Exhibit 4.2.12



                                WARRANT AGREEMENT


                                     BETWEEN


                          STRATUS SERVICES GROUP, INC.


                                       AND


                     AMERICAN STOCK TRANSFER & TRUST COMPANY


                            DATED AS OF JULY 14, 2004


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                                WARRANT AGREEMENT

         This Agreement, dated as of July 14, 2004, is between Stratus Services
Group, Inc., a Delaware corporation (the "Company") and American Stock Transfer
& Trust Company, a New York corporation (the "Warrant Agent").

         The Company, at or about the time that it is entering into this
Agreement, proposes to (i) issue and sell to public investors up to 12,500,000
Units (together with the additional units issuable as provided herein, the
"Units"), with each Unit consisting of one share of common stock, $0.04 par
value, of the Company and one warrant (collectively, the "Warrants") and (ii)
issue up to 32,040,000 Warrants to holders of its Series E Preferred Stock in
connection with an exchange offer it is making to the holders of its Series E
Preferred Stock and upon the conversion of the shares of Series I Preferred
Stock, if any, issued in such exchange offer. Each Warrant is exercisable to
purchase one share of Common Stock upon the terms and conditions and subject to
adjustment in certain circumstances, all as set forth in this Agreement.

         The Company wishes to retain the Warrant Agent to act on behalf of the
Company, and the Warrant Agent is willing so to act, in connection with the
issuance, transfer, exchange and replacement of the certificates evidencing the
Warrants to be issued under this Agreement (the "Warrant Certificates") and the
exercise of the Warrants.

         The Company and the Warrant Agent wish to enter into this Agreement to
set forth the terms and conditions of the Warrants and the rights of the holders
thereof ("Warrantholders") and to set forth the respective rights and
obligations of the Company and the Warrant Agent. Each Warrantholder is an
intended beneficiary of this Agreement with respect to the rights of
Warrantholders herein.

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereto agree as follows:

1.       Appointment of Warrant Agent. The Company appoints the Warrant Agent to
         act as agent for the Company in accordance with the instructions in
         this Agreement and the Warrant Agent accepts such appointment.

2.       Date, Denomination and Execution of Warrant Certificates.

         (a)      The Warrant Certificates (and the Form of Election to Purchase
                  and the Form of Assignment to be printed on the reverse
                  thereof) shall be in registered form only and shall be
                  substantially of the tenor and purport recited in Exhibit A
                  hereto, and may have such letters, numbers or other marks of
                  identification or designation and such legends, summaries or
                  endorsements printed, lithographed or engraved thereon as the
                  Company may deem appropriate and as are not inconsistent with
                  the provisions of this Agreement, or as may be required to
                  comply with any law, or with any rule or regulation made
                  pursuant thereto, or with any rule or regulation of any stock
                  exchange on which the Common Stock or the Warrants may be
                  listed or any automated quotation system, or to conform to
                  usage. Each Warrant Certificate shall entitle the registered
                  holder thereof, subject to the provisions of this Agreement


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                  and of the Warrant Certificate, to purchase, on or after July
                  14, 2005 and on or before the close of business on January 14,
                  2007 (the "Expiration Date"), one fully paid and
                  non-assessable share of Common Stock for each Warrant
                  evidenced by such Warrant Certificate for $0.76. The exercise
                  price of the Warrants (the "Exercise Price") is subject to
                  adjustments as provided in Section 6 hereof. Each Warrant
                  Certificate shall be dated the date on which the Warrant Agent
                  receives valid issuance instructions from the Company or a
                  transferring holder of a Warrant Certificate or, if such
                  instructions specify another date, such other date.

         (b)      For purposes of this Agreement, the term "close of business"
                  on any given date shall mean 5:00 p.m., Eastern time, on such
                  date; provided, however, that if such date is not a business
                  day, it shall mean 5:00 p.m., Eastern time, on the next
                  succeeding business day. For purposes of this Agreement, the
                  term "business day" shall mean any day other than a Saturday,
                  Sunday, or a day on which banking institutions in New York,
                  New York or in the State in which the Warrant Agent maintains
                  the principal office in which it conducts business related to
                  the Warrants are authorized or obligated by law to be closed.

         (c)      Each Warrant Certificate shall be executed on behalf of the
                  Company by the Chairman of the Board or its President or a
                  Vice President, either manually or by facsimile signature
                  printed thereon, which shall be attested by the Secretary or
                  an Assistant Secretary of the Company, either manually or by
                  facsimile signature. Each Warrant Certificate shall be
                  countersigned by the Warrant Agent and shall not be valid for
                  any purpose unless so countersigned. In case any officer of
                  the Company who shall have signed any Warrant Certificate
                  shall cease to be such officer of the Company before
                  countersignature by the Warrant Agent and issue and delivery
                  thereof by the Company, such Warrant Certificate,
                  nevertheless, may be countersigned by the Warrant Agent,
                  issued and delivered with the same force and effect as though
                  the person who signed such Warrant Certificate had not ceased
                  to be such officer of the Company.

3.       Subsequent Issue of Warrant Certificates. Subsequent to their original
         issuance, no Warrant Certificates shall be reissued except (i) Warrant
         Certificates issued upon transfer thereof in accordance with Section 4
         hereof, (ii) Warrant Certificates issued upon any combination, split-up
         or exchange of Warrant Certificates pursuant to Section 4 hereof, (iii)
         Warrant Certificates issued in replacement of mutilated, destroyed,
         lost or stolen Warrant Certificates pursuant to Section 5 hereof, (iv)
         Warrant Certificates issued upon the partial exercise of Warrant
         Certificates pursuant to Section 7 hereof, and (v) Warrant Certificates
         issued to reflect any adjustment or change in the Exercise Price or the
         number or kind of shares purchasable thereunder pursuant to Section 22
         hereof. The Warrant Agent is hereby irrevocably authorized to
         countersign and deliver, in accordance with the provisions of said
         Sections 4, 5, 7 and 22, the new Warrant Certificates required for
         purposes thereof, and the Company, whenever required by the Warrant
         Agent, will supply the Warrant Agent with Warrant Certificates duly
         executed on behalf of the Company for such purposes.


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4.       Transfers and Exchanges of Warrant Certificates.

         (a)      The Warrant Agent will keep or cause to be kept books for
                  registration of ownership and transfer of the Warrant
                  Certificates issued hereunder. Such registers shall show the
                  names and addresses of the respective holders of the Warrant
                  Certificates and the kind and number of Warrants evidenced by
                  each such Warrant Certificate.

         (b)      The Warrant Agent shall, from time to time, register the
                  transfer of any outstanding Warrants upon the books to be
                  maintained by the Warrant Agent for that purpose, upon
                  surrender of the Warrant Certificate evidencing such Warrants,
                  with the Form of Assignment duly filled in and executed with
                  such signature guaranteed by an eligible institution and such
                  supporting documentation as the Warrant Agent or the Company
                  may reasonably require, to the Warrant Agent at its stock
                  transfer office in New York, New York at any time on or before
                  the Expiration Date of such Warrant, and upon payment to the
                  Warrant Agent for the account of the Company of an amount
                  equal to any applicable transfer tax. Payment of the amount of
                  such tax may be made in cash, or by certified or official bank
                  check, payable in lawful money of the United States of America
                  to the order of the Company.

