Document:

EXHIBIT

4.1.8

 

	

  PREFERRED STOCK

  	

   

  	

  PREFERRED STOCK

  
	

  NUMBER

  	

   

  	

  SHARES

  

 

[STRATUS SERVICES GROUP,

INC. LOGO]

 

INCORPORATED UNDER THE

LAWS OF THE STATE OF DELAWARE

 

STRATUS SERVICES GROUP,

INC.

 

50,000 SHARES SERIES E

PREFERRED STOCK, PAR VALUE $0.01

 

This Certifies that

 

 

 

is the owner of

 

 

FULLY PAID AND

NON-ASSESSABLE SHARES OF THE CAPITAL STOCK

 

OF THE ABOVE NAMED

CORPORATION

 

transferable on the books of the Corporation by the holder hereof in

person or by duly authorized Attorney upon surrender of this certificate

properly endorsed.

 

IN WITNESS WHEREOF, the said Corporation has caused this Certificate to

be signed by its duly authorized officers and its Corporate Seal to be hereunto

affixed this         day

of              A.D.

20  

 

	

  [STRATUS SERVICES

  GROUP, INC. Corporate Seal]

  
	

   

  	

   

  	

   

  
	

  /s/ MICHAEL A. MALTZMAN

  	

   

  	

   

  	

  /s/ JOSEPH J.RAYMOND

  	

   

  
	

  TREASURER

  	

   

  	

  CHAIRMAN AND CHIEF EXECUTIVE OFFICER

  
					

 

 

EXPLANATION OF

ABBREVIATIONS

 

The following abbreviations, when used in the

inscription on the face of this certificate, shall be construed as if they were

written out in full according to applicable laws or regulations.  Abbreviations, in addition to those

appearing below, may be used.

 

 

	

  JT TEN – as joint tenants with right of survivorship

  and not as tenants in common

  	

   

  	

  TEN ENT – as tenants by the entireties

  
	

   

  	

   

  	

   

  
	

  TEN COM – as tenants in common Custodian

  	

   

  	

  UNIF GIFT MIN ACT – Uniform Gifts to Minors Act

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  CUST – Custodian for

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  UNIF TRANS MIN ACT – Uniform Transfers to Minors Act

  

 

FOR VALUE RECEIVED,

                     

hereby sell, assign and transfer unto

 

PLEASE INSERT SOCIAL SECURITY OR OTHER

    IDENTIFYING NUMBER OF

ASSIGNEE

 

 

 

 

                                                                                                                                                      Shares

represented by the within Certificate, and do hereby irrevocably constitute and

appoint

 

 

                                                                                                                                         

Attorney to transfer the said shares on the books to the within named

Corporation with full power of substitution in the premises.

 

Dated:                                      

20        

 

In the presence of

 

X

______________________________________

 

X ______________________________________

 

 

CERTIFICATE

 

FOR

 

 

SHARES

 

OF

 

 

ISSUED TO

 

___________________________

 

DATED

 

___________________________EXHIBIT

4.1.9

 

	

  PREFERRED STOCK

  	

   

  	

  PREFERRED STOCK

  
	

  NUMBER

  	

   

  	

  SHARES

  

 

[STRATUS SERVICES GROUP,

INC. LOGO]

 

INCORPORATED UNDER

THE LAWS OF THE STATE OF DELAWARE

 

 

STRATUS SERVICES GROUP,

INC.

 

20,000 SHARES

SERIES F PREFERRED STOCK, PAR VALUE $0.01

 

This Certifies that

 

 

 

is the owner of

 

 

FULLY PAID AND

NON-ASSESSABLE SHARES OF THE CAPITAL STOCK

 

OF THE ABOVE NAMED

CORPORATION

 

transferable on the books of the Corporation by the holder hereof in

person or by duly authorized Attorney upon surrender of this certificate

properly endorsed.

