Waiver of Series E Registration Penalties Agreement between Stratus Services Group, Inc. and Pinnacle Investment Partners, L.P.

Summary

Stratus Services Group, Inc. and Pinnacle Investment Partners, L.P., the majority holder of Series E Preferred Stock, agree that Pinnacle will waive any further penalties for Stratus’s failure to timely register certain shares, as outlined in their Stock Purchase Agreement. This waiver is granted because Stratus met the initial closing requirements for a continuous offering and is pursuing additional closings and an S-4 Exchange Offer. The agreement confirms that only penalties from March 12 and March 22, 2004, remain due, and no further penalties will be owed to Series E shareholders.

EX-10.21 6 v05471_ex10-21.txt Exhibit 10.21 July 21, 2004 VIA FAX: 212 ###-###-#### - --------------------- Mr. Christopher Janish Pinnacle Investment Partners, L.P. The Trump Building 40 Wall Street, 33rd Floor New York, NY 10005 RE: WAIVER OF SERIES E REGISTRATION PENALTIES; STRATUS SERVICES GROUP, INC. ("STRATUS") ---------------------------------------- Dear Mr. Janish: As the authorized representative of Pinnacle Investment Partners, L.P. ("Pinnacle"), the majority holder of the Series E Preferred Stock, you advised Stratus that, as Stratus satisfied the Initial Closing requirements for the Continuous Offering on July 14, 2004, in consideration continuing to pursue the additional closings for the Continuous Offering, and for also pursuing an S-4 Exchange Offer to the Series E holders, in conjunction with same, you would waive any further penalties for failure to register the shares. Specifically you advised that the Series E shareholders were willing to waive certain penalties, pursuant to Paragraph 5(b) of the Stock Purchase Agreement ("the "SPA") executed by an among Stratus and each of the respective Series E investors, for failing to timely register certain shares. Because the Initial Closing on the continuous offering was originally scheduled for July 9, 2004, and Essex & York, the underwriter, requested that the Initial Closing be held as of July 14, 2004, the Series E shareholders are willing to agree that no further penalties should be due to them. Mr. Christopher Janish July 21, 2004 Page Two By signing below, you acknowledge on behalf of the Series E shareholders the waiver of any further penalties on the Series E Preferred Stock, and acknowledge that the March 12, 2004 and/or March 22, 2004 penalties were the last penalties due and owing to the Series E. Shareholders. Very truly yours, /s/ Joseph J. Raymond ------------------------------------ Joseph J. Raymond Chief Executive Officer AGREED TO AND ACCEPTED BY: Pinnacle Investment Partners, L.P. By: /s/ Christopher Janish ----------------------------- Christopher Janish Fund Manager cc: Mr. Michael A. Maltzman Mr. Jeffrey Raymond Mr. Joseph J. Raymond, Jr. Suzette Nanovic Berrios, Esq.