         (c)      Upon receipt of a Warrant Certificate, with the Form of
                  Assignment duly filled in and executed, accompanied by payment
                  of an amount equal to any applicable transfer tax, the Warrant
                  Agent shall promptly cancel the surrendered Warrant
                  Certificate and countersign and deliver to the transferee a
                  new Warrant Certificate for the number of full Warrants
                  transferred to such transferee; provided, however, that in
                  case the registered holder of any Warrant Certificate shall
                  elect to transfer fewer than all of the Warrants evidenced by
                  such Warrant Certificate, the Warrant Agent in addition shall
                  promptly countersign and deliver to such registered holder a
                  new Warrant Certificate or Certificates for the number of full
                  Warrants not so transferred.

         (d)      Any Warrant Certificate or Certificates may be exchanged at
                  the option of the holder thereof for another Warrant
                  Certificate or Certificates of different denominations, of
                  like tenor and representing in the aggregate the same kind and
                  number of Warrants, upon surrender of such Warrant Certificate
                  or Certificates, with the Form of Assignment duly filled in
                  and executed, to the Warrant Agent, at any time or from time
                  to time after the close of business on the date hereof and
                  prior to the close of business on the Expiration Date relating
                  to such Warrant. The Warrant Agent shall promptly cancel the
                  surrendered Warrant Certificate and deliver the new Warrant
                  Certificate pursuant to the provisions of this Section.

5.       Mutilated, Destroyed, Lost or Stolen Warrant Certificates. Upon receipt
         by the Company and the Warrant Agent of evidence reasonably
         satisfactory to them of the loss, theft, destruction or mutilation of
         any Warrant Certificate, and in the case of loss, theft or destruction,
         of indemnity or security reasonably satisfactory to them, and
         reimbursement to them of all reasonable expenses incidental thereto,
         and, in the case of mutilation, upon surrender and cancellation of the


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         Warrant Certificate, the Warrant Agent shall countersign and deliver a
         new Warrant Certificate of like tenor for the same kind and number of
         Warrants.

6.       Adjustments of Number and Kind of Shares Purchasable and Exercise
         Price. The number and kind of securities or other property purchasable
         upon exercise of a Warrant shall be subject to adjustment from time to
         time upon the occurrence, after the date hereof, of any of the
         following events:

         (a)      In case the Company shall (1) pay a dividend in, or make a
                  distribution of, shares of capital stock on its outstanding
                  Common Stock, (2) subdivide its outstanding shares of Common
                  Stock into a greater number of such shares or (3) combine its
                  outstanding shares of Common Stock into a smaller number of
                  such shares, the total number of shares of Common Stock
                  purchasable upon the exercise of each Warrant outstanding
                  immediately prior thereto shall be adjusted so that the holder
                  of any Warrant Certificate thereafter surrendered for exercise
                  shall be entitled to receive at the same aggregate Exercise
                  Price the number of shares of capital stock (of one or more
                  classes) which such holder would have owned or have been
                  entitled to receive immediately following the happening of any
                  of the events described above had such Warrant been exercised
                  in full immediately prior to the record date with respect to
                  such event. Any adjustment made pursuant to this Subsection
                  shall, in the case of a stock dividend or distribution, become
                  effective as of the record date therefore and, in the case of
                  a subdivision or combination, be made as of the effective date
                  thereof. If, as a result of an adjustment made pursuant to
                  this Subsection, the holder of any Warrant Certificate
                  thereafter surrendered for exercise shall become entitled to
                  receive shares of two or more classes of capital stock of the
                  Company, the Board of Directors of the Company (whose
                  determination shall be conclusive and shall be evidenced by a
                  Board resolution filed with the Warrant Agent) shall determine
                  the allocation of the adjusted Exercise Price between or among
                  shares of such classes of capital stock.

         (b)      In the event of a capital reorganization or a reclassification
                  of the Common Stock (except as provided in Subsection (a)
                  above or Subsection (d) below), any Warrantholder, upon
                  exercise of Warrants, shall be entitled to receive, in
                  substitution for the Common Stock to which he would have
                  become entitled upon exercise immediately prior to such
                  reorganization or reclassification, the shares (of any class
                  or classes) or other securities or property of the Company (or
                  cash) that he would have been entitled to receive at the same
                  aggregate Exercise Price upon such reorganization or
                  reclassification if such Warrants had been exercised
                  immediately prior to the record date with respect to such
                  event; and in any such case, appropriate provision (as
                  determined by the Board of Directors of the Company, whose
                  determination shall be conclusive and shall be evidenced by a
                  certified Board resolution filed with the Warrant Agent) shall
                  be made for the application of this Section 6 with respect to
                  the rights and interests thereafter of the Warrantholders
                  (including but not limited to the allocation of the Exercise
                  Price between or among shares of classes of capital stock), to
                  the end that this Section 6 (including the adjustments of the
                  number of shares of Common Stock or other securities


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                  purchasable and the Exercise Price thereof) shall thereafter
                  be reflected, as nearly as reasonably practicable, in all
                  subsequent exercises of the Warrants for any shares or
                  securities or other property (or cash) thereafter deliverable
                  upon the exercise of the Warrants.

         (c)      Whenever the number of shares of Common Stock or other
                  securities purchasable upon exercise of a Warrant is adjusted
                  as provided in this Section 6, the Company will promptly file
                  with the Warrant Agent a certificate signed by a Chairman or
                  co-Chairman of the Board or the President or a Vice President
                  of the Company and by the Treasurer or Chief Financial Officer
                  or an Assistant Treasurer or the Secretary or an Assistant
                  Secretary of the Company setting forth the number and kind of
                  securities or other property purchasable upon exercise of a
                  Warrant, as so adjusted, stating that such adjustments in the
                  number or kind of shares or other securities or property
                  conform to the requirements of this Section 6, and setting
                  forth a brief statement of the facts accounting for such
                  adjustments. Promptly after receipt of such certificate, the
                  Company, or the Warrant Agent at the Company's request, will
                  deliver, by first-class, postage prepaid mail, a brief summary
                  thereof (to be supplied by the Company) to the registered
                  holders of the outstanding Warrant Certificates; provided,
                  however, that failure to file or to give any notice required
                  under this Subsection, or any defect therein, shall not affect
                  the legality or validity of any such adjustments under this
                  Section 6; and provided, further, that, where appropriate,
                  such notice may be given in advance and included as part of
                  the notice required to be given pursuant to Section 12 hereof.

         (d)      In case of any consolidation of the Company with, or merger of
                  the Company into, another corporation (other than a
                  consolidation or merger which does not result in any
                  reclassification or change of the outstanding Common Stock),
                  or in case of any sale or conveyance to another corporation of
                  the property of the Company as an entirety or substantially as
                  an entirety, the corporation formed by such consolidation or
                  merger or the corporation which shall have acquired such
                  assets, as the case may be, shall execute and deliver to the
                  Warrant Agent a supplemental warrant agreement providing that
                  the holder of each Warrant then outstanding shall have the
                  right thereafter (until the expiration of such Warrant) to
                  receive, upon exercise of such Warrant, solely the kind and
                  amount of shares of stock and other securities and property
                  (or cash) receivable upon such consolidation, merger, sale or
                  transfer by a holder of the number of shares of Common Stock
                  of the Company for which such Warrant might have been
                  exercised immediately prior to such consolidation, merger,
                  sale or transfer. Such supplemental warrant agreement shall
                  provide for adjustments which shall be as nearly equivalent as
                  may be practicable to the adjustments provided in this
                  Section. The above provision of this Subsection shall
                  similarly apply to successive consolidations, mergers, sales
                  or transfers.

