with the effectiveness of such event, beproportionately decreased or increased, as appropriate.

 

(d)                                 ExtraordinaryEvent.  Prior to the consummation ofany Extraordinary Event (as defined below), the Corporation shall makeappropriate provisions (in form and substance reasonably satisfactory to theholders of a majority of the Series F Preferred Stock then outstanding) toensure that each of the holders of Series F

 

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Preferred Stock shall thereafter have the right toacquire and receive, in lieu of or in addition to (as the case may be) theshares of Common Stock immediately theretofore acquirable and receivable uponthe conversion of such holder’s Series F Preferred Stock, such shares of stock,securities or assets as such holder would have received in connection with suchExtraordinary Event if such holder had converted its Series F Preferred Stockimmediately prior to such Extraordinary Event. In each such case, the Corporation shall also make appropriateprovisions (in form and substance reasonably satisfactory to the holders of amajority of the Series F Preferred Stock then outstanding) to ensure that theprovisions of this Section 5 shall thereafter be applicable to the Series FPreferred Stock).  The Corporation shallnot effect any such consolidation, merger or sale, unless prior to theconsummation thereof, the successor entity (if other than the Corporation) resultingfrom such consolidation or merger or the entity purchasing such assets assumesby written instrument (in form and substance reasonably satisfactory to theholders of a majority of the Series F Preferred Stock then outstanding), theobligation to deliver to each such holder such shares of stock, securities orassets as, in accordance with the foregoing provisions, such holder may beentitled to acquire.  For purposes ofthis Section 5, “Extraordinary Event” means the occurrence orconsummation of a transaction or series of related transactions (other than anysuch transaction that is treated as a Liquidating Event) resulting in:  (i) a merger, consolidation, sale orreorganization in which the Corporation or any of its subsidiaries is not thesurviving corporation; or (ii) a sale, lease or exchange, directly orindirectly, of all or substantially all of the property and assets of theCorporation, whether or not in the ordinary course of business.

 

(e)                                  CertainEvents.  If any event occurs of thetype contemplated by the provisions of this Section 5 but not expresslyprovided for by such provisions (including, without limitation, stock dividend,partial liquidation, in kind dividend, the granting of stock appreciationrights, phantom stock rights or other rights with equity features), then theCorporation’s Board of Directors shall make an appropriate adjustment in theConversion Price so as to protect the rights of the holders of Series FPreferred Stock in a manner consistent with the other provisions of thisCertificate; provided, however, that no such adjustment shallincrease the Conversion Price as otherwise determined pursuant to this Section5 or decrease the number of shares of Common Stock issuable upon conversion ofeach share of Series F Preferred Stock.

 

(f)                                    ConversionProcedure.

 

(i)                                     Exceptas otherwise provided herein, each conversion of Series F Preferred Stock shallbe deemed to have been effected as of the close of business on the date onwhich the certificate or certificates representing the Series F Preferred Stockto be converted have been surrendered for conversion at the principal office ofthe Corporation (a “Conversion Date”). At the time any such conversion has been effected, the rights of theholder of the shares converted as a holder of Series F Preferred Stock shallcease and the person or persons in whose name or names any

 

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certificate or certificates for shares of Common Stockare to be issued upon such conversion shall be deemed to have become the holderor holders of record of the shares of Common Stock represented thereby.

 

(ii)                                  Notwithstandingany other provision hereof, if a conversion of Series F Preferred Stock is tobe made in connection with an Extraordinary Event or any other transactionaffecting the Corporation or any holder of Series F Preferred Stock, theconversion of any shares of Series F Preferred Stock may, at the election ofthe holder thereof, be conditioned upon the consummation of such transaction,in which case such conversion shall be deemed to be effective immediately priorto the consummation of such transaction.

 

(iii)                               Promptly(and in any event within five (5) business days in the case of Section5(f)(iii)(A) below) after a conversion has been effected, the Corporation shalldeliver to the converting holder:

 

(A)                              a certificate or certificatesrepresenting the number of shares of Common Stock issuable by reason of suchconversion in such name or names and such denomination or denominations as theconverting holder has specified; and

 

(B)                                a certificate representing any shares ofSeries F Preferred Stock which were represented by the certificate orcertificates delivered to the Corporation in connection with such conversionbut which were not converted.

 

(iv)                              Theissuance of certificates for shares of Common Stock upon conversion of Series FPreferred Stock shall be made without charge to the holders of such Series FPreferred Stock for any issuance tax in respect thereof (so long as suchcertificates are issued in the name of the record holder of such Series FPreferred Stock) or other cost incurred by the Corporation in connection withsuch conversion and the related issuance of shares of Common Stock.  Upon conversion of each share of Series FPreferred Stock, the Corporation shall take all such actions as are necessaryin order to ensure that the Common Stock issuable with respect to suchconversion shall be validly issued, fully paid and nonassessable, free andclear of all taxes (other than any taxes relating to any dividends paid withrespect thereto), liens, charges and encumbrances with respect to the issuancethereof.

 

(v)                                 TheCorporation shall not close its books against the transfer of Series FPreferred Stock or of Common Stock issued or issuable upon conversion of SeriesF Preferred Stock in any manner which interferes with the timely conversion ofSeries F Preferred Stock.  TheCorporation shall assist and cooperate with any holder of such shares requiredto make any governmental filings or obtain any governmental approval prior toor in

 

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connection with any conversion of such shareshereunder (including, without limitation, making any filings required to bemade by the Corporation).