 

IN WITNESS WHEREOF, the said Corporation has caused this Certificate to

be signed by its duly authorized officers and its Corporate Seal to be hereunto

affixed this         day of              A.D. 20   

 

	

  [STRATUS SERVICES

  GROUP, INC. Corporate Seal]

  
	

   

  
	

  /s/ MICHAEL A. MALTZMAN

  	

   

  	

   

  	

  /s/ JOSEPH J.RAYMOND

  	

   

  
	

  TREASURER

  	

   

  	

  CHAIRMAN AND CHIEF EXECUTIVE OFFICER

  

 

 

EXPLANATION OF

ABBREVIATIONS

 

The following abbreviations, when used in the

inscription on the face of this certificate, shall be construed as if they were

written out in full according to applicable laws or regulations.  Abbreviations, in addition to those

appearing below, may be used.

 

	

  JT TEN – as joint tenants with right of

  survivorship and not as tenants in common

  	

   

  	

  TEN ENT – as tenants by the entireties

  
	

   

  	

   

  	

   

  
	

  TEN COM – as tenants in common Custodian

  	

   

  	

  UNIF GIFT MIN ACT – Uniform Gifts to Minors Act

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  CUST – Custodian for

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

  UNIF TRANS MIN ACT – Uniform Transfers to Minors Act

  

 

 

 

FOR VALUE RECEIVED,

                                                     

hereby sell, assign and transfer unto

 

PLEASE INSERT SOCIAL SECURITY OR OTHER

    IDENTIFYING NUMBER OF

ASSIGNEE

 

 

 

                                                                                                                                                        Shares

represented by the within Certificate, and do hereby irrevocably constitute

and                    appoint

 

 

                                                                                                                                                 

Attorney to transfer the said shares on the books to the within named

Corporation with full power of substitution in the premises.

 

Dated:                                       

20    

 

In the presence of

X

______________________________________

 

X

______________________________________

 

CERTIFICATE

 

FOR

 

SHARES

 

OF

 

ISSUED TO

 

___________________________

 

DATED

 

___________________________Exhibit 4.1.10

 

AGREEMENT TO EXCHANGE SERIES B PREFERRED

SHARES

FOR SERIES E PREFERRED SHARES

 

THIS AGREEMENT,

dated as of July 19, 2002, is entered into by and between STRATUS SERVICES GROUP, INC., a Delaware

corporation, with headquarters located at 500 Craig Road, Suite 201, Manalapan,

New Jersey 07726 (the “Company”) and Pinnacle Investment Partners, L.P., a New

York limited partnership, with headquarters c/o Delta Asset Management, The

Trump Tower, 40 Wall Street, 33rd Floor, New York, New York 10005 (“Pinnacle”).

 

WITNESSETH:

 

WHEREAS, on March

11, 2002, the Company entered into a certain Agreement to Cancel Secured

Promissory Note and Pledge Agreement and to Exchange Such Secured Promissory

Note and Certain Debentures for Preferred Shares (the “Note Exchange

Agreement”) and a Securities Purchase Agreement (the “Purchase Agreement”),

whereby Pinnacle, in the aggregate, purchased $300,000 and exchanged $400,000

of the Secured Note and $456,499 of Debentures for an aggregate of 231,300

shares of Series B Preferred Stock; and

 

WHEREAS, the Company

has, on June 18, 2002 redeemed 91,000 shares of such Series B Preferred Stock,

leaving a balance of 140,300 shares; and

 

WHEREAS, the Company

also owes Pinnacle certain monies for dividends and penalties due and owing on

such Preferred Stock in the total amount of $41,790, and Pinnacle wishes to,

instead of receiving cash for such accrued dividends and penalties, exchange

same for additional Series E stock; and

 

WHEREAS, Pinnacle is

desirous of exchanging the remaining 140,300 shares of Series B Preferred

Stock, plus $41,790 in accrued dividends and penalties for a Series E preferred

stock equity interest in the Company, the terms of such preferred stock (the

“Series E Preferred Stock”) being substantially in the form of the Certificate

of Designation attached as Exhibit A hereto.

