Exhibit 10.21


 


 


	
   

  	
  January 16, 2004

  



 


 


	
  Via Fax:  212-480-9933

  
	
   

  
	
  Mr. Christopher Janish

  
	
  Pinnacle Investment Partners, L.P.

  
	
  The Trump Building

  
	
  40 Wall Street, 33rd Floor

  
	
  New York, NY  10005

  



 


 


Re:                             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, in consideration for Stratus continuing to pursue the filing of
an S-1 Registration Statement for a continuous offering of securities on a
“best efforts” basis, and for also pursuing an S-4 Exchange Offer to the Series
E holders, in conjunction with same, you would defer any penalties for failure
to register until January 31, 2004.


 


Specifically you advised that the Series E shareholders were willing to
defer 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.


 


The holders of 14,362 shares of Series E shares in the aggregate, which
were issued July 15, 2003, had previously agreed to defer the next penalty
measurement date which is the basis for calculation of any penalties due to
them for the Company’s failure to register such shares within 120 days of the
date thereof, i.e., November 12, 2003, and now further agree to defer same
until January 31, 2004.


 


Additionally those holders of
the remaining 22,145 shares of Series E, in the aggregate, which represent
those Series E shares still outstanding as of January 15, 2004, for which
the holders, on July 22, 2003, had received compensation through
July 22, 2003 for any penalty previously accrued, had also previously
agreed to defer the next penalty measurement date which is the basis of
calculation of any penalties due to them for the Company’s failure to register
such shares within 120 days of the date thereof, i.e., November 22, 2003,
and now further agree to defer same until January 31, 2004.


 


Moreover, Pinnacle has agreed that the Series E holders will receive
any deferred penalty monies, when and if due, as additional shares of Series E
Preferred Stock.


 

















 


By signing below, you acknowledge on behalf of the Series E
shareholders deferral of any penalties accruing until January 31, 2004,
and the payment of such penalties, if any, in Series E Preferred Stock.


 


	
   

  	
  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.

  	
   

  
						



 


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