Document:

exv4wiii

 

Exhibit 4(iii)

THE SECURITIES REPRESENTED BY THIS DOCUMENT HAVE NOT BEEN REGISTERED WITH THE UNITED STATES
SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”),
AND ARE ‘RESTRICTED SECURITIES’ AS THAT TERM IS DEFINED IN RULE 144 UNDER THE 1933 ACT. THE
SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE 1933 ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE
COMPANY THROUGH REASONABLE MEANS AS DETERMINED BY THE COMPANY, INCLUDING AN OPINION OF SELLER’S
COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY.

AMERICAN OIL & GAS, INC.

COMMON STOCK PURCHASE WARRANT

     THIS COMMON STOCK WARRANT AGREEMENT (the “Agreement”) is made and entered into as of the 21st
day of September, 2005 by and between American Oil & Gas, Inc., a Nevada corporation (the
“Company”), and                                         (the “Holder”).

WITNESSETH:

     WHEREAS, the “Company engaged in a July 22, 2005 private placement offering (“Offering”) of Up
to 250,000 Units, with each Unit consisting of one share of our Series AA 8% Preferred Stock,
$0.001 par value, (the “Preferred Stock”) and warrants to purchase 2.70 shares of common stock,
$0.001 par value (“Common Stock”). In connection with the this Offering, the Company hereby grants
to the Holder, a warrant (“Warrant”) to purchase certain shares of Common Stock. The Warrants are
being issued as a placement fee to non-officer and non-director persons who assisted the Company in
the sale of its Preferred Stock pursuant to the Offering.

     WHEREAS, the Holder desires to receive a warrant on the terms and conditions set forth in this
Agreement.

     NOW, THEREFORE, the parties agree as follows:

     1. Grant of Warrant. The Company hereby grants to the Holder the Warrant to purchase
all or any part of an aggregate of ___shares of the authorized and unissued $.001 par
value common stock of the Company (the “Warrant Shares”) subject to adjustment as provided in this
Agreement, pursuant to the terms and conditions set forth in this Agreement.

     2. Warrant Price. At any time when shares are to be purchased pursuant to this
Agreement, the purchase price for each Warrant Share shall be $6.00 (the “Warrant Price”), subject
to adjustment as provided in this Agreement.

     3. Exercise Period. The period for the exercise of the Warrant shall commence on the
date of this Agreement and shall terminate at 5:00 p.m., Denver, Colorado time on July 21, 2008,
unless terminated earlier as provided herein.

 

 

     4. Exercise of Warrant.

     (a) The Warrant may be exercised in whole or in part by delivering to the President of
the Company at the address of the Company’s principal office (i) a Notice and Agreement of
Exercise of Warrant, substantially in the form attached hereto as Exhibit A,
specifying the number of Warrant Shares with respect to which the Warrant is exercised, and
(ii) full payment of an amount equal to the Warrant Price multiplied by the number of
Warrant Shares then being purchased (such aggregate amount of money, the “Purchase Price”).
Payment shall be made by certified check or cleared funds. The Warrant may not be exercised
in part unless the purchase price for the Warrant Shares purchased is at least $1,000 or
unless the entire remaining portion of the Warrant is being exercised.

     (b) Promptly upon receipt of the Notice and Agreement of Exercise of Warrant together
with the full payment of the Purchase Price, the Company shall deliver to the Holder a
properly executed certificate or certificates representing the Warrant Shares being
purchased.

     5. Warrant Adjustment. N/A

     6. Withholding Taxes. The Company may take such steps as it deems necessary or
appropriate for the withholding of any taxes which the Company is required by any law or regulation
or any governmental authority, whether federal, state or local, domestic or foreign, to withhold in
connection with the Warrant including, but not limited to, the withholding of all or any portion of
any payment owed by the Company to the Holder or the withholding of issuance of Warrant Shares to
be issued upon the exercise of the Warrant.