 

NOW, THEREFORE, in

consideration for the foregoing, the parties hereto agree as follows:

 

1.                    Pinnacle’s

140,300 shares of Series B Preferred Stock in the principal amount of $701,500

will be exchanged on July 19, 2002 for 7,015 shares of Series E Preferred

Stock, $.01 par value per share and

 

accrued dividends thereon

as of June 30, 2002 and penalties and fees due to Pinnacle, all in the

aggregate amount of $41,790 be exchanged for 418 shares of Series E

Preferred Stock;

 

2.                    If

Series E Preferred Stock is to be issued in the name of an entity other than

Pinnacle, Pinnacle will pay all transfer taxes payable with respect

thereto.  No fee will be charged to

Pinnacle for the exchange except for such transfer taxes, if any.

 

3.                    As

set forth in Items 5c and 5f below, the Series E Preferred Stock cannot be

converted into Common Stock until the Company’s proposal to amend its Amended

and Restated Certificate of Incorporation to increase the number of authorized

shares of Common Stock to 100,000,000 is approved.  In the event that the same is not approved by the stockholders

within one hundred and twenty (120) days from the date hereof, then the Series

E Preferred Stock shall become immediately redeemable, in cash.

 

4.                   Pinnacle’s

Representations, Warranties, Etc.; Access To Information; Independent

Investigation.  Pinnacle

represents and warrants to, and covenants and agrees with, the Company as

follows:

 

a.                    Pinnacle

is exchanging the Series B Preferred Stock and accrued dividends and penalties

for the Series E Preferred Stock for its own account for investment only and

not with a view towards the public sale or distribution thereof and not with a

view to or for sale in connection with any distribution thereof.

 

b.                   Pinnacle

is (i) an “accredited investor” as that term is defined in Rule 501 of the

General Rules and Regulations under the 1933 Act by reason of Rule 501(a)(3),

and (ii) experienced in making investments of the kind described in this Agreement

and the related documents, (iii) able, by reason of the business and financial

experience of its officers (if an entity) and professional advisors (who are

not affiliated with or compensated in any way by the Company or any of its

affiliates or selling agents), to protect its own interests in connection with

the transactions described in this Agreement, and the related documents, and

(iv) able to afford the entire loss of its investment in the Preferred.

 

c.                    Pinnacle

understands that the 140,300 shares of Series B Preferred Stock, plus accrued

dividends and penalties totaling $41,790 are being exchanged for the Series E

Preferred Stock

 

2

 

and the 7,433 shares of Series E Preferred

Stock are being purchased in reliance on specific exemptions from the

registration requirements of United States federal and state securities laws

and that the Company is relying upon the truth and accuracy of, and Pinnacle’s

compliance with, the representations, warranties, agreements, acknowledgements

and understandings of Pinnacle set forth herein in order to determine the

availability of such exemptions and the eligibility of Pinnacle to acquire the

Preferred Stock.

 

d.                   Pinnacle

and its advisors, if any, have been furnished with all materials relating to

the business, finances and operations of the Company and materials relating to

the exchange of the Series B Preferred Stock and the issuance of Series E

Preferred Stock which have been requested by Pinnacle.  Pinnacle and its advisors, if any, have been

afforded the opportunity to ask questions of the Company and have received

complete and satisfactory answers to any such inquiries;

 

e.                    Pinnacle

understands that no United States federal or state agency or any other

government or governmental agency has passed on or made any recommendation or

endorsement of the Series E Preferred Shares.

 

f.                      This

Agreement has been duly and validly authorized, executed and delivered on

behalf of Pinnacle and is a valid and binding agreement of Pinnacle enforceable

in accordance with its terms, subject as to enforceability to general

principles of equity and to bankruptcy, insolvency, moratorium and other

similar laws affecting the enforcement of creditors’ rights generally.

 

5.             Company Representations,

Etc.  The Company

represents and warrants to Pinnacle that:

 

a.                    Concerning

the Common Stock.  There are no preemptive rights of any

stockholder of the Company, as such, to acquire the Company’s Series E

Preferred.

