|   | Re: | Forbearance                regarding default under outsourcing agreement dated August 13, 2004,                by                and between ALS, LLC and Stratus Services Group, Inc., as amended                (the                “Agreement”) |
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| 1.   | On                Stratus’ direction which is given hereby, CTF shall wire transfer to                Advantage the sum of $1,112,000 by 5:00 p.m. Eastern on August 11,                2005 to                be applied to the amounts owed by Stratus to Advantage pursuant to                the                terms of the Agreement bringing them current through the date of                this                letter. |
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| 2.   | Conditioned                upon timely receipt of the payment required in paragraph 1 above,                Advantage will release and fund the current payroll associated with                the                Agreement. |
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| 3.   | Provided                that Stratus complies with all the terms of this forbearance agreement,                Advantage will continue to perform under the Agreement through August                25,                2005. |
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| 4.   | Advantage                shall receive a $50,000 forbearance fee (net of any other default                penalties or interest) payable on the earlier of termination of the                agreement or an additional default. |
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| 5.   | Advantage                shall invoice to Stratus as to the payroll paid under paragraph 2                above                consistent with the Agreement except that such invoices shall have                two                components: (a) invoices totaling the amount of $1,100,000 shall                be due                and payable on or before August 18, 2005 (the “Deferred Amount”); and                (b) the remaining amount due under invoices after deducting $1,100,000                shall be due and payable immediately (the “Immediately Payable                Amount”). |
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| 6.   | Stratus                shall repay the Immediately Due Amount by directing CTF, on a daily                basis                starting Friday August 12, 2005, to advance and wire transfer to                Advantage                from available funds under the Secured Loan. Stratus shall provide                Advantage with an exact copy of the loan status provided by CTF.                In the                event that CTF lowers the advance rate under the Secured Loan, CTF                shall                immediately notify Advantage thereof and Advantage may elect, prior                to CTF                making any additional advances, to cease to forbear under this agreement. |
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| 7.   | Stratus                shall be in default hereunder unless the Immediately Due Amount is                paid in                full by August 17, 2005. The Deferred Amount shall be due in full                without                further notice or demand at 12:00 p.m. Eastern on August 18, 2005. |
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| 8.   | If                the Immediately Due Amount and the Deferred Amount are paid in full                by                noon on August 18, 2005 and no other defaults exist hereunder, Advantage                will forbear for one more week but all terms of the Agreement, including,                but not limited to payment terms shall be govern. |
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| 9.   | Any                further default under the Agreement or the Secured Loan shall be                a default                hereunder, unless specifically stated other wise herein. A default                hereunder or under the Agreement shall entitle Advantage to immediately                terminate the Agreement and immediately seek all available remedies.                For                the term hereof, CTF agrees to give Advantage and Stratus immediate                and                simultaneous notice of any default by Stratus hereunder or under                the                Secured Loan. For the term hereof, Advantage agrees to give CTF and                Stratus immediate and simultaneous notice of any default by Stratus                hereunder or under the Agreement. |
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| 10.   | CTF                shall forbear from exercising its rights under the Secured Loan during                the                Forbearance Period pursuant to a separate forbearance agreement.                Stratus                shall provide Advantage with copies of the executed forbearance agreement                with CTF. Advantage’s obligation to forbear hereunder shall cease if CTF                ceases to forbear under its forbearance agreement and such Advantage                right                to cease forbearing hereunder shall constitute Advantages sole remedy                against CTF. |
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| ALS,                LLC  By:                 /s/ Jay Wolin       Its:                 CFO                                                                                                                                                                              | Stratus                Service Group, Inc.  By:                 /s/ Michael A. Maltzman       Its:                 Executive Vice President and CFO       |
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|  Acknowledged                and consented as to the applicable provisions of paragraph 6, 9 and                10 by                Capital TempFunds a division of Capital Factors, LLC  By:                 /s/ James Rothman       Its:                 President       |                                                                                                                                                                                                                                           |