Document:

<PAGE>
                                                                    EXHIBIT 4.10

April 27, 2004

Special Situations Fund III, L.P.
Special Situations Cayman Fund, L.P.
Special Situations Private Equity Fund, L.P.
Special Situations Technology Fund, L.P.
Special Situations Technology Fund II, L.P.
153 East 53rd Street
55th Floor
New York, NY  10022

Attention: Stephen R. Becker

Dear Steve:

      As we have discussed, Metretek Technologies, Inc. (the "Company") is
currently contemplating the offering and sale of shares of its common stock, par
value $0.01 per share ("Common Stock"), and warrants to purchase shares of its
Common Stock (the "Investor Warrants") to one or more accredited investors (the
"2004 Offering"). In connection with the 2004 Offering, Special Situations Fund
III, L.P., Special Situations Cayman Fund, L.P., Special Situations Private
Equity Fund, L.P., Special Situations Technology Fund, L.P. and Special
Situations Technology Fund II, L.P. (each, a "Fund", and, collectively, the
"Funds") hereby agree to convert 1,000 of the shares (the "Excess Shares") of
the Company's Series B Preferred Stock, par value $0.01 per share (the "Series B
Preferred Stock"), held by them into shares of Common Stock effective as of the
closing date of the 2004 Offering (the "Closing Date") on the terms described
below.

      Each share of Series B Preferred Stock owned by the Funds would have an
accreted value (including accrued but unpaid dividends) (the "Per Share Accreted
Value") of $1,467.91 as of December 9, 2004 (the "Maturity Date"), and the
Excess Shares would have an aggregate accreted value of $1,467,910 as of the
Maturity Date. The Funds hereby irrevocably agree to convert on the Closing Date
the Excess Shares at the Per Share Accreted Value of such shares on the Closing
Date into newly issued, fully paid and non-assessable shares of Common Stock
(the "Conversion Shares") at a conversion price of $3.0571 per share. The
remainder of the shares of Series B Preferred Stock held by the Funds shall
remain outstanding and shall retain all of its existing rights, limitations and
preferences.

      In consideration of the conversion of the Excess Shares by the Funds, the
Company shall issue to the Funds not later than the Closing Date an additional
number of shares of Common Stock equal to the quotient obtained by dividing (x)
the difference between (A) the Per Share Accreted Value of the Excess Shares as
of the Maturity Date and (B) the Per Share Accreted Value of the Excess Shares
as of the Closing Date, by (y) $3.0571 (the "Additional Shares"). Accordingly,
upon conversion of the Excess Shares, the Company shall issue to the Funds an
aggregate of 480,164 share of Common Stock, constituting both the Conversion
Shares and the Additional Shares (i.e. $1,467,910 divided by $3.0571).

      As additional consideration for the conversion of the Excess Shares by the
Funds, the Company shall issue to the Funds not later than the Closing Date
warrants to purchase an aggregate of 480,164 shares of Common Stock, subject to
adjustment in certain circumstances (the "Warrant Shares"), at an exercise price
of $3.0571 per share, subject to customary adjustments in certain circumstances
(the "New Warrants"). The New Warrants shall be exercisable commencing on the
Closing Date through, and shall expire after the close of business on, June 9,
2005 and shall otherwise have the same terms and conditions as the Investor
Warrants issued in the 2004 Offering, except as described below. The Funds shall
be entitled to the same registration rights with respect to the Warrant Shares
<PAGE>
and the Additional Shares as any investor has with respect to any shares of
Common Stock issued or issuable pursuant to the 2004 Offering (the "Offering
Shares"). In the event that the registration statement covering the Offering
Shares, the Additional Shares and the Warrant Shares is not declared effective
on or prior to the effectiveness deadline specified in the registration rights
provisions of the 2004 Offering (the "Effectiveness Deadline"), in addition to
any other rights to which the Funds may be entitled, the expiration date of the
New Warrants shall be extended on a day-for-day basis for each day until the
registration statement is declared effective.