 

b.                   Reporting

Company Status.  The Company is a corporation duly organized,

validly existing and in good standing under the laws of the State of Delaware,

and has the requisite corporate power to own its properties and to carry on its

business as now being conducted.  The

Company is duly qualified as a foreign corporation to do business and is in

good standing in each jurisdiction where the nature of the business conducted

or property owned by it makes such qualification necessary other than those

jurisdictions in which the failure to so qualify would not

 

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have a material

and adverse effect on the business, operations, properties, prospects or

condition (financial or otherwise) of the Company.  The Company has registered its Common Stock pursuant to

Section 12 of the Securities Exchange Act of 1934, as amended (the “1934 Act”),

and the Common Stock is listed and traded on the OTC Bulletin Board Market.

 

c.                    Authorized

Shares.  Upon the Company obtaining stockholder

approval to increase its authorized shares of Common Stock to 100,000,000, the

shares of Common Stock issuable upon conversion of the Series E Preferred Stock

will be duly authorized and, when issued to Pinnacle, will be duly and validly

issued, fully paid and non-assessable and will not subject the holder thereof

to personal liability by reason of being such holder.

 

d.                   Conversion

Agreement.  This Agreement and the transactions

contemplated hereby, have been duly and validly authorized by the Company.  This Agreement has been duly executed and

delivered by the Company and is a valid and binding agreement of the Company

enforceable in accordance with its terms, subject as to enforceability to

general principles of equity and to bankruptcy, insolvency, moratorium, and

other similar laws affecting the enforcement of creditors’ rights generally.

 

e.                    Non-contravention. 

The execution and delivery of this Agreement by the Company, the

issuance of the Series E Preferred Stock, and the consummation by the Company

of the other transactions contemplated by this Agreement do not and will not

conflict with or result in a breach by the Company of any of the terms or

provisions of, or constitute a default under (i) the articles of incorporation

or by-laws of the Company, (ii) any indenture, mortgage, deed of trust, or

other material agreement or instrument to which the Company is a party or by

which it or any of its properties or assets are bound, (iii) to its knowledge,

any existing applicable law, rule, or regulation or any applicable decree, judgment,

or (iv) to its knowledge, order of any court, United States federal or state

regulatory body, administrative agency, or other governmental body having

jurisdiction over the Company or any of its properties or assets, except such

conflict, breach or default which would not have a material adverse effect on

the transactions contemplated herein. The Company is not in violation of any

material laws,

 

4

 

governmental

orders, rules, regula­tions or ordinances to which its  property, real, personal, mixed, tangible or

intangible,  or its businesses related

to such properties, are subject.

 

f.                      Approvals. 

No authorization, approval or consent of any court, governmental body,

regulatory agency, self-regulatory organization, or stock exchange or market is

required to be obtained by the Company for the issuance and sale of the Series

E Preferred Stock to Pinnacle as contemplated by this Agreement, except such

authorizations, approvals and consents that have been obtained, and except for

the stockholder approval needed to increase the Company’s authorized shares of

Common Stock to 100,000,000 to insure that there are sufficient shares of

Common Stock underlying the Series E Preferred Stock upon conversion.

 

g.                   SEC

Documents, Financial Statements.  The Common Stock of the Company is

registered pursuant to Section 12(g) of the 1934 Act and the Company has filed

all reports, schedules, forms, statements and other documents required to be

filed by it with the SEC pursuant to the reporting requirements of the Exchange

Act, including material filed pursuant to Section 13(a) or 15(d), in addition

to one or more registration statements and amendments thereto heretofore filed

by the Company with the SEC under the Act (all of the foregoing including

filings incorporated by reference therein being referred to herein as the “SEC

Documents”).  The Company, through its

agent, has delivered to Pinnacle true and complete copies of the SEC Documents

(except for exhibits and incorporated documents).  The Company has not provided to Pinnacle any information which,

according to applicable law, rule or regulation, should have been disclosed

publicly by the Company but which has not been so disclosed, other than with

respect to the transactions contemplated by this Agreement.