                  The Warrant Agent shall not be under any responsibility to
                  determine the correctness of any provision contained in any
                  such supplemental warrant agreement relating to either the
                  kind or amount of shares of stock or securities or property
                  (or cash) purchasable by holders of Warrant Certificates upon


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                  the exercise of their Warrants after any such consolidation,
                  merger, sale or transfer or of any adjustment to be made with
                  respect thereto, but subject to the provisions of Section 20
                  hereof, may accept as conclusive evidence of the correctness
                  of any such provisions, and shall be protected in relying
                  upon, a certificate of a firm of independent certified public
                  accountants (who may be the accountants regularly employed by
                  the Company) with respect thereto.

         (e)      Irrespective of any adjustments in the number or kind of
                  shares issuable upon exercise of Warrants, Warrant
                  Certificates theretofore or thereafter issued may continue to
                  express the same price and number and kind of shares as are
                  stated in the similar Warrant Certificates initially issuable
                  pursuant to this Warrant Agreement.

         (f)      The Company may retain a firm of independent public
                  accountants of recognized standing, which may be the firm
                  regularly retained by the Company, selected by the Board of
                  Directors of the Company or the Executive Committee of said
                  Board, to make any computation required under this Section,
                  and a certificate signed by such firm shall, in the absence of
                  fraud or gross negligence, be conclusive evidence of the
                  correctness of any computation made under this Section.

         (g)      For the purpose of this Section, the term "Common Stock" shall
                  mean (i) the Common Stock or (ii) any other class of stock
                  resulting from successive changes or reclassifications of such
                  Common Stock consisting solely of changes in par value, or
                  from par value to no par value, or from no par value to par
                  value. In the event that any time as a result of an adjustment
                  made pursuant to this Section, the holder of any Warrant
                  thereafter surrendered for exercise shall become entitled to
                  receive any shares of capital stock of the Company other than
                  shares of Common stock, thereafter the number of such other
                  shares so receivable upon exercise of any Warrant shall be
                  subject to adjustment from time to time in a manner and on
                  terms as nearly equivalent as practicable to the provisions
                  with respect to the Common Stock contained in this Section,
                  and all other provisions of this Agreement, with respect to
                  the Common Stock, shall apply on like terms to any such other
                  shares.

         (h)      The Company may, from time to time and to the extent permitted
                  by law, reduce the Exercise Price of the Warrants by any
                  amount for a period of not less than 20 days. If the Company
                  so reduces the Exercise Price of such Warrants, it will give
                  not less than 15 days' notice of such decrease, which notice
                  may be in the form of a press release, and shall take such
                  other steps as may be required under applicable law in
                  connection with any offers or sales of securities at the
                  reduced price.

7.       Exercise and Redemption of Warrants. Unless the Warrants have been
         redeemed as provided in this Section 7, the registered holder of any
         Warrant Certificate may exercise the Warrants evidenced thereby, in
         whole at any time or in part from time to time at or prior to the close
         of business on the Expiration Date relating to such Warrant, subject to


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         the provisions of Section 8, at which time the Warrant Certificates
         shall be and become wholly void and of no value. Warrants may be
         exercised by their holders or redeemed by the Company as follows:

         (a)      Exercise of Warrants shall be accomplished upon surrender of
                  the Warrant Certificate evidencing such Warrants, with the
                  Form of Election to Purchase on the reverse side thereof duly
                  filled in and executed, to the Warrant Agent at its stock
                  transfer office in New York, New York, together with payment
                  to the Warrant Agent on behalf of the Company of the Exercise
                  Price (as of the date of such surrender) of the Warrants then
                  being exercised and an amount equal to any applicable transfer
                  tax and, if requested by the Company, any other taxes or
                  governmental charges which the Company may be required by law
                  to collect in respect of such exercise. Payment of the
                  Exercise Price and other amounts may be made by wire transfer
                  of good funds, or by certified or bank cashier's check,
                  payable in lawful money of the United States of America to the
                  order of the Company. No adjustment shall be made for any cash
                  dividends, whether paid or declared, on any securities
                  issuable upon exercise of a Warrant.

         (b)      Upon receipt of a Warrant Certificate, with the Form of
                  Election to Purchase duly filled in and executed, accompanied
                  by payment of the Exercise Price of the Warrants being
                  exercised (and of an amount equal to any applicable taxes or
                  government charges as aforesaid), the Warrant Agent shall
                  promptly request from the Transfer Agent with respect to the
                  securities to be issued and deliver to or upon the order of
                  the registered holder of such Warrant Certificate, in such
                  name or names as such registered holder may designate, a
                  certificate or certificates for the number of full shares of
                  the securities to be purchased, together with cash made
                  available by the Company pursuant to Section 8 hereof in
                  respect of any fraction of a share of such securities
                  otherwise issuable upon such exercise. If the Warrant is then
                  exercisable to purchase property other than securities, the
                  Company shall take appropriate steps to cause such property to
                  be delivered to or upon the order of the registered holder of
                  such Warrant Certificate. In addition, if it is required by
                  law and upon instruction by the Company, the Warrant Agent
                  will deliver to each Warrantholder a prospectus which complies
                  with the provisions of Section 9 of the Securities Act of 1933
                  and the Company agrees to supply Warrant Agent with sufficient
                  number of prospectuses to effectuate that purpose.

         (c)      In case the registered holder of any Warrant Certificate shall
                  exercise fewer than all of the Warrants evidenced by such
                  Warrant Certificate, the Warrant Agent shall promptly
                  countersign and deliver to the registered holder of such
                  Warrant Certificate, or to his duly authorized assigns, a new
                  Warrant Certificate or Certificates evidencing the number of
                  Warrants that were not so exercised.

         (d)      Each person in whose name any certificate for securities is
                  issued upon the exercise of Warrants shall for all purposes be
                  deemed to have become the holder of record of the securities
                  represented thereby as of, and such certificate shall be
                  dated, the date upon which the Warrant Certificate was duly
                  surrendered in proper form and payment of the Exercise Price


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                  (and of any applicable taxes or other governmental charges)
                  was made; provided, however, that if the date of such
                  surrender and payment is a date on which the stock transfer
                  books of the Company are closed, such person shall be deemed
                  to have become the record holder of such shares as of, and the
                  certificate for such shares shall be dated, the next
                  succeeding business day on which the stock transfer books of
                  the Company are open (whether before, on or after the
                  Expiration Date relating to such Warrant) and the Warrant
                  Agent shall be under no duty to deliver the certificates for
                  such shares until such date. The Company covenants and agrees
                  that it shall not cause its stock transfer books to be closed
                  for a period of more than 20 consecutive business days except
                  upon consolidation, merger, sale of all or substantially all
                  of its assets, dissolution or liquidation or as otherwise
                  provided by law.

         (e)      The Warrants outstanding at the time of a redemption may be
                  redeemed at the option of the Company, in whole or in part on
                  a pro-rata basis, by giving not less than 30 days prior notice
                  as provided in Section 7(f) below, which notice may not be
                  given before, but may be given at any time after, the last
                  reported sale price of the Common Stock on the principal
                  exchange or quotation system on which it is then traded or
                  quoted has equaled or exceeded $1.33 per share (subject to
                  appropriate adjustments as provided herein) on each of twenty
                  (20) consecutive trading days that occur subsequent to the one
                  year anniversary of the date of this Warrant Agreement;
                  provided, however, that the Company may not exercise its right
                  to redeem the Warrants if it is not then in compliance with
                  Section 9 of this Agreement. The price at which Warrants may
                  be redeemed (the "Redemption Price") is $.08 per Warrant
                  (subject to appropriate adjustments as provided herein). On
                  and after the redemption date the holders of record of
                  redeemed Warrants shall be entitled to payment of the
                  Redemption Price upon surrender of such redeemed Warrants to
                  the Company at the office of the Warrant Agent designated for
                  that purpose.