      The Funds also beneficially own warrants to purchase shares of Common
Stock originally issued by the Company to the Funds in February 2000 (the "2000
Warrants"). In the event that the issuance of the New Warrants to the Funds, or
the issuance of any similar warrants to purchase shares of Common Stock to other
holders of Series B Preferred Stock on or about the Closing Date with the same
exercise price, results in a reduction in the per share exercise price of the
2000 Warrants due to the anti-dilution adjustment provisions of the 2000
Warrants (the amount of such reduction in the per share exercise price, the
"Anti-Dilution Adjustment"), then the Funds agree, upon exercise of any 2000
Warrant, to pay to the Company a per share amount equal to the sum of (i) the
then-current per share exercise price of the 2000 Warrant, as payment for the
Common Stock issuable by the Company upon exercise thereof, and (ii) an amount
equal to the Anti-Dilution Adjustment, as partial reimbursement for the cost to
the Company of issuing the New Warrants to the Funds in connection with this
Agreement. Notwithstanding the provisions of this paragraph, the Company and the
Funds may agree to waive any Anti-Dilution Adjustment if they determine that
such waiver is in their respective best interests.

      The Series B Preferred Stock being converted by each Fund, and the number
of Conversion Shares and Warrants issuable to each Fund is set forth in Exhibit
A attached hereto.

      This Agreement shall be of no further force and effect if (i) the
effective price at which Common Stock is issued or deemed to be issued in the
2004 Offering (including shares issuable upon the exercise of the Investor
Warrants and/or other rights to acquire shares of Common Stock issued in the
2004 Offering) is less than $2.90 per share or (ii) the Closing Date does not
occur on or prior to May 31, 2004.

      The terms and conditions of this Agreement shall not be deemed to limit or
otherwise restrict the Funds' right to effect transactions in any securities of
the Company, including, without limitation, any shares of Series B Preferred
Stock held by the Funds or any shares of Common Stock, however acquired, or to
effect the conversion of any shares of Series B Preferred Stock otherwise than
as provided herein, except as specifically provided below.

