Exhibit 10.37


    


    


    


    August
      15, 2005

    


    


    Mr.
      Ronald Shapss, CEO

    Humana
      Trans Services Holding Corp.

    4400
      Route 9 South

    Freehold,
      NJ 07728

    


    


    Re: Stratus
      Services Group, Inc. (“Stratus” or “Company”); Letter of
      Intent

    


    Dear
      Mr.
      Shapss:

    


    Please
      let this serve as a Letter of Intent (the “LOI”) between Stratus and Humana
      Trans Service Holding Corp. (“Humana”) relative to Humana and Stratus entering
      into a Management Agreement whereby Humana will provide certain management,
      financial, strategic and marketing advisory services to Stratus, along with,
      inter alia, a bridge financing of $500,000, and the employment by Stratus of
      Ron
      Shapss as CEO and Jim Zimbler as Executive Vice President for Business
      Development (the “Management Transaction”).

    


    The
      terms
      of the Management Transaction shall be in substantially the form of the
      Management Agreement, Compensation Agreement of Ron Shapss, Compensation
      Agreement of James Zimbler, Promissory Note and Security Agreement previously
      distributed to the Company’s and Humana’s respective Boards and currently being
      discussed among the parties, along with such other ancillary documents as shall
      be necessary to document and complete the Management Transaction (the
“Management Transaction Documents”).

    


    The
      entering into of the Management Transaction is subject to the following
      conditions:

    


    1. Humana
      will provide a Bridge Loan in the amount of $500,000 to the Company, by
      September 2, 2005;

    2. Humana
      will, by August 26, 2005, provide new receivable financing or some other line
      of
      credit for the Company to replace the Company’s current line of credit, or work
      out satisfactory forbearance or other accommodation with the Company’s current
      lender, Capital Temp Funds, Inc. until such time as Humana completes the
      receivables financing, for which Humana will have received a binding
      commitment.

    


    3. All
      other
      items of the Management Transaction shall be negotiated in good faith with
      the
      intent of completing the Management Transaction within the spirit of the intent
      of this Letter of Intent and in compliance with any laws or
      regulations.

    4. Confidentiality.
      Each
      party hereto shall keep this Letter of Intent and the proposed terms of the
      Transaction described herein confidential, and no party hereto shall disclose
      this Letter of Intent or any terms to third parties, unless agreed to by both
      parties or otherwise required by law.

     

    4.1.
      Definition.
      This
      Agreement shall apply to all Confidential Information disclosed by either party
      to the other party. “Confidential Information” means nonpublic information
      designated by either party as being confidential or which, under the
      circumstances surrounding disclosure, ought to be treated as confidential.
      Confidential Information includes but is not limited to any written information,
      tangible materials and documents provided by either party to the other,
      including documents provided at the time of this Agreement which may be
      initialed, dated and attached hereto.

     

    4.2.
      Exceptions.
      Confidential Information shall not include any information that (a) is already
      known to the receiving party without an obligation of confidentiality at the
      time of this disclosure, (b) becomes publicly available through no wrongful
      act
      of the receiving party, (c) is rightfully received from a third party without
      restriction on disclosure or without breach of an obligation to the disclosing
      party, (d) is independently developed by the receiving party, (e) is approved
      for release by written authorization of the disclosing party, or (f) is
      disclosed pursuant to a requirement of a governmental agency or of
      law.

     

    4.3.
      Nondisclosure.
      The
      receiving party agrees to hold said Confidential Information in strict
      confidence and not to disclose the Confidential Information to any third parties
      or use it for any commercial purposes without the prior written permission
      of
      the disclosing party. The receiving party shall take reasonable security
      precautions to prevent wrongful disclosure or use of the Confidential
      Information. The receiving party may disclose the Confidential Information
      to
      its employees, but only on a need-to-know basis, and the receiving party agrees
      that all such employees must sign an appropriate nondisclosure agreement with
      the receiving party in which the employee agrees not to disclose such
      Confidential Information to third parties, including consultants, without the
      prior written permission of the receiving party.

     

    4.4.
      Copies
      and Disassembling.
      The
      receiving party will not make copies of any documents containing Confidential
      Information, except on a need-to-know basis. The receiving party will not
      disassemble, decompile or reverse engineer any materials, items or software
      provided by the disclosing party to the receiving party.

     

    4.5.
      Notice
      of Misappropriation.
      The
      receiving party will promptly inform the disclosing party in writing of any
      misappropriation, unauthorized use, or disclosure of the Confidential
      Information and will cooperate with the disclosing party in every reasonable
      way
      in the disclosing party’s efforts to prevent further disclosure and to obtain
      possession of the misappropriated Confidential Information.

     

    4.6.
      Return
      of Materials.
      Upon
      written request from the disclosing party, the receiving party shall return
      to
      the disclosing party all documentation, materials and other items containing
      the
      Confidential Information of the disclosing party and all copies thereof that
      are
      in the receiving party’s possession or control.

     

    4.7.
      Equitable
      Relief and Fees.
      Both
      parties acknowledge that the unauthorized disclosure or use of the Confidential
      Information could cause irreparable harm and significant injury that may be
      difficult to ascertain. Accordingly, both parties agree that they shall have
      the
      right to seek an immediate injunction enjoining any breach of this Agreement,
      in
      addition to any other remedies to which it may be entitled including money
      damages. In any action to enforce this Agreement, the prevailing party will
      be
      entitled to its attorney’s fees excluding in-house legal staff in additional to
      any other recovery awarded.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    The
      purpose of this Letter of Intent is solely to state the terms of the Management
      Agreement, which terms shall be used as a basis to finalize and enter into
      definitive Management Transaction documents. Any Management Transaction is
      subject to the approval of the Board of Directors of Stratus (already obtained
      as of the date hereof) and the Board of Directors of Humana.

     

    We
      are
      excited about this proposed Management Transaction and upon your execution
      of
      this Letter of Intent. We will expend the time and effort necessary so that
      we
      may consummate a transaction on or before August 31, 2005.

    


    Very
      truly yours,

    


    STRATUS
      SERVICES GROUP, INC.

    


    


    By:     /s/
      Joseph J.
      Raymond 

    Joseph
      J.
      Raymond

    President
      & CEO

    


    ACCEPTED
      AND AGREED to

    As
      of the 15th day of August, 2005:

    


    Humana
      Trans Services

    Holding
      Corp.

    


    


    By: 
      /a/ James W. Zimbler

    Name:
      James W. Zimbler

    Title:
      Vice President