 

(g)                                 NoFractional Shares.  No fractionalshare shall be issued upon the conversion of any share or shares of Series FPreferred Stock.  All shares of CommonStock (including fractions thereof) issuable upon conversion of more than oneshare of Series F Preferred Stock by a holder thereof shall be aggregated forpurposes of determining whether the conversion would result in the issuance ofany fractional share.  If, after theaforementioned aggregation, the conversion would result in the issuance of afraction of a share of Common Stock, the Corporation shall, in lieu of issuingany fractional share, pay the holder otherwise entitled to such fraction a sumin cash equal to the fair market value of such fraction on the date ofconversion (as determined in good faith by the Board of Directors).

 

(h)                                 NoImpairment.  The Corporation willnot, by amendment of this Certificate or through any reorganization, transferof assets, consolidation, merger, dissolution, issue or sale of securities orany other voluntary action (other than actions taken in good faith), avoid theobservance or performance of any of the terms to be observed or performedhereunder by the Corporation but will at all times in good faith assist incarrying out all the provisions of this Section 5 and in taking all such actionas may be necessary or appropriate in order to protect the conversion rights ofthe holders of the Series F Preferred Stock against impairment.

 

(i)                                     Certificatesas to Adjustments.  Upon theoccurrence of each adjustment or readjustment of the Conversion Price pursuantto this Section 5, the Corporation at its expense shall promptly compute suchadjustment or readjustment in accordance with the terms hereof and prepare andfurnish to each holder of Series F Preferred Stock a certificate setting forthsuch adjustment or readjustment and showing in detail the facts upon which suchadjustment or readjustment is based. The Corporation shall, upon the written request at any time of anyholder of Series F Preferred Stock, furnish or cause to be furnished to suchholder a like certificate setting forth (i) such adjustments and readjustments,(ii) the Conversion Price at the time in effect, and (iii) the number of sharesof Common Stock and the amount, if any, of other property that at the time wouldbe received upon the conversion of the Series F Preferred Stock.

 

(j)                                     Noticesof Record Date.  In the event of anytaking by the Corporation of a record of the holders of any class of securitiesfor the purpose or determining the holders thereof who are entitled to receiveany dividend or other distribution, any security or right convertible into orentitling the holder thereof to receive additional shares of Common Stock, orany right to subscribe for, purchase or otherwise acquire any shares of stock ofany class or any other securities or property, or to receive any other right,the Corporation shall mail to each holder of Series F Preferred Stock, at least10 days prior to the date specified therein, a notice specifying the date onwhich any such record is to be taken for the purpose of such dividend.

 

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(k)                                  Reservationof Common Stock.  The Corporationshall, at all times when the Series F Preferred Stock shall be outstanding,reserve and keep available out of its authorized but unissued stock, for thepurpose of effecting the conversion of the Series F Preferred Stock, suchnumber of its duly authorized shares of Common Stock as shall from time to timebe sufficient to effect the conversion of all outstanding Series F PreferredStock.  Before taking any action whichwould cause the effective purchase price for the Series F Preferred Stock to beless than the par value of the shares of Series F Preferred Stock, theCorporation shall take any corporate action which may, in the opinion of itscounsel, be necessary in order that the Corporation may validly and legallyissue fully paid and nonassessable shares of such Common Stock at sucheffective purchase price.

 

6.                                       Definitions.  For the purposes hereof, the following termsshall 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 Statesor a day on which banking institutions in the State of New York or State of NewJersey are authorized or required by law or other government action to close.

 

“Commission” means the Securities and ExchangeCommission.

 

“Common Stock” means the common stock, $.01 parvalue per share, of the Company and stock of any other class into which suchshares may hereafter have been reclassified or changed.

 

“Exchange Act” means the Securities ExchangeAct of 1934, as amended.

 

“Original Issue Date” shall mean July 30, 2002.

 

“OTC” means the OTC Bulletin Board service.

 

“Person” means an individual, a corporation, apartnership, a limited liability company, an association, a trust or otherentity or organization, including a government or political subdivision or anagency or instrumentality thereof.

 

“Securities Act” means the Securities Act of1933, as amended, and the rules and regulations promulgated thereunder.

 

“Subsequent Market” means the New York StockExchange, Nasdaq SmallCap Market, American Stock Exchange or Nasdaq NationalMarket.

 

“Trading Day” means (a) a day on which theshares of Common Stock are traded on the OTC or on such Subsequent Market onwhich the shares of Common Stock are then listed or quoted, or (b) if theshares of Common Stock are traded in the over-the-counter market, as reportedby the National Quotation Bureau Incorporated (or any similar organization oragency succeeding its functions of reporting prices); provided, that inthe

 

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event that the shares of Common Stock are not listedor quoted as set forth in (a) and (b) hereof, then Trading Day shall mean aBusiness Day.

 

7.                                       Retirementof Shares.  Any shares of Series FPreferred Stock redeemed, purchased or otherwise acquired by the Corporationshall be deemed retired and shall be cancelled and may not under any circumstancesthereafter be reissued or otherwise disposed of by the Corporation.

 

INWITNESS WHEREOF, the Corporation has caused this Certificate of Designations,Preferences and rights to be signed by Michael A. Maltzman, its Executive VicePresident and Chief Financial Officer this 30th day of July 2002.

 
|   |   | Stratus Services  Group, Inc.                         |   |
|--------|--------|-------------------------------------------------------|--------|
|   |   |                                                  |   |
|   | By:    | /s/ Michael A.  Maltzman                              |   |
|   | Name:  |      Michael A. Maltzman          |
|   | Title: |      Executive Vice President and |   |
|   |   |      Chief Financial Officer      |   |
|        |        |                                                       |        |  |

 

 

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