      Each of the parties hereto hereby represents and warrants to the other
party hereto that this Agreement has been duly authorized executed and delivered
by it and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms. Further, the Company hereby represents
and warrants to the Funds that (a) the Company has full corporate power and
authority and has taken all requisite action on the part of the Company, its
officers, directors and stockholders necessary for (i) the authorization,
execution and delivery of this Agreement, the New Warrants and the registration
rights provisions of the 2004 Offering (the "Transaction Documents"), (ii)
authorization of the performance of all obligations of the Company hereunder or
thereunder, and (iii) the authorization, issuance (or reservation for issuance)
and delivery of the Conversion Shares, the Additional Shares, the New Warrants
and the Warrant Shares (collectively, the "Securities"); (b) the Transaction
Documents constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, liquidation or similar laws relating to,
or affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application; (c) the issuance and sale of
the Securities hereunder will not obligate the Company to issue shares of Common
Stock or other securities to any other person (other than the Funds) and will
not result in the adjustment of the exercise, conversion, exchange or reset
price of any outstanding security other than the Anti-Dilution Adjustment to the
2000 Warrants, including the 2000 Warrants held by persons other than the Funds;
(d) the Conversion Shares and the Additional Shares have been duly and validly
authorized and, when issued and paid for pursuant to this Agreement, will be
validly issued, fully paid and nonassessable, and shall be free and clear of all
encumbrances and restrictions (other than those created by the Funds), except
for restrictions on transfer set forth in the Transaction Documents or imposed
by applicable securities laws; (e) the Additional Shares and the New Warrants
have been duly and validly authorized; (f) upon their due
<PAGE>
issuance, the Additional Shares will be, and upon the due exercise of the New
Warrants the Warrant Shares will be, validly issued, fully paid and
non-assessable free and clear of all encumbrances and restrictions, except for
restrictions on transfer set forth in the Transaction Documents or imposed by
applicable securities laws and except for those created by the Funds; (g) the
Company has reserved a sufficient number of shares of Common Stock for issuance
upon the issuance of the Additional Shares and upon the exercise of the New
Warrants, free and clear of all encumbrances and restrictions, except for
restrictions on transfer set forth in the Transaction Documents or imposed by
applicable securities laws and except for those created by the Funds; (h) the
execution, delivery and performance by the Company of the Transaction Documents
and the offer, issuance and sale of the Securities require no consent of, action
by or in respect of, or filing with, any person, governmental body, agency, or
official other than filings that have been made pursuant to applicable state
securities laws and post-sale filings pursuant to applicable state and federal
securities laws which the Company undertakes to file within the applicable time
periods; (i) at or prior to the Closing Date, the Company shall have taken all
action necessary to exempt (i) the issuance and sale of the Conversion Shares,
(ii) the issuance of the Additional Shares and the issuance of the Warrant
Shares upon due exercise of the New Warrants, and (iii) the other transactions
contemplated by the Transaction Documents from the provisions of any shareholder
rights plan or other "poison pill" arrangement, any anti-takeover, business
combination or control share law or statute binding on the Company or to which
the Company or any of its assets and properties may be subject and any provision
of the Company's Certificate of Incorporation or By-laws that is or could
reasonably be expected to become applicable to the Funds as a result of the
transactions contemplated hereby, including without limitation, the issuance of
the Securities and the ownership, disposition or voting of the Securities by the
Funds or the exercise of any right granted to the Funds pursuant to this
Agreement or the other Transaction Documents; (j) the execution, delivery and
performance of the Transaction Documents by the Company and the issuance and
sale of the Securities will not conflict with or result in a breach or violation
of any of the terms and provisions of, or constitute a default under (i) the
Company's Certificate of Incorporation or the Company's Bylaws, both as in
effect on the date hereof (true and complete copies of which have been made
available to the Funds through the EDGAR system), or (ii)(a) any statute, rule,
regulation or order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company, any subsidiary or any of their
respective assets or properties, or (b) any agreement or instrument to which the
Company or any subsidiary is a party or by which the Company or a subsidiary is
bound or to which any of their respective assets or properties is subject,
except such as would not, individually or in the aggregate, have or reasonably
be expected to result in a material adverse effect on the Company; and (k) in
connection with the 2004 Offering the Company has not and will not enter into
any agreement, arrangement, understanding or commitment with any other holder of
Series B Preferred Stock on terms and conditions more favorable to the holder
than those set forth herein. Moreover, each of the Funds hereby represents and
warrants to the Company that (a) the Fund has full partnership power and
authority and has taken all requisite action on the part of the Fund necessary
for (i) the authorization, execution and delivery of this Agreement, (ii) the
authorization of the performance of all obligations of the Fund hereunder, and
(iii) the conversion of the Excess Shares into the Conversion Shares; (b) this
Agreement constitutes the legal, valid and binding obligation of the Fund,
enforceable against the Fund in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application; (c) the execution, delivery
and performance by the Fund of this Agreement and the conversion of the Excess
Shares into the Conversion Shares by the Fund require no consent of, action by
or in respect of, or filing with, any person, governmental body, agency, or
official; (d) the execution, delivery and performance of this Agreement by the
Fund and the conversion of the Excess Shares into the Conversion Shares by the
Fund will not conflict with or result in a breach or violation of any of the
terms and provisions of, or constitute a default under (i) the Fund's
partnership agreement and/or other charter, governing and organizational
documents, as in effect on the date hereof, or (ii)(a) any statute, rule,
regulation or order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Fund, or (b) any agreement or instrument
to which the Fund is a party or by which the Fund is bound, except such as would
not, individually or in the aggregate, have or reasonably be expected to result
in a material adverse effect on the Fund.
<PAGE>
      If the foregoing accurately reflects our agreement, please execute this
letter in the space provided below and return a copy to the undersigned. This
letter may be executed in counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the same instrument.
This letter shall be governed by, and construed in accordance with, the laws of
the State of New York, without regard to the choice of law principles thereof.