 

As of their respective dates, the SEC Documents complied in all

material respects with the requirements of the Act or the Exchange Act as the

case may be and the rules and regulations of the SEC promulgated thereunder and

other federal, state and local laws, rules and regulations applicable to such

SEC Documents, and none of the SEC Documents contained any untrue statement of

a material fact or omitted to state a material fact required to be stated

therein or necessary in order to make the statements therein, in light of the

circumstances under which

 

5

 

they were

made, not misleading.  The financial

statements of the Company included in the SEC Documents comply as to form in all

material respects with applicable accounting requirements and the published

rules and regulations of the SEC or other applicable rules and regulations with

respect thereto.  Such financial

statements have been prepared in accordance with generally accepted accounting

principles applied on a consistent basis during the periods involved (except

(i) as may be otherwise indicated in such financial statements or the notes

thereto or (ii) in the case of unaudited interim statements, to the extent they

may not include footnotes or may be condensed or summary statements) and fairly

present in all material respects the financial position of the Company as of

the dates thereof and the results of operations and cash flows for the periods

then ended (subject, in the case of unaudited statements, to normal year-end

audit adjustments).

 

h.                   Absence

of Certain Changes.  Since March 31, 2002, there has been no

material adverse change and no material adverse development in the business,

properties, operations, financial condition, or results of operations of the

Company.

 

i.                       Full

Disclosure.  There is no fact known to the Company (other

than general economic conditions known to the public generally) or as disclosed

in the documents referred to in Section 2(g), that has not been disclosed in

writing to Pinnacle that (i) would reasonably be expected to have a material

adverse effect on the business or financial condition of the Company or (ii)

would reasonably be expected to materially and adversely affect the ability of

the Company to perform its obligations pursuant to this Agreement.

 

6.             Certain Covenants

And Acknowledgments.

 

a.                    Filings.  The Company undertakes and agrees to make

all necessary filings in connection with the exchange of the Series E Preferred

Stock to Pinnacle under any United States laws and regulations, or by any

domestic securities exchange or trading market, and to provide a copy thereof

to Pinnacle promptly after such filing.

 

b.                   Reporting

Status.  So long as Pinnacle

beneficially owns any of the Series E Preferred Stock, the Company shall file

all reports required to be filed with the SEC pursuant to Section 13 or 15(d)

 

6

 

of the 1934

Act,  and the Company shall not

terminate its status as an issuer required to file reports under the 1934 Act

even if the 1934 Act or the rules and regulations thereunder would permit such

termination.       

 

7.             Covenant to

Register.

 

a.       

For purposes of this Section, the

following definitions shall apply:

 

i.      The terms “register”, “registered”

and “registration” refer to a registration under the 1933 Act, effected by

preparing and filing a registration statement or similar document in compliance

with the 1933 Act, and the declaration or ordering of effectiveness of such

registration statement, document or amendment thereto.

 

ii.     The term “Registrable

Securities” means the Series E Preferred Stock, and any securities of the

Company or securities of any successor corporation issued as or issuable upon

the conversion or exercise of any warrant, right or other security that is

issued as a dividend or other distribution with respect to, or in exchange for,

or in replacement of, the Series E Preferred Stock.

 

iii.    The term “holder of

Registrable Securities” means Pinnacle and any permitted assignee of

registration rights pursuant to Section 7(g).

 

b.       i.                  The Company

shall use its best efforts to prepare and file a registration statement on Form

S-1 within sixty (60) days of the date hereof and cause such registration

statement to become effective as soon as possible, but no later than one

hundred and twenty (120) days from the date of this Agreement.

 

ii.     The Company may suspend,

on no more than two (2) occasions per twelve-month period, the effectiveness of

any registration effected pursuant to this Subsection (b) in the event and for

such period of time as, such a suspension is required by the rules and

regulations of the Securities and Exchange Commission (“SEC”).  The Company will use its best efforts to cause

such suspension to terminate at the earliest possible date.