         (f)      Notice of redemption of Warrants shall be given at least 30
                  days prior to the redemption date by mailing a copy of such
                  notice to the Warrant Agent and to all of the holders of
                  record of Warrants at their respective addresses appearing on
                  the books or transfer records of the Company or such other
                  address designated in writing by the holder of record to the
                  Warrant Agent not less than 40 days prior to the redemption
                  date.

         (g)      From and after the redemption date, all rights of the
                  Warrantholders (except the right to receive the Redemption
                  Price) shall terminate, but only if (i) no later than one day
                  prior to the redemption date the Company shall have
                  irrevocably deposited with the Warrant Agent as paying agent a
                  sufficient amount to pay on the redemption date the Redemption
                  Price for all Warrants called for redemption and (ii) the
                  notice of redemption shall have stated the name and address of
                  the Warrant Agent and the intention of the Company to deposit
                  such amount with the Warrant Agent no later than one day prior
                  to the redemption date.


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         (h)      On the Redemption Date, the Warrant Agent shall pay to the
                  holders of record of redeemed Warrants all monies received by
                  the Warrant Agent for the redemption of Warrants to which the
                  holders of record of such redeemed Warrants who shall have
                  surrendered their Warrants are entitled. The Warrant Agent
                  shall have no obligation to pay for the redemption of the
                  Warrants except to the extent that funds for such payment have
                  been provided to it by the Company.

         (i)      Any amounts deposited with the Warrant Agent that are not
                  required for redemption of Warrants may be withdrawn by the
                  Company. Any amounts deposited with the Warrant Agent that
                  shall be unclaimed after six months after the redemption date
                  shall be redelivered back to the Company, and thereafter the
                  holders of the Warrants called for redemption or which such
                  funds were deposited shall look solely to the Company for
                  payment. The Company shall be entitled to the interest, if
                  any, on funds deposited with the Warrant Agent and the holders
                  of redeemed Warrants shall have no right to any such interest.
                  At the instruction of the Company, the Warrant Agent shall
                  deposit or invest any and all funds deposited with it by the
                  Company in connection with any redemption in federally
                  insured, interest bearing accounts with the financial
                  institution or institutions typically used by the Warrant
                  Agent for such purpose, and the Warrant Agent shall have no
                  liability with respect to the performance of any such
                  investments other than, in the case of funds deposited in
                  accounts maintained by the Warrant Agent, the liability of the
                  Warrant Agent to its depositors in such accounts, generally.

         (j)      If the Company fails to make a sufficient deposit with the
                  Warrant Agent as provided above, the holder of any Warrants
                  called for redemption may at the option of the holder (i) by
                  notice to the Company declare the notice of redemption a
                  nullity as to such holder, or (ii) maintain an action against
                  the Company for the Redemption Price. If the holder brings
                  such an action, the Company will pay reasonable attorneys'
                  fees of the holder. If the holder fails to bring an action
                  against the Company for the Redemption Price within 60 days
                  after the redemption date, the holder shall be deemed to have
                  elected to declare the notice of redemption to be a nullity as
                  to such holder and such notice shall be without any force or
                  effect as to such holder. Except as otherwise specifically
                  provided in this Section 7(j), a notice of redemption, once
                  mailed by the Company as provided in Section 7(f) shall be
                  irrevocable.

8.       Fractional Interests. The Company shall not be required to issue any
         Warrant Certificate evidencing a fraction of a Warrant or to issue
         fractions of shares of securities on the exercise of the Warrants. If
         any fraction (calculated to the nearest one-hundredth) of a Warrant or
         a share of securities would, except for the provisions of this Section,
         be issuable on the exercise of any Warrant, the Company shall, at its
         option, either purchase such fraction for an amount in cash equal to
         the current value of such fraction computed on the basis of the closing
         market price (as quoted on the OTC Bulletin Board or other principal
         quotation system or exchange on which the Common Stock is quoted or
         traded) on the trading day immediately preceding the day upon which
         such Warrant Certificate was surrendered for exercise in accordance
         with Section 7 hereof or issue the required fractional Warrant or


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         share. By accepting a Warrant Certificate, the holder thereof expressly
         waives any right to receive a Warrant Certificate evidencing any
         fraction of a Warrant or to receive any fractional share of securities
         upon exercise of a Warrant, except as expressly provided in this
         Section 8.

9.       Reservation and Registration of Equity Securities. The Company
         covenants that it will at all times reserve and keep available, free
         from any preemptive rights, out of its authorized and unissued equity
         securities, solely for the purpose of issue upon exercise of the
         Warrants, such number of shares of equity securities of the Company as
         shall then be issuable upon the exercise of all outstanding Warrants
         ("Equity Securities"). The Company covenants that all Equity Securities
         which shall be so issuable shall, upon such issue, be duly authorized,
         validly issued, fully paid and non-assessable.

         The Company covenants that if any equity securities, required to be
         reserved for the purpose of issue upon exercise of the Warrants
         hereunder, require registration with or approval of any governmental
         authority under any federal or state law before such shares may be
         issued upon exercise of Warrants, the Company will use all commercially
         reasonable efforts to cause such securities to be duly registered, or
         approved, as the case may be, and, to the extent practicable, take all
         such action in anticipation of and prior to the exercise of the
         Warrants, including, without limitation, filing or maintaining an
         appropriate registration statement, necessary to permit a public
         offering of the securities underlying the Warrants at any and all times
         during the term of this Agreement, provided, however, that in no event
         shall such securities be issued, and the Company is authorized to
         refuse to honor the exercise of any Warrant, if such exercise would
         result in the opinion of the Company's Board of Directors, upon advice
         of counsel, in the violation of any law.

10.      Reduction of Conversion Price Below Par Value. Before taking any action
         that would cause an adjustment pursuant to Section 6 hereof reducing
         the portion of the Exercise Price required to purchase one share of
         capital stock below the then par value (if any) of a share of such
         capital stock, the Company will use its best efforts to take any
         corporate action which, in the opinion of its counsel, may be necessary
         in order that the Company may validly and legally issue fully paid and
         non-assessable shares of such capital stock.

11.      Payment of Taxes. The Company covenants and agrees that it will pay
         when due and payable any and all federal and state documentary stamp
         and other original issue taxes which may be payable in respect of the
         original issuance of the Warrant Certificates, or any shares of Common
         Stock or other securities upon the exercise of Warrants. The Company
         shall not, however, be required (a) to pay any tax which may be payable
         in respect of any transfer involved in the transfer and delivery of
         Warrant Certificates or the issuance or delivery of certificates for
         Common Stock or other securities in a name other than that of the
         registered holder of the Warrant Certificate surrendered for purchase
         or (b) to issue or deliver any certificate for shares of Common Stock
         or other securities upon the exercise of any Warrant Certificate until
         any such tax shall have been paid, all such tax being payable by the
         holder of such Warrant Certificate at the time of surrender.