     7. Securities Laws Requirements. The issuance of the Warrant has not been registered
under the Securities Act of 1933, as amended (the “1933 Act”), in reliance upon an exemption from
registration. In addition, no Warrant Shares shall be issued unless and until, in the opinion of
the Company, there has been full compliance with, or an exemption from, any applicable registration
requirements of the 1933 Act, any applicable listing requirements of any securities exchange on
which stock of the same class has been listed, and any other requirements of law or any regulatory
bodies having jurisdiction over such issuance and delivery. The Holder hereby acknowledges,
represents, warrants and agrees as follows, and, pursuant to the terms of the Notice and Agreement
of Exercise of Warrant (Exhibit A) that shall be delivered to the Company upon each exercise of the
Warrant, the Holder shall acknowledge, represent, warrant and agree as follows:

     (a) Holder is acquiring the Warrant and the Warrant Shares for investment purposes only
and the Warrant and the Warrant Shares that Holder is acquiring will be held by Holder
without sale, transfer or other disposition for an indefinite period unless the transfer of
those securities is subsequently registered under the federal securities laws or unless
exemptions from registration are available;

     (b) Holder’s overall commitment to investments that are not readily marketable is not
disproportionate to Holder’s net worth, and Holder’s investment in the Warrant and the
Warrant Shares will not cause such overall commitments to become excessive;

     (c) Holder’s financial condition is such that Holder is under no present or
contemplated future need to dispose of any portion of the Warrant or the Warrant Shares to
satisfy any existing or contemplated undertaking, need or indebtedness;

 

 

     (d) Holder has sufficient knowledge and experience in business and financial matters to
evaluate, and Holder has evaluated, the merits and risks of an investment in the Warrant and
the Warrant Shares;

     (e) The address set forth on the signature page to this Agreement is Holder’s true and
correct residence, and Holder has no present intention of becoming a resident of any other
state or jurisdiction;

     (f) Holder confirms that all documents, records and books pertaining to an investment
in the Warrant and the Warrant Shares that have been requested by Holder have been made
available or delivered to the Holder. Holder has had the opportunity to discuss the
acquisition of the Warrant and the Warrant Shares with the Company. Holder also confirms
that it has obtained or been given access to all information concerning the Company that
Holder has requested;

     (g) Holder has had the opportunity to ask questions of, and receive the answers from,
the officers and directors of the Company concerning the terms of Holder’s investment in the
Warrant and the Warrant Shares and to receive additional information necessary to verify the
accuracy of the information delivered to Holder, to the extent that the Company possesses
such information or can acquire it without unreasonable effort or expense;

     (h) Holder understands that the Warrant has not been, and the Warrant Shares issuable
upon exercise of the Warrant will not be, registered under the 1933 Act or any state
securities laws in reliance on an exemption for private offerings, and no federal or state
agency has made any finding or determination as to the fairness of this investment or any
recommendation or endorsement of the issuance of the Warrant or the Warrant Shares;

     (i) The Warrant and the Warrant Shares that Holder is acquiring will be solely for
Holder’s own account, for investment, and are not being purchased with a view to or for the
resale, distribution, subdivision or fractionalization thereof. Holder has no agreement or
arrangement for any such resale, distribution, subdivision or fractionalization thereof;

     (j) Holder acknowledges and is aware of the following:

     (i) The Company has a history of losses. The Warrant and the Warrant Shares
constitute a speculative investment and involve a high degree of risk of loss by
Holder of Holder’s total investment in the Warrant and the Warrant Shares.

     (ii) There are substantial restrictions on the transferability of the Warrant
and the Warrant Shares. The Warrant is not transferable. The Warrant Shares cannot
be transferred, pledged, hypothecated, sold or otherwise disposed of unless they are
registered under the 1933 Act or an exemption from such registration is available
and established to the satisfaction of the Company; except as set forth in the
Subscription Agreement, investors in the Company have no rights to require that the
Warrant Shares be registered; there is no right of presentment of the Warrant Shares
and there is no obligation by the Company to repurchase any of the Warrant Shares;
and, accordingly, Holder may have to hold the Warrant Shares indefinitely and it may
not be possible for Holder to liquidate Holder’s investment in the Company;