 

iii.    If a registration

statement covering all Registrable Securities is not effective by one hundred

and twenty (120) days after the date of this Agreement (the “Target Date”), the

 

7

 

Company shall pay Pinnacle as liquidated damages an amount equal to

fifteen percent (15%) of the total Purchase price of the Series E Preferred

Stock.  Thereafter, the Company will pay

additional penalty payments of fifteen percent (15%) of the purchase price of

the Series E Preferred Stock for every successive one hundred and twenty (120)

day period that a registration statement has still not been declared

effective.  Each such payment shall be

made to Pinnacle by cashier’s check or wire transfer in immediately available

funds to such account as shall be designated in writing by Pinnacle.

 

c.       

Whenever required under this Section 7 to

effect the registration of any Registrable Securities, the Company shall, as

expeditiously as reasonably possible:

 

i.      Prepare and file with the

SEC a registration statement or amendment thereto with respect to such

Registrable Securities and use its best efforts to cause such registration to

become effective as provided in Section 7(b)(i) hereof, and keep such

registration statement effective for so long as any holder of Registrable

Securities desires to dispose of the securities covered by such registration

statement; provided, however, that in no event shall the Company be required to

keep the registration statement effective for a period greater than three (3)

years from the closing date;

 

ii.     Prepare and file with the

SEC such amendments and supplements to such registration statement and the

prospectus used in connection with such registration statement as may be

necessary to comply with the provisions of the 1933 Act with respect to the

disposition of all securities covered by such registration statement and notify

the holders of the filing and effectiveness of such Registration statement and

any amendments or supplements;

 

iii.     

Furnish to Pinnacle such numbers of

copies of a current prospectus, including preliminary prospectus, conforming

with the requirements of the 1933 Act, copies of the registration statement any

amendment or supplement to any thereof and any documents incorporated by

reference therein, and such other documents as Pinnacle may reasonably require

in order to facilitate the disposition of the shares of Common Stock issuable

 

8

under the Series E

Preferred Stock;

 

iv.     

Use its best efforts to register and

qualify the securities covered by such registration statement under such other

securities or “Blue Sky” laws of such jurisdictions as shall be reasonably

requested by Pinnacle;

 

v.      

Notify Pinnacle immediately of the happening

of any event as a result of which the prospectus included in such registration

statement, as then in effect, includes an untrue statement of material fact or

omits to state a material fact required to be stated therein or necessary to

make the statements therein not misleading in light of the circumstances then

existing, and use its best efforts to promptly update and/or correct such

prospectus.

 

d.       Upon

request of the Company, Pinnacle will furnish to the Company in connection with

any registration under this Section such information regarding itself, the

securities of the Company held by it, and the intended method of disposition of

such securities as shall be reasonably required to affect the registration of

the  securities held by Pinnacle.

 

e.       

                                                i.      To the fullest extent permitted by law,

the Company shall indemnify, defend and hold harmless Pinnacle and each holder

of Registrable Securities which are included in a registration statement and

each of its officers, directors, employees, agents, partners or controlling

persons (within the meaning of the 1933 Act) (each, an “indemnified party”)

from and against, and shall reimburse such indemnified party with respect to,

any and all claims, suits, demands, causes of action, losses, damages,

liabilities, costs or expenses (“Liabilities”) to which such indemnified party

may become subject under the 1933 Act or otherwise, arising from or relating to

(A) any untrue statement or alleged untrue statement of any material fact

contained in such registration statement, any prospectus contained therein or

any amendment or supplement thereto, or (B) the omission or alleged omission to

state therein a material fact required to be stated therein or necessary to

make the statements therein, in light of the circumstances in which they were

made, not misleading; provided, however, that

the Company shall not be liable in any such case to the extent that any such

Liability arises out of or is based upon an untrue statement or

 

9

omission so made

in strict conformity with information furnished by such indemnified party in

writing specifically for use in the registration statement.