                                       11
<PAGE>

12.      Notice of Certain Corporate Action. In case the Company after the date
         hereof shall propose (a) to offer to the holders of Common Stock,
         generally, rights to subscribe to or purchase any additional shares of
         any class of its capital stock, any evidences of its indebtedness or
         assets, or any other rights or options or (b) to effect any
         reclassification of Common Stock (other than a reclassification
         involving merely the subdivision or combination of outstanding shares
         of Common Stock) or any capital reorganization, or any consolidation or
         merger to which the Company is a party and for which approval of any
         stockholders of the Company is required, or any sale, transfer or other
         disposition of its property and assets substantially as an entirety, or
         the liquidation, voluntary or involuntary dissolution or winding-up of
         the Company, then, in each such case, the Company shall file with the
         Warrant Agent and the Company, or the Warrant Agent on its behalf,
         shall mail (by first-class, postage prepaid mail) to all registered
         holders of the Warrant Certificates notice of such proposed action,
         which notice shall specify the date on which the books of the Company
         shall close or a record be taken for such offer of rights or options,
         or the date on which such reclassification, reorganization,
         consolidation, merger, sale, transfer, other disposition, liquidation,
         voluntary or involuntary dissolution or winding-up shall take place or
         commence, as the case may be, and which shall also specify any record
         date for determination of holders of Common Stock entitled to vote
         thereon or participate therein and shall set forth such facts with
         respect thereto as shall be reasonably necessary to indicate any
         adjustments in the Exercise Price and the number or kind of shares or
         other securities purchasable upon exercise of Warrants which will be
         required as a result of such action. Such notice shall be filed and
         mailed in the case of any action covered by clause (a) above, at least
         ten days prior to the record date for determining holders of the Common
         Stock for purposes of such action or, if a record is not to be taken,
         the date as of which the holders of shares of Common Stock of record
         are to be entitled to such offering; and, in the case of any action
         covered by clause (b) above, at least 20 days prior to the earlier of
         the date on which such reclassification, reorganization, consolidation,
         merger, sale, transfer, other disposition, liquidation, voluntary or
         involuntary dissolution or winding-up is expected to become effective
         and the date on which it is expected that holders of shares of Common
         Stock of record on such date shall be entitled to exchange their shares
         for securities or other property deliverable upon such
         reclassification, reorganization, consolidation, merger, sale,
         transfer, other disposition, liquidation, voluntary or involuntary
         dissolution or winding-up.

         Failure to give any such notice or any defect therein shall not affect
         the legality or validity of any transaction listed in this Section 12.

13.      Disposition of Proceeds on Exercise of Warrant Certificate, etc. The
         Warrant Agent shall account promptly to the Company with respect to
         Warrants exercised and concurrently pay to the Company all moneys
         received by the Warrant Agent for the purchase of securities or other
         property through the exercise of such Warrants.

         The Warrant Agent shall keep copies of this Agreement available for
         inspection by Warrantholders during normal business hours at its stock
         transfer office. Copies of this Agreement may be obtained upon written
         request addressed to the Warrant Agent at its stock transfer office in
         New York, New York.


                                       12
<PAGE>

14.      Warrantholder Not Deemed a Stockholder. No Warrantholder, as such,
         shall be entitled to vote, receive dividends or be deemed the holder of
         Common Stock or any other securities of the Company which may at any
         time be issuable on the exercise of the Warrants represented thereby
         for any purpose whatever, nor shall anything contained herein or in any
         Warrant Certificate be construed to confer upon any Warrantholder, as
         such, any of the rights of a stockholder of the Company or any right to
         vote for the election of directors or upon any matter submitted to
         stockholders at any meeting thereto, or to give or withhold consent to
         any corporate action (whether upon any recapitalization, issuance of
         stock, reclassification of stock, change of par value or change of
         stock to no par value, consolidation, merger, conveyance or otherwise),
         or to receive notice of meetings or other actions affecting
         stockholders (except as provided in Section 12 hereof), or to receive
         dividend or subscription rights, or otherwise, until such Warrant
         Certificate shall have been exercised in accordance with the provisions
         hereof and the receipt of the Exercise Price and any other amounts
         payable upon such exercise by the Warrant Agent.

15.      Right of Action. All rights of action in respect to this Agreement are
         vested in the respective registered holders of the Warrant
         Certificates; and any registered holder of any Warrant Certificate,
         without the consent of the Warrant Agent or of any other holder of a
         Warrant Certificate, may, in his own behalf for his own benefit,
         enforce, and may institute and maintain any suit, action or proceeding
         against the Company suitable to enforce, or otherwise in respect of,
         his right to exercise the Warrants evidenced by such Warrant
         Certificate, for the purchase of shares of the Common Stock in the
         manner provided in the Warrant Certificate and in this Agreement.

16.      Agreement with Holders of Warrant Certificates. Every holder of a
         Warrant Certificate by accepting the same consents and agrees with the
         Company, the Warrant Agent and with every other holder of a Warrant
         Certificate that:

         (a)      the Warrant Certificates are transferable on the registry
                  books of the Warrant Agent only upon the terms and conditions
                  set forth in this Agreement; and

         (b)      the Company and the Warrant Agent may deem and treat the
                  person in whose name the Warrant Certificate is registered as
                  the absolute owner of the Warrant (notwithstanding any
                  notation of ownership or other writing thereon made by anyone
                  other than the Company or the Warrant Agent) for all purposes
                  whatever and neither the Company nor the Warrant Agent shall
                  be affected by any notice to the contrary.

17.      Cancellation of Warrant Certificates. In the event that the Company
         shall purchase or otherwise acquire any Warrant Certificate or
         Certificates after the issuance thereof, such Warrant Certificate or
         Certificates shall thereupon be delivered to the Warrant Agent and be
         canceled by it and retired. The Warrant Agent shall also cancel any
         Warrant Certificate delivered to it for exercise, in whole or in part,
         or delivered to it for transfer, split-up, combination or exchange.
         Warrant Certificates so canceled shall be maintained in accordance with
         the regulations of the Securities and Exchange Commission.


                                       13
<PAGE>

18.      Concerning the Warrant Agent. The Company agrees to pay to the Warrant
         Agent from time to time, on demand of the Warrant Agent, reasonable
         compensation for all services rendered by it hereunder and also its
         reasonable expenses, including counsel fees, and other disbursements
         incurred in the administration and execution of this Agreement and the
         exercise and performance of its duties hereunder. The Company also
         agrees to indemnify the Warrant Agent for, and to hold it harmless
         against, any loss, liability or expense (including the reasonable fees
         and expenses of a single counsel to the Warrant Agent), incurred
         without gross negligence, bad faith or willful misconduct on the part
         of the Warrant Agent, arising out of or in connection with the
         acceptance and administration of this Agreement.

19.      Merger or Consolidation or Change of Name of Warrant Agent. Any
         corporation into which the Warrant Agent may be merged or with which it
         may be consolidated, or any corporation resulting from any merger or
         consolidation to which the Warrant Agent shall be a party, or any
         corporation succeeding to the corporate trust business of the Warrant
         Agent, shall be the successor to the Warrant Agent hereunder without
         the execution or filing of any paper or any further act on the part of
         any of the parties hereto, provided that such corporation would be
         eligible for appointment as a successor warrant agent under the
         provisions of Section 21 hereof. In case at the time such successor to
         the Warrant Agent shall succeed to the agency created by this
         Agreement, any of the Warrant Certificates shall have been
         countersigned but not delivered, any such successor to the Warrant
         Agent may adopt the countersignature of the original Warrant Agent and
         deliver such Warrant Certificates so countersigned; and in case at that
         time any of the Warrant Certificates shall not have been countersigned,
         any successor to the Warrant Agent may countersign such Warrant
         Certificates either in the name of the predecessor Warrant Agent or in
         the name of the successor Warrant Agent; and in all such cases such
         Warrant Certificates shall have the full force provided in the Warrant
         Certificates and in this Agreement.