 

 

     (iii) Each certificate issued representing the Warrant Shares shall be
imprinted with a legend that sets forth a description of the restrictions on
transferability of those securities, which legend will read substantially as
follows:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“1933 ACT”), AND ARE ‘RESTRICTED SECURITIES’ AS THAT TERM IS
DEFINED IN RULE 144 UNDER THE 1933 ACT. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
1933 ACT, OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE 1933 ACT, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED
TO THE SATISFACTION OF THE COMPANY THROUGH REASONABLE MEANS
AS DETERMINED BY THE COMPANY, INCLUDING AN OPINION OF
SELLER’S COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY.”

     (k) The Holder shall report all sales of Warrant Shares to the Company in writing on a
form prescribed by the Company.

          The restrictions described above, or notice thereof, may be placed on the certificates
representing the Warrant Shares purchased pursuant to the Warrant, and the Company may refuse to
issue the certificates or to transfer the shares on its books unless it is satisfied that no
violation of such restrictions will occur.

     8. Adjustment by Stock Split, Stock Dividend, Etc. In addition to the adjustments
provided in Section 5, if at any time the Company increases or decreases the number of its
outstanding shares of common stock, or changes in any way the rights and privileges of such shares,
by means of the payment of a stock dividend or the making of any other distribution on such shares
payable in its common stock, or through a stock split or subdivision of shares, or a consolidation
or combination of shares, or through a reclassification or recapitalization involving its common
stock, the numbers, rights and privileges of the shares of common stock included in the Warrant
shall be increased, decreased or changed in like manner as if such shares had been issued and
outstanding, fully paid and nonassessable at the time of such occurrence, and the Warrant Price
shall be correspondingly decreased, increased or otherwise changed. Whenever the number or kind of
shares comprising the Warrant Shares or the Warrant Price is adjusted, the Company shall promptly
give written notice and a certificate of the Chief Financial Officer or Chief Executive Officer of
the Company to each Holder of record of the outstanding Warrant, stating that such an adjustment
has been effected and setting forth the number and kind of shares purchasable and the amount of the
then-current Warrant Price, and stating in reasonable detail the facts requiring such adjustment
and the calculation of such adjustment.

     9. Reorganization and Reclassification. In case of any capital reorganization or any
reclassification of the capital stock of the Company while the Warrant remains outstanding, the
Holder of the Warrant shall thereafter be entitled to purchase pursuant to the Warrant (in lieu of
the kind and number of shares of Common Stock comprising Warrant Shares that such Holder would have
been entitled to purchase or acquire immediately before such reorganization or reclassification)
the kind and number of

 

 

shares of stock of any class or classes or other securities or property for or into which such
shares of Common Stock would have been exchanged, converted, or reclassified if the Warrant Shares
had been purchased immediately before such reorganization or reclassification. In case of any such
reorganization or reclassification, appropriate provision (as determined by resolutions of the
Board of Directors of the Company) shall be made with respect to the rights and interest thereafter
of the Holder of the Warrant, to the end that all the provisions of this Agreement (including
adjustment provisions) shall thereafter be applicable, as nearly as reasonably practicable, in
relation to such stock or other securities or property.

     10. Common Stock to be Received upon Exercise. Holder understands that (a) the
Company is under no obligation to register the issuance of the Warrant Shares, (b) the Company’s
obligation to register the resale of the Warrant Shares under the 1933 Act is as set forth in
Section 3 of the Subscription and Registration Rights Agreement, and (c) in the absence of any such
registration, the Warrant Shares cannot be sold unless they are sold pursuant to an exemption from
registration under the 1933 Act. Holder also understands that with respect to Rule 144, routine
sales of securities made in reliance upon such Rule can be made only in limited amounts in
accordance with the terms and conditions of the Rule, and that in cases in which the Rule is
inapplicable, compliance with either Regulation A or another exemption under the 1933 Act will be
required. Thus, the Warrant Shares will have to be held indefinitely in the absence of
registration under the 1933 Act or an exemption from registration.