 

ii.     In the event of any

registration under the 1933 Act of Registrable Securities, Pinnacle agrees to

indemnity, defend and hold harmless the Company, and its officers, directors,

employees, agents, partners, or controlling persons (within the meaning of the

1933 Act) (each, an “indemnified party”) from and against, and shall reimburse

such indemnified party with respect to, any and all Liabilities to which such

indemnified party may become subject under the 1933 Act or otherwise, arising

from or relating to (A) any untrue statement or alleged untrue statement of any

material fact contained in such registration statement, any prospectus

contained therein or any amendment or supplement thereto, or (B) the omission

or alleged omission to state therein a material fact required to be stated

therein or necessary to make the statements therein, in light of the circumstances

in which they were made, not misleading;  provided, that  Pinnacle will be liable in any such case to the extent and

only to the extent, that any such Liability arises out of or is based upon an

untrue statement or alleged untrue statement or omission or alleged omission

made in such registration statement, prospectus or amendment or supplement

thereto in reliance upon and in conformity with written information furnished

by Pinnacle specifically for use in the preparation thereof, and such Liability

may in no event exceed the value of the Registrable Securities so registered.

 

iii.    Promptly after receipt by

any indemnified party of notice of the commencement of any action, such

indemnified party shall, if a claim in respect thereof is to be made against another

party (the “indemnifying party”) hereunder, notify such party in writing

thereof, but the omission so to notify such party shall not relieve such party

from any Liability which it may have to the indemnified party other than under

this Section and shall only relieve it from any Liability which it may have to

the indemnified party under this Section if and to the extent an indemnifying

party is materially prejudiced by such omission.  In case any such action shall be brought against any indemnified

party and such indemnified

 

10

 

party shall notify an indemnifying party of the commencement thereof,

the indemnifying party shall be entitled to participate in and, to the extent

it shall wish, to assume and undertake the defense thereof with counsel

reasonably satisfactory to such indemnified party, and, after notice from the

indemnifying party to the indemnified party of its election so to assume and

undertake the defense thereof, the indemnifying party shall not be liable to

the indemnified party under this Section for any legal expenses subsequently

incurred by the indemnified party in connection with the defense thereof other

than reasonable costs of investigation and of liaison with counsel so selected;

provided, however, that if the

defendants in any such action include both parties and the indemnified party

shall have reasonably concluded that there may be reasonable defenses available

to them which are different from or additional to those available to the

indemnifying party or if the interests of the indemnified party reasonably may

be deemed to conflict with the interests of the indemnifying party, the

indemnified party shall have the right to select a separate counsel and to

assume such legal defenses and otherwise to participate in the defense of such

action, with the reasonable expenses and fees of one such separate counsel and

other reasonable expenses related to such participation to be reimbursed by the

indemnifying party as incurred.

 

f.        

With respect to the above-referenced

registration statement, all fees, costs and expenses of and incidental to such

registration, inclusion and public offering shall be borne by the Company;

provided, however, that any security holders participating in such registration

shall bear their pro-rata share of the underwriting discounts and commission,

if any, incurred by them in connection with registration.

 

g.       The

rights to cause the Company to register all or any portion of securities

pursuant to this Section 7 may be assigned by Pinnacle to a proper transferee

or assignee as described herein.  Within

a reasonable time after such transfer, Pinnacle shall notify the Company of the

name and address of such transferee or assignee, and the securities with

respect to which such registration rights are being assigned.  Such assignment shall be effective only if,

 

11

 

(i) Pinnacle agrees in writing with the transferee or assignee to

assign such rights, and a copy of such agreement is furnished to the Company

within a reasonable time after such transfer or assignment (subject to the

purchase price of the shares being kept confidential by Pinnacle and such

transferee or assignee, (ii) the Company 

is, within a reasonable time after such transfer or assignment,

furnished with written notice of (A) the name and address of such transferee or

assignee, (B) the securities with respect to which such registration rights are

being assigned, (iii) following such transfer or assignment, the further

disposition of the Registrable Securities by the transferee or assignee is

restricted under the 1933 Act and applicable state securities laws, (iv) at or

before the time that the Company receives the written notice contemplated by

clause (ii) of this sentence the transferee or assignee agrees in writing with

the Company to be bound by all of the provisions contained herein, (v) such

transfer shall have been made in accordance with the applicable requirements of

the purchase agreement covering the transaction and (vi) such transferee shall

be an “accredited investor”, as that term is defined in Rule 501 of Regulation

D, promulgated under the 1933 Act.