         In case at any time the name of the Warrant Agent shall be changed and
         at such time any of the Warrant Certificates shall have been
         countersigned but not delivered, the Warrant Agent may adopt the
         countersignature under its prior name and deliver Warrant Certificates
         so countersigned; and in case at that time any of the Warrant
         Certificates shall not have been countersigned, the Warrant Agent may
         countersign such Warrant Certificates either in its prior name or in
         its changed name; and in all such cases such Warrant Certificates shall
         have the full force provided in the Warrant Certificates and in this
         Agreement.

20.      Duties of Warrant Agent. The Warrant Agent undertakes the duties and
         obligations imposed by this Agreement upon the following terms and
         conditions, by all of which the Company and the holders of Warrant
         Certificates, by their acceptance thereof, shall be bound:

         (a)      The Warrant Agent may consult with counsel satisfactory to it
                  (who may be counsel for the Company), and the opinion of such
                  counsel shall be full and complete authorization and
                  protection to the Warrant Agent as to any action taken,
                  suffered or omitted by it in good faith and in accordance with
                  such opinion; provided, however, that the Warrant Agent shall


                                       14
<PAGE>

                  have exercised reasonable case in the selection of such
                  counsel. Fees and expenses of such counsel, to the extent
                  reasonable, shall be paid by the Company.

         (b)      Whenever in the performance of its duties under this
                  Agreement, the Warrant Agent shall deem it necessary or
                  desirable that any fact or matter be proved or established by
                  the Company prior to taking or suffering any action hereunder,
                  such fact or matter (unless other evidence in respect thereof
                  be herein specifically prescribed) may be deemed to be
                  conclusively proved and established by the Company prior to
                  taking or suffering any action hereunder, such fact or matter
                  (unless other evidence in respect thereof be herein
                  specifically prescribed) may be deemed to be conclusively
                  proved and established by a certificate signed by a Chairman
                  or co-Chairman of the Board or the President or a Vice
                  President or the Secretary of the Company and delivered to the
                  Warrant Agent; and such certificate shall be full
                  authorization to the Warrant Agent for any action taken or
                  suffered in good faith by it under the provisions of this
                  Agreement in reliance upon such certificate.

         (c)      The Warrant Agent shall be liable hereunder only for its own
                  gross negligence, bad faith or willful misconduct.

         (d)      The Warrant Agent shall not be liable for or by reason of any
                  of the statements of fact or recitals contained in this
                  Agreement or in the Warrant Certificates (except its
                  countersignature on the Warrant Certificates and such
                  statements or recitals as describe the Warrant Agent or action
                  taken or to be taken by it) or be required to verify the same,
                  but all such statements and recitals are and shall be deemed
                  to have been made by the Company only.

         (e)      The Warrant Agent shall not be under any responsibility in
                  respect of the validity of this Agreement or the execution and
                  delivery hereof (except the due execution hereof by the
                  Warrant Agent) or in respect of the validity or execution of
                  any Warrant Certificate (except its countersignature thereof);
                  nor shall it be responsible for any breach by the Company of
                  any covenant or condition contained in this Agreement or in
                  any Warrant Certificate; nor shall it be responsible for the
                  making of any change in the number of shares of Common Stock
                  for which a Warrant is exercisable required under the
                  provisions of Section 6 or responsible for the manner, method
                  or amount of any such change or the ascertaining of the
                  existence of facts that would require any such adjustment or
                  change (except with respect to the exercise of Warrant
                  Certificates after actual notice of any adjustment of the
                  Exercise Price); nor shall it by any act hereunder be deemed
                  to make any representation or warranty as to the authorization
                  or reservation of any shares of Common Stock to be issued
                  pursuant to this Agreement or any Warrant Certificate or as to
                  whether any shares of Common Stock will, when issued, be
                  validly issued, fully paid and non-assessable.

         (f)      The Warrant Agent shall be under no obligation to institute
                  any action, suit or legal proceeding or take any other action
                  likely to involve expense unless the Company or one or more


                                       15
<PAGE>

                  registered holders of Warrant Certificates shall furnish the
                  Warrant Agent with reasonable security and indemnity for any
                  costs and expenses which may be incurred. All rights of action
                  under this Agreement or under any of the Warrants may be
                  enforced by the Warrant Agent without the possession of any of
                  the Warrants or the production thereof at any trial or other
                  proceeding relative thereto, and any such action, suit or
                  proceeding instituted by the Warrant Agent shall be brought in
                  its name as Warrant Agent, and any recovery of judgment shall
                  be for the ratable benefit of the registered holders of the
                  Warrant Certificates, as their respective rights or interests
                  may appear.

         (g)      The Warrant Agent and any stockholder, director, officer or
                  employee of the Warrant Agent may buy, sell or deal in any of
                  the Warrants or other securities of the Company or become
                  pecuniarily interested in any transaction in which the Company
                  may be interested, or contract with or lend money to or
                  otherwise act as fully and freely as though it were not
                  Warrant Agent under this Agreement. Nothing herein shall
                  preclude the Warrant Agent from acting in any other capacity
                  for the Company or for any other legal entity.

         (h)      The Warrant Agent is hereby authorized and directed to accept
                  instructions with respect to the performance of its duties
                  hereunder from a Chairman or co-Chairman of the Board or
                  President or a Vice President or the Secretary of the Company,
                  and to apply to such officers for advice or instructions in
                  connection with the Warrant Agent's duties, and it shall not
                  be liable for any action taken or suffered or omitted by it in
                  good faith in accordance with instructions of any such
                  officer.

         (i)      The Warrant Agent will not be responsible for any failure of
                  the Company to comply with any of the covenants contained in
                  this Agreement or in the Warrant Certificates to be complied
                  with by the Company.

         (j)      The Warrant Agent may execute and exercise any of the rights
                  or powers hereby vested in it or perform any duty hereunder
                  either itself or by or through its attorneys, agents or
                  employees and the Warrant Agent shall not be answerable or
                  accountable for any act, default, neglect or misconduct of any
                  such attorneys, agents or employees or for any loss to the
                  Company resulting from such neglect or misconduct; provided,
                  however, that reasonable care shall have been exercised in the
                  selection and continued employment of such attorneys, agents
                  and employees.

         (k)      The Warrant Agent will not incur any liability or
                  responsibility to the Company or to any holder of any Warrant
                  Certificate for any action taken, or any failure to take
                  action, in reliance on any notice, resolution, waiver,
                  consent, order, certificate or other paper, document or
                  instrument reasonably believed by the Warrant Agent to be
                  genuine and to have been signed, sent or presented by the
                  proper party or parties.


                                       16
<PAGE>

         (l)      The Warrant Agent will act hereunder solely as agent of the
                  Company in a ministerial capacity, and its duties will be
                  determined solely by the provisions hereof. The Warrant Agent
                  will not be liable for anything which it may do or refrain
                  from doing in connection with this Agreement except for its
                  own gross negligence, bad faith or willful misconduct.