     Furthermore, the Holder fully understands that issuance of the Warrant Shares will not be
registered under the 1933 Act and that, because the issuance of the Warrant Shares will not be
registered, the Warrant Shares will be issued in reliance upon an exemption which is available only
if Holder acquires such shares for investment and not with a view to distribution. Holder is
familiar with the phrase “acquired for investment and not with a view to distribution” as it
relates to the 1933 Act and the special meaning given to such term in various releases of the
Securities and Exchange Commission.

     11. Privilege of Ownership. Holder shall not have any of the rights of a stockholder
with respect to the shares covered by the Warrant except to the extent that one or more
certificates for such shares shall be delivered to him or her upon exercise of the Warrant.

     12. Relationship to Engagement. Nothing contained in this Agreement (i) shall confer
upon the Holder any right with respect to continuance of Holder’s engagement by, or affiliation
with, or relationship to, the Company, or (ii) shall interfere in any way with the right of the
Company at any time to terminate the Holder’s engagement by, position or affiliation with, or
relationship to, the Company.

     13. Notices. All notices, requests, demands, directions and other communications
(“Notices”) concerning this Agreement shall be in writing and shall be mailed or delivered
personally or sent by telecopier or facsimile to the applicable party at the address of such party
set forth below in this Section 13. When mailed, each such Notice shall be sent by first class,
certified mail, return receipt requested, enclosed in a postage prepaid wrapper, and shall be
effective on the fifth business day after it has been deposited in the mail. When delivered
personally, each such Notice shall be effective when delivered to the address for the respective
party set forth in this Section 13, provided that it is delivered on a business day and further
provided that it is delivered prior to 5:00 p.m., local time of the party to whom the notice is
being delivered, on that business day; otherwise, each such Notice shall be effective on the first
business day occurring after the Notice is delivered. When sent by telecopier or facsimile, each
such Notice shall be effective on the day on which it is sent provided that it is sent on a
business day and further provided that it is sent prior to 5:00 p.m., local time of the party to
whom the Notice is being sent, on that business day; otherwise, each such Notice shall be effective
on the first business day occurring after the Notice is sent. Each such Notice shall be addressed
to the party to be notified as shown below:

 

 

	 	 	 	 	 
	(a)

	 	if to the Company:
	 	American Oil & Gas, Inc.
	 

	 	 	 	1050 17th Street, Suite 1850
	 

	 	 	 	Denver, Colorado 80265
	 

	 	 	 	Facsimile: (303) 595-0709
	 

	 	 	 	Attention: Andrew P. Calerich
	 
	 	 	 	 
	(b)

	 	if to the Holder:
	 	At the address set forth on the signature page
	 

	 	 	 	of this Agreement

     Either party may change its respective address for purposes of this Section 13 by giving the
other party Notice of the new address in the manner set forth above.

     14. General Provisions. This instrument (a) may not be amended nor may any rights
hereunder be waived except by an instrument in writing signed by the party sought to be charged
with such amendment or waiver, (b) shall be construed in accordance with and governed by the laws
of Colorado, and (c) shall be binding upon and shall inure to the benefit of the parties and their
respective personal representatives and assigns, except as above set forth. All pronouns contained
herein and any variations thereof shall be deemed to refer to the masculine, feminine or neuter,
singular or plural as the identity of the parties hereto may require.

     IN WITNESS WHEREOF, the parties have executed this Agreement on the dates set forth below.

	 	 	 	 	 	 
	 	 	AMERICAN OIL & GAS, INC.	 
	 
	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	 	 	 	 
	 

	 	 	 	Name: Andrew P. Calerich	 
	 

	 	 	 	Title: President and Chief Financial Officer	 
	 
	 	 	 	 	 
	 

	 	HOLDER	 
	 
	 	 	 	 	 
	 	 	 	 
	 	 	Printed Name of Holder	 
	 
	 	 	 	 	 
	 

	 	By:	 	 	 
	 

	 	 	 	 	 
	 

	 	 	 	Signature	 
	 
	 	 	 	 	 
	 	 	 	 
	 

	 	 	 	Address	 
	 
	 	 	 	 	 
	 	 	 	 
	 

	 	 	 	City, State and Zip Code	 

 

 

EXHIBIT A

(To American Oil & Gas, Inc.

Common Stock Purchase Warrant)

AMERICAN OIL & GAS, INC.

NOTICE AND AGREEMENT OF EXERCISE OF COMMON STOCK PURCHASE WARRANT

     The undersigned hereby exercises its American Oil & Gas, Inc. Common Stock Purchase Warrant
dated as of ___, 2005 as to ___shares of the $.001 par value common stock (the “Warrant
Shares”) of American Oil & Gas, Inc. (the
“Company”) at a purchase price of $___ per share.
Enclosed is payment of the total exercise price for these Warrant Shares of $___.

     The undersigned understands that no Warrant Shares will be issued unless and until, in the
opinion of the Company, there has been full compliance with, or an exemption from, any applicable
registration requirements of the Securities Act of 1933, as amended (the “1933 Act”), any
applicable listing requirements of any securities exchange on which stock of the same class is then
listed, and any other requirements of law or any regulatory bodies having jurisdiction over such
issuance and delivery. The undersigned hereby acknowledges, represents, warrants and agrees, to
and with the Company as follows:

     (a) The undersigned (“Holder”) is acquiring the Warrant Shares for investment purposes only
and the Warrant Shares that Holder is acquiring will be held by Holder without sale, transfer or
other disposition for an indefinite period unless the transfer of those securities is subsequently
registered under the federal securities laws or unless an exemption from registration is available;

     (b) Holder’s overall commitment to investments that are not readily marketable is not
disproportionate to Holder’s net worth and Holder’s investment in the Warrant Shares will not cause
such overall commitments to become excessive;

     (c) Holder’s financial condition is such that Holder is under no present or contemplated
future need to dispose of any portion of the Warrant Shares to satisfy any existing or contemplated
undertaking, need or indebtedness;

     (d) Holder has sufficient knowledge and experience in business and financial matters to
evaluate, and Holder has evaluated, the merits and risks of an investment in the Warrant Shares;

     (e) The address set forth in this Agreement is Holder’s true and correct residence, and
Holder has no present intention of becoming a resident of any other state or jurisdiction;

     (f) Holder confirms that all documents, records and books pertaining to an investment in the
Warrant Shares that have been requested by the Holder have been made available or delivered to
Holder. Holder has obtained or been given access to all other information concerning the Company
that Holder has requested;

     (g) Holder has had the opportunity to discuss the acquisition of the Warrant Shares with the
Company, to ask questions of, and receive the answers from, the Company concerning the terms of the
investment in the Warrant Shares, and to receive additional information necessary to verify the
accuracy of any information delivered to Holder, to the extent that the Company possesses such
information or can acquire it without unreasonable effort or expense;

 

 

     (h) Holder understands that the issuance of the Warrant Shares upon the exercise of the
Warrant has not been registered under the 1933 Act or any state securities laws in reliance on an
exemption for private offerings, and no federal or state agency has made any finding or
determination as to the fairness of this investment or any recommendation or endorsement of the
sale of the Warrant Shares;

     (i) Holder is acquiring the Warrant Shares solely for Holder’s own account, for investment,
and not with a view to or for the resale, distribution, subdivision or fractionalization thereof.
Holder has no agreement or arrangement for any such resale, distribution, subdivision or
fractionalization thereof;

     (j) Holder acknowledges and is aware of the following:

     (i) The Company does not have a material amount of revenues from oil or gas production
or from any other source. Its operations have resulted in a history of losses. The Warrant
Shares constitute a speculative investment and involve a high degree of risk of loss by
Holder of Holder’s total investment in the Warrant Shares.

     (ii) There are substantial restrictions on the transferability of the Warrant Shares.
The Warrant Shares cannot be transferred, pledged, hypothecated, sold or otherwise disposed
of unless they are registered under the 1933 Act or an exemption from such registration is
available and established to the satisfaction of the Company. There is no right of
presentment of the Warrant Shares and there is no obligation by the Company to repurchase
any of the Warrant Shares. As a result, Holder may have to hold the Warrant Shares
indefinitely, and it may not be possible for Holder to liquidate Holder’s investment in the
Company.

     (iii) Each certificate issued representing the Warrant Shares shall be imprinted with a
legend that sets forth a description of the restrictions on transferability of those
securities, which legend will read substantially as follows:

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933
ACT”), AND ARE ‘RESTRICTED SECURITIES’ AS THAT TERM IS DEFINED IN
RULE 144 UNDER THE 1933 ACT. THE SECURITIES MAY NOT BE OFFERED FOR
SALE, SOLD OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, OR PURSUANT TO AN
EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT, THE AVAILABILITY OF
WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY
THROUGH REASONABLE MEANS AS DETERMINED BY THE COMPANY, INCLUDING AN
OPINION OF SELLER’S COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY.”

 

 

     Warrant Shares in the amount specified above are to be issued in the name or names set forth
below in the left-hand column.

	 	 	 	 	 
	 	 	 
	 	 	Printed Name of Holder
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 
	 

	 	 	Signature
	 
	 	 	 	 
	 

	 	 	 
	 

	 	 	Printed Name and Title
	 
	 	 	 	 
	 	 	 
	 

	 	 	Address
	 
	 	 	 	 
	 	 	 
	 

	 	 	City, State and Zip Code

* * * * *Exhibit 10.43

    

    

    

    

    

    

    

    

    

    

    

    

    
      WRITER'S
        DIRECT DIAL:

      (813)
        227-8473

      WRITER'S
        E-MAIL:

      mbrundage@hwhlaw.com

    

    

    

    

    September
      15, 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 September
      30, 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.

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    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 10:00 a.m. Eastern on September 16, 2005 the sum of
              $1,405,000 of the $1,655,000 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
              $250,000 shall be paid, by wire transfer, as soon as possible but no
              later
              than by September 29, 2005.

          

     

    	2.  	
            Conditioned
              upon timely receipt of the payment required in paragraph 1 above, and
              so
              long as payments continue to be made, in accordance with paragraph
              4
              below, Advantage will release and fund the current payroll associated
              with
              the Agreement. 

          

     

    	3.  	
            Provided
              that Stratus complies with all the terms of this forbearance agreement,
              Advantage will continue to perform under the Agreement through September
              29, 2005.

          

     

    	4.  	
            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 September 22, 2005 and September 29, 2005,
              respectively, (the “Deferred Amount”); and (b) the remaining amount due
              under invoices after deducting $1,100,000 shall be due and payable
              immediately (the “Immediately Due
              Amount”).

          

     

    	5.  	
            Stratus
              shall repay the Immediately Due Amount by directing CTF, on a daily
              basis
              starting Friday September 16, 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.

          

     

    	6.  	
            Stratus
              shall be in default hereunder unless the Immediately Due Amount is
              paid in
              full by September 21, 2005 and September 28, 2005, respectively. The
              Deferred Amount shall be due in full without further notice or demand
              at
              12:00 p.m. Eastern on September 29, 2005.

          

     

    	7.  	
            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.

          

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    	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 Advantages sole remedy
              against
              CTF. 

          

     

    

    HILL,
      WARD & HENDERSON, P.A.

    s/ 

    Michael
      P. Brundage

    

    

    
      	
              ALS,
                LLC

               

               

              By: s/
                Jay Wolin    

               

              Its: EVP     

               

               

            	
              Stratus
                Service Group, Inc.

               

               

              By: s/
                Michael A. Maltzman  

               

              Its: Exec
                VP & CFO   

            
	
               

              Acknowledged
                and consented to by 

               

              Capital
                TempFunds, Inc.

               

               

              By: s/
                Gerard Gabriele   

               

              Its: Senior
                Vice President   

            	 

    

     

     

     

    3

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00091-of-00352.parquet"}]]