                                            METRETEK TECHNOLOGIES, INC.

                                            By: /s/ A. Bradley Gabbard
                                                ----------------------
                                            Name:   A. Bradley Gabbard
                                            Title:  Exec. V. P.

ACCEPTED AND AGREED:

Special Situations Fund III, L.P.
Special Situations Cayman Fund, L.P.
Special Situations Private Equity Fund, L.P.
Special Situations Technology Fund, L.P.
Special Situations Technology Fund II, L.P.

By: /s/ David Greenhouse
    --------------------
    Authorized Signatory
<PAGE>
                                                                       Exhibit A

<TABLE>
<CAPTION>
                                                                   Total Shares (includes
                                               Excess Shares       Conversion and
Name of Fund                                   Being Converted     Additional Shares)        New Warrants
<S>                                            <C>                 <C>                       <C>
Special Situations Fund III, L.P.                     413                    198,308            198,308
Special Situations Cayman Fund, L.P.                  137                     65,782             65,782
Special Situations Private Equity Fund, L.P.          251                    120,522            120,522
Special Situations Technology Fund, L.P.               32                     15,365             15,365
Special Situations Technology Fund, L.P.              167                     80,187             80,187
                                                    -----                    -------            -------
Totals                                              1,000                    480,164            480,164
                                                    =====                    =======            =======
</TABLE><PAGE>

                                                                    Page 6 of 55

                                  EXHIBIT 10-1

                                    AGREEMENT

         This Agreement dated as of May 25, 2004 by and among High Falls Brewing
Company, LLC, a New York limited liability company with an address at 445 St.
Paul Street, Rochester, New York 14605 ("HFBC") and GBC Liquidating Corp.,
formerly known as The Genesee Brewing Company, Inc., a New York corporation with
offices at GBC Liquidating Corp., c/o Ashley Management Corp., 16 West Main
Street, Rochester, New York 14614 ("GBC"). -

                                    RECITALS

         R1.      HFBC has executed, as Maker, a Subordinated Promissory Note
dated December 15, 2000 in the original principal amount of $4,500,000 in favor
of GBC, as Payee (the "ORIGINAL NOTE").

         R2.      Provided that (a) HFBC and GBC execute this Agreement and (b)
HFBC and GBC execute and deliver an Amended and Restated Subordinated Promissory
Note of even date in the principal amount of $4,000,000, in the form of EXHIBIT
R2 to this Agreement (the "NEW NOTE"), which, when so executed and delivered,
will by its terms amend, restate and replace the Original Note, St. Paul
Associates, LLC has agreed to purchase the New Note pursuant to a Note Purchase
Agreement of even date with GBC (the "NOTE PURCHASE AGREEMENT")..

         R3.      The New Note provides for forgiveness of a portion of the
interest accrued but unpaid under the Original Note and payment of the $100,000
balance of such interest pursuant to a separate agreement between HFBC and GBC.

         R4.      The parties wish to approve the execution and delivery of the
New Note and the purchase by St. Paul Associates, LLC of the New Note, on the
terms and conditions hereinafter set forth.

         NOW, THEREFORE, in consideration of the premises and of the mutual
covenants hereinafter set forth, the parties agree as follows:

         1.       Amendment and Restatement of Original Note. Each of the
parties hereby agrees to amend, restate and replace the Original Note by
execution and delivery of the New Note. In connection therewith, each agrees to
all of the amendments and waivers of the provisions of the Original Note
evidenced by the terms and conditions set forth in the New Note.

         2.       Amended Accrued Interest Amount. GBC agrees that the accrued
but unpaid interest under the Original Note as of the date hereof is waived and
released except to the extent of the $100,000 Amended Accrued Interest Amount,
as reflected in the New Note. GBC further agrees that the Amended Accrued
Interest Amount shall no longer be an obligation of the Original Note and shall
not be an obligation payable under the New Note. However, HFBC agrees to pay the
$100,000 Amended Accrued Interest Amount to GBC prior to HFBC's first

<PAGE>

                                                                    Page 7 of 55

payment of any interest or principal after the date hereof on the Investor Notes
issued by HFBC pursuant to the Offering Summary Statement dated September 5,
2000 and the Rescission Offer dated December 8, 2000; provided, however, that
HFBC's obligation to make such payment to GBC shall terminate if the payment is
not made on or before April 30, 2006 and that both the payment to GBC and any
contemporaneous payment with respect to the Investor Notes must be approved by
all of HFBC's secured creditors that then hold debt to which the New Note is
subordinate ("SENIOR DEBT"), including without limitation the specific written
approval of each of Manufacturers and Traders Trust Company ("M&T BANK") and
Cephas Capital Partners, LP ("CEPHAS"), respectively, as long as it holds Senior
Debt. Among others, M&T Bank and/or Cephas may withhold approval of any such
payment during any period within which payments may not be made with respect to
the "Seller Junior Indebtedness" under the Intercreditor Agreement described
below (a "NON-PAYMENT PERIOD"). HFBC and GBC agree that the provisions of this
paragraph 2 are for the benefit of M&T Bank and Cephas, as well as of HFBC and
GBC, and that such provision cannot be amended without the consent of each of
M&T Bank and Cephas, respectively, as long as it holds Senior Debt..

         3.       Mutual Releases and Indemnification. At the time of execution
of this Agreement, each of HFBC and GBC agrees to execute the mutual releases
attached hereto as EXHIBIT 3. By execution of this Agreement, HFBC hereby agrees
that if GBC pays (whether voluntarily or involuntarily) to M&T Bank or Cephas
the amount of any interest payment made by HFBC and received by GBC on the
Original Note allegedly in violation of the terms of the Intercreditor Agreement
among HFBC, M&T, Cephas and The Genesee Brewing Company, Inc. dated as of
December 15, 2000 (the "INTERCREDITOR AGREEMENT"), HFBC shall reimburse GBC for
the amount of such payment. HFBC hereby authorizes GBC to pay on its behalf the
$120,000 interest payment to Cephas, which is a condition to the Cephas' release
of GBC provided for in the Note Purchase Agreement. No such reimbursement
payment provided for under this Section 3 shall be made during any Non-Payment
Period. The suspension of reimbursement payments during any Non-Payment Period
does not relieve HFBC of its reimbursement obligations hereunder and any
reimbursement payment(s) due GBC shall be made immediately upon the expiration
of any Non-Payment Period. HFBC agrees to notify GBC at the time of each
interest payment made by HFBC to Cephas between the date hereof and July 31,
2004.

         4.       General Terms.

         (a)      Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their successors and assigns.

         (b)      Entire Agreement. This Agreement contains the entire
understanding between the parties and supersedes any prior understanding,
memoranda or other written or oral agreements between or among any of them
respecting the within subject matter. There are no representations, agreements,
arrangements or understandings, oral or written, between or among the parties
relating to the subject matter of this Agreement which are not fully expressed
herein.

         (c)      Modifications: Waiver. No modification or waiver of this
Agreement or any part hereof shall be effective unless in writing and signed by
the party sought to be charged therewith. No waiver of any breach or condition
of this Agreement shall be deemed to be a waiver of any

<PAGE>

                                                                    Page 8 of 55

other or subsequent breach or condition, whether of like or different nature. No
waiver of any breach or condition of this Agreement by or with respect to either
party shall be deemed to be a waiver of the same breach or condition with
respect to the other party. No course of dealing between the parties will be
deemed effective to modify, amend or discharge any part of this Agreement or the
rights or obligations of either party.

