Exhibit 10.54


    

      EXHIBIT
        10.54

       

      


      


      November
        3, 2005

      


      Michael
        A. Maltzman, CFO

      Stratus
        Services Group, Inc.

      500
        Craig
        Road, Suite 201

      Manalapan,
        New Jersey 07726

      


      Re: Continued
        forbearance regarding default under outsourcing agreement

              dated
        August 13, 2004, by and between ALS, LLC and Stratus Services Group,
        Inc., as amended (the “Agreement”)     

      


      Dear
        Mr.
        Maltzman:

      


      As
        you
        know, this law firm represents ALS, LLC (“Advantage”) in connection with the
        Agreement and Advantage’s business relationships with Stratus Services Group,
        Inc. (“Stratus”). Capital TempFunds (“CTF”) is Stratus’ secured lender under the
        terms and conditions of a loan and security agreement dated as of December
        8,
        2000 as amended and modified (the “Secured Loan”). By letters dated July 29,
        2005 and August 5, 2005, Advantage has provided Stratus with written notices
        of
        its defaults and material breaches of payment obligations due under the
        Agreement. Stratus has failed to cure the material breaches of payment
        obligations within two business days of notice and therefore, pursuant to
        paragraph 3 of the Agreement, Advantage currently has the right to terminate
        the
        Agreement. Additionally, as a result of the defaults, Stratus owes to Advantage
        $1,000.00 per day of payment obligation breach or 24% annual interest on
        the
        outstanding amount, compounded daily, or a maximum allowed by law, whichever
        is
        higher. We understand that CTF has declared defaults under the Secured Loan,
        but
        has entered into a forbearance agreement with Stratus through at least November
        18th, 2005.

       

      This
        letter sets forth the terms by which the parties agree to a forbearance of
        enforcement of existing defaults that have been declared by Advantage as
        to the
        Agreement and CTF as to the Secured Loan. Due to the time urgency in getting
        this letter agreement prepared and executed, the parties agree to enter a
        more
        formal agreement if reasonably necessary.

       

      Advantage
        will forbear from enforcing current defaults under the Agreement, unless
        a
        default occurs hereunder, on the following terms and conditions:

       

      	1.  	
              On
                Stratus’ direction which is given hereby, CTF shall wire transfer to
                Advantage by 3 pm Eastern on November 3, 2005 the sum of $1,857,173.43
                of the 2,157,173.43
                presently owed by Stratus to Advantage pursuant to the terms of the
                Agreement (which excludes the $600,000 subordinated receivable, which
                will
                remain due and owing). The remaining $300,000 shall be paid by wire
                transfer no later than November 17th
                2005.

            


       


      
        
           

        

        
          1

          
            

          

        

        
           

        

      


      Conditioned
        upon timely receipt of the payments required in paragraph 1 above, and as
        long
        as payments continue to be timely made in accordance with paragraph 4 below
        and
        Stratus is not in payment default hereunder, Advantage will release and fund
        the
        payrolls associated with the Agreement on November 4, 2005 and November 11,
        2005.

       

      	2.  	
              Provided
                that Stratus complies with all the terms of this forbearance agreement,
                Advantage will continue to perform under the Agreement through November
                17, 2005.

            


       

      	3.  	
              Advantage
                shall invoice to Stratus as to each payroll paid under paragraph
                2 above
                consistent with the Agreement except that such invoices shall have
                two
                components: (a) invoices week totaling the amount of $1,100,000 shall
                be
                due and payable on or before November 9th, 2005 and November
                17th
                respectively (the “Deferred Amounts”); and (b) the remaining amount due
                under the invoices after deducting $1,100,000 shall be due and payable
                immediately (the “Immediately Due
                Amounts”).

            


       

      	4.  	
              Stratus
                shall repay the Immediately Due Amounts for each week by directing
                CTF, on
                a daily basis starting Friday, November 4, 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.

            


       

      	5.  	
              Stratus
                shall be in default hereunder unless: (i) the Immediately Due Amount
                for
                each week are paid in full by November 9, 2005; and November
                16th,
                2005 respectively (ii) the Deferred Amounts for each week are paid
                in full
                by November 9th, 2005 and November 17th
                respectively.

            


       

      	6.  	
              Stratus
                confirms that Advantage is entitled to a $50,000 Forbearance Fee
                through
                August 25, 2005, as previously memorialized in the August 12, 2005
                letter
                agreement between Stratus and Advantage. Thereafter, as set forth
                in the
                preamble to this letter above, Stratus confirms that Advantage is
                entitled
                to $1,000 per day of payment obligation breach or 24% annual interest
                on
                the outstanding amount, compounded daily, or a maximum obligation
                allowed
                by law, whichever is higher. Amounts for fees and/or interest due
                from
                Stratus to Advantage are in addition to the balance due listed
                above.

            


       

      	7.  	
              Any
                further default under the Agreement or the Secured Loan shall be
                a default
                hereunder, unless specifically stated otherwise 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 of under
                the
                Secured Loan. For the term hereof, Advantage agrees to give CTF
                and

            


       


      
        
           

        

        
          2

          
            

          

        

        
           

        

      


      Stratus
        immediate and simultaneous notice of any default by Stratus hereunder or
        under
        the Agreement.

       

      	8.  	
              CTF
                shall forbear from exercising its rights under the Secured Loan during
                the
                forbearance period pursuant to the separate forbearance agreement,
                an
                executed copy of which will be immediately provided to Advantage.
                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 Advantage’s right to cease forbearing hereunder shall
        constitute Advantage’s sole remedy against CTF.

       

                      HILL,
        WARD &
        HENDERSON, P.A.

      


                      s/

      


                      Michael
        P.
        Brundage

      


      


      


      
        	
                ALS,
                  LLC

              	
                STRATUS
                  SERVICES GROUP

              
	
                 

                By: /s/
                  Jay Wolin

              	
                 

                By: /s/
                  Michael A. Maltzman

              
	
                Its: CFO

              	
                Its: Executive
                  Vice Pres. & CFO

              


      

      


      


      


      


      
        	
                Acknowledged
                  and consented to by

              	 
	 
	
                CAPITAL
                  TEMPFUNDS - A Division of Capital Factors, LLC

              
	
                 

                By: /s/
                  James Rothman

              	 
	
                Its: President

              	 


      

       

      
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