21.      Change of Warrant Agent. The Warrant Agent may resign and be discharged
         from its duties under this Agreement upon 30 days' prior notice in
         writing mailed, by registered or certified mail, to the Company. The
         Company may remove the Warrant Agent or any successor warrant agent
         upon 30 days' prior notice in writing, mailed to the Warrant Agent or
         successor warrant agent, as the case may be, by registered or certified
         mail. If the Warrant Agent shall resign or be removed or shall
         otherwise become incapable of acting, the Company shall appoint a
         successor to the Warrant Agent and shall, within 15 days following such
         appointment, give notice thereof in writing to each registered holder
         of the Warrant Certificates. If the Company shall fail to make such
         appointment within a period of 15 days after giving notice of such
         removal or after it has been notified in writing of such resignation or
         incapacity by the resigning or incapacitated Warrant Agent, then the
         Company agrees to perform the duties of the Warrant Agent hereunder
         until a successor Warrant Agent is appointed. After appointment and
         execution of a copy of this Agreement in effect at that time, the
         successor Warrant Agent shall be vested with the same powers, rights,
         duties and responsibilities as if it had been originally named as
         Warrant Agent without further act or deed; but the former Warrant Agent
         shall deliver and transfer to the successor Warrant Agent, within a
         reasonable time, any property at the time held by it hereunder, and
         execute and deliver any further assurance, conveyance, act or deed
         necessary for the purpose. Failure to give any notice provided for in
         this Section, however, or any defect therein shall not affect the
         legality or validity of the resignation or removal of the Warrant Agent
         or the appointment of the successor warrant agent, as the case may be.

22.      Issuance of New Warrant Certificates. Notwithstanding any of the
         provisions of this Agreement or the several Warrant Certificates to the
         contrary, the Company may, at its option, issue new Warrant
         Certificates in such form as may be approved by its Board of Directors
         to reflect any adjustment or change in the Exercise Price or the number
         or kind of shares purchasable under the several Warrant Certificates
         made in accordance with the provisions of this Agreement.

23.      Notices. Notice or demand pursuant to this Agreement to be given or
         made on the Company by the Warrant Agent or by the registered holder of
         any Warrant Certificate shall be sufficiently given or made if sent by
         first-class or registered mail, postage prepaid, addressed (until
         another address is filed in writing by the Company with the Warrant
         Agent) as follows:

                           Stratus Services Group, Inc.
                           500 Craig Road, 2nd Floor
                           Manalapan, New Jersey  07726
                           Attention:  Chief Financial Officer


                                       17
<PAGE>

         Subject to the provisions of Section 21, any notice pursuant to this
         Agreement to be given or made by the company or by the holder of any
         Warrant Certificate to or on the Warrant Agent shall be sufficiently
         given or made if sent by first-class or registered mail, postage
         prepaid, addressed (until another address is filed in writing by the
         Warrant Agent with the Company) as follows:

                           American Stock Transfer & Trust Company
                           59 Maiden Lane
                           Plaza Level
                           New York, New York  10038

         Any notice or demand authorized to be given or made to the registered
         holder of any Warrant Certificate under this Agreement shall be
         sufficiently given or made if sent by first-class or registered mail,
         postage prepaid, to the last address of such holder as it shall appear
         on the registers maintained by the Warrant Agent.

24.      Modification of Agreement. The Warrant Agent may, without the consent
         or concurrence of the Warrantholders, by supplemental agreement or
         otherwise, concur with the Company in making any changes or corrections
         in this Agreement that the Warrant Agent shall have been advised by
         counsel (who may be counsel for the Company) are necessary or desirable
         to cure any ambiguity or to correct any defective or inconsistent
         provision or clerical omission or mistake or manifest error herein
         contained, or to make any other provisions in regard to matters or
         questions arising hereunder and which shall not be inconsistent with
         the provisions of the Warrant Certificates and which shall not
         adversely affect the interests of the Warrantholders. As of the date
         hereof, this Agreement contains the entire and only agreement,
         understanding, representation, condition, warranty or covenant between
         the parties hereto with respect to the matters herein, supersedes any
         and all other agreements between the parties hereto relating to such
         matters, and may be modified or amended only by a written agreement
         signed by both parties hereto pursuant to the authority granted by the
         first sentence of this Section.

25.      Successors. All the covenants and provisions of this Agreement by or
         for the benefit of the Company or the Warrant Agent shall bind and
         inure to the benefit of their respective successors and assigns
         hereunder.

26.      Delaware Contract. This Agreement and each Warrant Certificate issued
         hereunder shall be deemed to be a contract made under the laws of the
         State of Delaware and for all purposes shall be construed in accordance
         with the laws of said State.

27.      Termination. This Agreement shall terminate as of the close of business
         on the Expiration Date, or such earlier date upon which all Warrants
         shall have been exercised or redeemed, except that the Warrant Agent
         shall account to the Company as to all Warrants outstanding and all
         cash held by it as of the close of business on the Expiration Date. The
         provisions of Sections 18 and 20 of this Agreement shall survive the
         termination of this Agreement.


                                       18
<PAGE>

28.      Benefits of this Agreement. Nothing in this Agreement or in the Warrant
         Certificates shall be construed to give to any person or corporation
         other than the Company, the Warrant Agent, and their respective
         successors and assigns hereunder and the registered holders of the
         Warrant Certificates any legal or equitable right, remedy or claim
         under this Agreement; but this Agreement shall be for the sole and
         exclusive benefit of the Company, the Warrant Agent, their respective
         successors and assigns hereunder and the registered holders of the
         Warrant Certificates.

29.      Descriptive Headings. The descriptive headings of the several Sections
         of this Agreement are inserted for convenience only and shall not
         control or affect the meaning or construction of any of the provisions
         hereof.

30.      Counterparts. This Agreement may be executed in any number of
         counterparts, each of which shall be an original, but such counterparts
         shall together constitute one and the same instrument.

       Remainder of page intentionally left blank; signature page follows)



                                       19
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.

                                         STRATUS SERVICES GROUP, INC.


                                      By: /s/ Joseph J. Raymond
                                          ----------------------------
                                    Name: Joseph J. Raymond
                                   Title: CEO

                                         AMERICAN STOCK TRANSFER & TRUST COMPANY


                                      By: /s/ Wilbert Nyles
                                          ----------------------------
                                    Name: Wilbert Nyles
                                   Title: Vice President




                                       20
<PAGE>

                                    EXHIBIT A

               VOID AFTER 5 P.M. EASTERN TIME ON January 14, 2007

                        WARRANTS TO PURCHASE COMMON STOCK

                               __________ Warrants

W -                        STRATUS SERVICES GROUP, INC.

                                CUSIP __________

THIS CERTIFIES THAT

or registers assigns, is the registered holder of the number of Warrants
("Warrants") set forth above. Each Warrant, unless and until redeemed by the
Company as provided in the Warrant Agreement, hereinafter more fully described
(the " Warrant Agreement") entitles the holder thereof to purchase from Stratus
Services Group, Inc., a corporation incorporated under the laws of the State of
Delaware ("Company"), subject to the terms and conditions set forth hereinafter
and in the Warrant Agreement, at any time on or after July 14, 2005 and before
the close of business on January 14, 2007 ("Expiration Date"), one fully paid
and non-assessable share of Common Stock, $0.04 par value, of the Company
("Common Stock") upon presentation and surrender of this Warrant Certificate,
with the instructions for the registration and delivery of Common Stock filled
in, at the stock transfer office in New York, New York, of American Stock
Transfer & Trust Company, Warrant Agent of the Company ("Warrant Agent") or of
its successor warrant agent or, if there be no successor warrant agent, at the
corporate offices of the Company, and upon payment of the Exercise Price (as
defined in the Warrant Agreement) and any applicable taxes paid either in cash,
or by certified or official bank check, payable in lawful money of the United
States of America to the order of the Company. Each Warrant initially entitles
the holder to purchase one share of Common Stock for $0.76 (subject to
appropriate adjustments as provided in the Warrant Agreement). The number and
kind of securities or other property for which the Warrants are exercisable are
subject to adjustment in certain events, such as mergers, splits, stock
dividends, splits and the like, to prevent dilution. The Company may redeem any
or all outstanding and unexercised warrants by giving not less than 30 days
prior notice at any time after the last reported sale price of the Common Stock
on the principal exchange on which it is traded has equaled or exceeded $1.33
per share (subject to appropriate adjustments as provided in the Warrant
Agreement) on each of twenty (20) consecutive trading days subsequent to July
14, 2005. The Redemption Price is $0.08 (subject to appropriate adjustments as
provided in the Warrant Agreement) per Warrant. All Warrants not theretofore
exercised will expire on the Expiration Date.