 

8.         Governing Law:  Miscellaneous.  This Agreement shall be governed by and

interpreted in accordance with the laws of the State of New York.  A facsimile transmission of this signed

Agreement shall be legal and binding on all parties hereto.  This Agreement may be signed in one or more

counterparts, each of which shall be deemed an original.  The headings of this Agreement are for

convenience of reference and shall not form part of, or affect the

interpretation of, this Agreement.  If

any provision of this Agreement shall be invalid or unenforceable in any

jurisdiction, such invalidity or unenforceability shall not affect the validity

or enforceability of the remainder of this Agreement or the validity or

enforceability of this Agreement in any other jurisdiction.  This Agreement may be amended only by an

instrument in writing signed by the party to be charged with enforcement.  This Agreement, and the related agreements

referred to herein, contain the entire agreement of the parties with respect to

the subject matter hereto, superceding all prior agreements, understandings or

discussions.

 

12

 

9.         Notices.  Any notice required or permitted hereunder

shall be given in writing (unless otherwise specified herein) and shall be

deemed effectively given, (i) on the date delivered, (a) by personal delivery,

or (b) if advance copy is given by fax, (ii) seven  business days after deposit in the United States Postal Service

by regular or certified mail, or (iii) three business days mailing by

international express courier, with postage and fees prepaid, addressed to each

of the other parties thereunto entitled at the following addresses, or at such

other addresses as a party may designate by ten days advance written notice to

each of the other parties hereto.

 

	

   

  	

  COMPANY:

  	

   

  	

  STRATUS

  SERVICES GROUP, INC.

  
	

   

  	

   

  	

   

  	

  500 Craig

  Road, Suite 201

  
	

   

  	

   

  	

   

  	

  Manalapan,

  NJ 07726

  
	

   

  	

   

  	

   

  	

  Attn:

  Suzette Nanovic Berrios, Esq.

  
	

   

  	

   

  	

   

  	

  Telecopier

  No.: (732)294-1133

  
	

   

  	

   

  	

   

  	

   

  
	

   

  	

  PINNACLE:

  	

   

  	

  PINNACLE

  INVESTMENT PARTNERS, L.P.

  
	

   

  	

   

  	

   

  	

  The Trump

  Building

  
	

   

  	

   

  	

   

  	

  40 Wall

  Street, 33rd Floor

  
	

   

  	

   

  	

   

  	

  New York,

  New York 10005

  
	

   

  	

   

  	

   

  	

  Attn: Mr.

  Chris Janish

  
	

   

  	

   

  	

   

  	

  Telecopier

  No.: (212) 480-9933

  

 

10.  Successors And Assigns.  This Agreement shall be binding upon and

inure to the benefit of the parties hereto and their respective successors and

permitted assigns.

 

IN WITNESS WHEREOF,

the Company and Pinnacle have caused this Agreement to be executed by their

duly authorized representatives on the date as first written above.

 

	

  STRATUS SERVICES GROUP, INC.

  	

   

  	

  PINNACLE INVESTMENT PARTNERS, L.P.

  
	

   

  	

   

  	

  By: PIP

  Management, Inc., General Partner

  
	

   

  	

   

  	

   

  
	

  By:

  	

  /s/ Michael

  A. Maltzman

  	

   

  	

   

  	

  By:

  	

  /s/ Chris

  Janish

  	

   

  
	

  Name:

  Michael Maltzman

  	

   

  	

  Name:  Chris Janish

  	

   

  
	

  Title:   Chief Financial Officer

  	

   

  	

  Title:    President

  	

   

  
							

 

13

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