         (d)      No Third Party Beneficiary. None of the provisions of this
Agreement shall be for the benefit of, or enforceable by, any person or entity
not a party hereto, except for M&T and Cephas, each of whom shall be a third
party beneficiary of this Agreement.

         (e)      Partial Invalidity. If any provision of this Agreement shall
be held invalid or unenforceable by competent authority, such provision shall be
construed so as to be limited or reduced to be enforceable to the maximum extent
compatible with the law as it shall then appear. The total invalidity or
unenforceability of any particular provision of this Agreement shall not affect
the other provisions hereof and this Agreement shall be construed in all
respects as if such invalid or unenforceable provision were omitted.

         (f)      Notices. Any notice or other communication required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given (i) upon hand delivery, or (ii) on the third day following
delivery to the U.S. Postal Service as certified or registered mail, return
receipt requested and postage prepaid, or (iii) on the first day following
delivery to a nationally recognized United States overnight courier service, fee
prepaid, return receipt or other confirmation of delivery requested, or (iv)
when telecopied or sent by facsimile transmission or electronic mail if an
additional notice is also given under clause (i), (ii) or (iii) above within
three days thereafter. Any such notice or communication shall be delivered or
directed to a party at its address set forth below or at such other address as
may be designated by a party in a notice given to all other parties hereto in
accordance with the provisions of this paragraph.

         Notice to HFBC shall be sent to:    High Falls Brewing Company, LLC
                                             445 St. Paul Street
                                             Rochester, New York 14604
                                             Attention: Chief Operating Officer

         with a copy to:                     Gregory C. Yungbluth, Esq.
                                             Damon & Morey, LLP
                                             298 Main Street, Buffalo, NY 14202

         Notice to GBC shall be sent to:     GBC Liquidating Corp.
                                             c/o Ashley Management Corp.
                                             16 West Main Street
                                             Rochester, New York 14614

         with a copy to:                     Woods Oviatt Gilman LLP
                                             700 Crossroads Building
                                             2 State Street
                                             Rochester, New York 14614
                                             Attention: Gordon Forth, Esq.
<PAGE>

                                                                    Page 9 of 55

         (g)      Governing Law. This Agreement and all rights of the parties
shall be governed by, and construed in accordance with, the laws of the State of
New York pertaining to contracts made and to be wholly performed within such
state, without taking into account conflicts of laws principles.

         (h)      Jurisdiction and Venue. In the event that any legal
proceedings are commenced in any court with respect to any matter arising under
this Agreement, the parties hereto specifically consent and agree that:

                  (i)      the courts of the State of New York and/or the United
         States Federal Courts located in the State of New York shall have
         exclusive jurisdiction over each of the parties and over the subject
         matter of any such proceedings; and

                  (ii)     the venue of any such action shall be in Monroe
         County, New York.

         (i)      Expenses of Parties.

                  (i)      All expenses involved in the preparation,
         authorization, execution and delivery of this Agreement, including,
         without limitation, all fees and expenses of agents, representatives,
         counsel and accountants, shall be borne solely by the party that shall
         have incurred the same.

                  (ii)     In the event of a breach of this Agreement, however,
         the prevailing party(ies) in any resulting litigation shall be
         reimbursed its reasonable attorneys' fees and expenses incurred in such
         litigation by the party against whom judgment is rendered.

         (k)      Headings. The headings contained in this Agreement are
inserted for convenience only and do not constitute a part of this Agreement.

         (l)      Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and all of said
counterparts together shall constitute but one and the same instrument.

                                          HIGH FALLS BREWING COMPANY, LLC

                                          By: /s/ John B. Henderson
                                             -----------------------------------

                                          Name: John B. Henderson

                                          Title: President & COO

<PAGE>

                                                                   Page 10 of 55

                                          GBC LIQUIDATING CORP.

                                          By: /s/ Steven M. Morse
                                             -----------------------------------

                                          Name: Steven M. Morse

                                          Title: Vice President & CFO

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