         This Warrant Certificate is subject to all of the terms, provisions and
conditions of the Warrant Agreement, dated as of July 14, 2004, between the
Company and the Warrant Agent, to all of which terms, provisions and conditions
the registered holder of this Warrant Certificate consents by acceptance hereof.
The Warrant Agreement is incorporated herein by reference and made a part hereof
and reference is made to the Warrant Agreement for a full description of the
rights, limitations of rights, obligations, duties and immunities of the Warrant
Agent, the Company and the holders of the Warrant Certificates. Copies of the
Warrant Agreement are available for inspection at the stock transfer office of

<PAGE>

the Warrant Agent or may be obtained upon written request addressed to the
Company at Stratus Services Group, Inc., 500 Craig Road, 2nd Floor, Manalapan,
New Jersey 07726, Attention: Chief Financial Officer.

         The Company shall not be required upon the exercise of the Warrants
evidenced by this Warrant Certificate to issue fractions of Warrants, Common
Stock or other securities, but shall make adjustment therefore in cash on the
basis of the current market value of any fractional interest as provided in the
Warrant Agreement.

         In certain cases, the sale of securities by the Company upon exercise
of Warrants would violate the securities laws of the United States, certain
states thereof or other jurisdictions. The Company has agreed to use all
commercially reasonable efforts to cause a registration statement to continue to
be effective during the term of the Warrants with respect to such sales under
the Securities Act of 1933, and to take such action under the laws of various
states as may be required to cause the sale of securities upon exercise to be
lawful. However, the Company will not be required to honor the exercise of
Warrants if, in the opinion of the Board of Directors, upon advice of counsel,
the sale of securities upon such exercise would be unlawful. In certain cases,
the Company may, but is not required to, purchase Warrants submitted for
exercise for a cash price equal to the difference between the market price of
the securities obtainable upon such exercise and the exercise price of such
Warrants.

         This Warrant Certificate, with or without other Certificates, upon
surrender to the Warrant Agent, any successor warrant agent or, in the absence
of any successor warrant agent, at the corporate offices of the Company, may be
exchanged for another Warrant Certificate or Certificates evidencing in the
aggregate the same number of Warrants as the Warrant Certificate or Certificates
so surrendered. If the Warrants evidenced by this Warrant Certificate shall be
exercised in part, the holder hereof shall be entitled to receive upon surrender
hereof another Warrant Certificate or Certificates evidencing the number of
Warrants not so exercised.

         No holder of this Warrant Certificate, as such, shall be entitled to
vote, receive dividends or be deemed the holder of Common Stock or any other
securities of the Company which may at any time be issuable on the exercise
hereof for any purpose whatever, nor shall anything contained in the Warrant
Agreement or herein be construed to confer upon the holder of this Warrant
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof or give or withhold consent to any corporate
action (whether upon any matter submitted to stockholders at any meeting
thereof, or give or withhold consent to any merger, recapitalization, issuance
of stock, reclassification of stock, change of par value or change of stock to
no par value, consolidation, conveyance or otherwise) or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Warrant Agreement) or to receive dividends or subscription rights or otherwise
until the Warrants evidenced by this Warrant Certificate shall have been
exercised and the Common Stock purchasable upon the exercise thereof shall have
become deliverable as provided in the Warrant Agreement.

         If this Warrant Certificate shall be surrendered for exercise within
any period during which the transfer books for the Company's Common Stock or
other class of stock purchasable upon the exercise of the Warrants evidenced by
this Warrant Certificate are closed for any purpose, the Company shall not be


                                       2
<PAGE>

required to make delivery of certificates for shares purchasable upon such
transfer until the date of the reopening of said transfer books.

         Every holder of this Warrant Certificate by accepting the same consents
and agrees with the Company, the Warrant Agent, and with every other holder of a
Warrant Certificate that:

         (a)      this Warrant Certificate is transferable on the registry books
                  of the Warrant Agent only upon the terms and conditions set
                  forth in the Warrant Agreement, and

         (b)      the Company and the Warrant Agent may deem and treat the
                  person in whose name this Warrant Certificate is registered as
                  the absolute owner hereof (notwithstanding any notation of
                  ownership or other writing thereon made by anyone other than
                  the Company or the Warrant Agent) for all purposes whatever
                  and neither the Company nor the Warrant Agent shall be
                  affected by any notice to the contrary. The Company shall not
                  be required to issue or deliver any certificate for shares of
                  Common Stock or other securities upon the exercise of Warrants
                  evidenced by this Warrant Certificate until any tax which may
                  be payable in respect thereof by the holder of this Warrant
                  Certificate pursuant to the Warrant Agreement shall have been
                  paid, such tax being payable the holder of this Warrant
                  Certificate at the time of surrender.

         This Warrant Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Warrant Agent.

      (Remainder of page intentionally left blank; signature page follows)


                                       3
<PAGE>



         WITNESS the facsimile signatures of the proper officers of the Company
and its corporate seal.

Dated: _______________

ATTEST:                                        Stratus Services Group, Inc.


                                           By:
------------------------------------           ---------------------------------
Name:                                    Name:
Title: Secretary                        Title:


Countersigned:

By:
    --------------------------------
      (Authorized Officer)



                                       4
<PAGE>

================================================================================
                     [TO BE PRINTED ON BACK OF CERTIFICATE]

                          FORM OF ELECTION TO PURCHASE

The undersigned holder hereby exercises the right to purchase __________ of the
shares of common stock (the "Warrant Shares") of STRATUS SERVICES GROUP, INC., a
Delaware corporation (the "Company"), evidenced by the attached Warrant (the
"Warrant"). Capitalized terms used herein and not otherwise defined have the
respective meanings set forth in the Warrant.

1.       Payment of Warrant Exercise Price. The holder has paid in connection
         with this exercise the sum of $_________ to the Company in accordance
         with the terms of the Warrant.

2.       Delivery of Warrant Shares. The Company shall deliver to the holder
         __________ Warrant Shares in accordance with the terms of the Warrant.

Dated:  ____________________

                                              ----------------------------------
                                                 (Name of Registered Holder)




                                          By:
                                              ----------------------------------
                                        Name:
                                       Title:


                               FORM OF ASSIGNMENT

FOR VALUE RECEIVED, the undersigned does hereby assign and transfer to
__________, Federal Identification No. __________, a warrant to purchase
__________ shares of the common stock of STRATUS SERVICES GROUP, INC., a
Delaware corporation, represented by warrant certificate no. _______, standing
in the name of the undersigned on the books of said corporation. The undersigned
does hereby irrevocably constitute and appoint __________, attorney to transfer
the warrants of said corporation, with full power of substitution in the
premises.

Dated:  ____________________

                                              ----------------------------------
                                                 (Name of Registered Holder)




                                          By:
                                              ----------------------------------
                                        Name:
                                       Title: