Document:

Exhibit 10.41

    EXHIBIT
      10.41

    

    

    

    

    

    

    

    
      WRITER'S
        DIRECT DIAL:

      (813)
        227-8473

      WRITER'S
        E-MAIL:

      mbrundage@hwhlaw.com

    

    

    

    

    September
      1, 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:

    

    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”). As you know, 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
      16, 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 5:00 p.m. Eastern on September 8, 2005 the sum of $1.5
                million presently owed by Stratus to Advantage pursuant to the terms
                of
                the Agreement (excluding the $600,000 subordinated receivable, which
                will
                remain due and owing)

            

    

     

    
      	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. 

            

    

     

    
      	3.  	
              Provided
                that Stratus complies with all the terms of this forbearance agreement,
                Advantage will continue to perform under the Agreement and forbear
                from
                enforcing the existing defaults through September 15,
                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 15, 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”).

            

    

     

    
      	5.  	
              Stratus
                shall repay the Immediately Due Amount by directing CTF, on a daily
                basis
                starting Friday September 9, 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 14, 2005. The Deferred Amount shall be due in full
                without further notice or demand at 12:00 p.m. Eastern on September
                15,
                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.

            

    

     

    
      	8.  	
              CTF
                has agreed to extend the term of the forbearance agreement through
                September 16, 2005, pursuant to and subject to such 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.

            

    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    HILL,
      WARD & HENDERSON, P.A.

    s/ 

    Michael
      P. Brundage

    

    

    
      	
              ALS,
                LLC

               

               

              By: s/
                Jay Wolin   

               

              Its: CFO    

               

               

            	
              Stratus
                Service Group, Inc.

               

               

              By: s/
                Joseph J. Raymond 

               

              Its: CEO    

            
	
               

              Acknowledged
                and consented to by 

               

              Capital
                TempFunds, Inc.

               

               

              By: s/
                Gerard A. Gabriele  

               

              Its: Senior
                Vice President  

            	 

    

     

     

    2Exhibit 10.42

    

      EXHIBIT
        10.42

      

      

      CAPITAL
        TEMPFUNDS

      a
        division of CAPITAL FACTORS LLC,

      One
        Brixam Green, 15800 John J. Delaney Drive, Suite 300, 

      Charlotte,
        North Carolina 28277

      

      September
        8, 2005

      

      Michael
        A. Maltzman, CFO

      Stratus
        Services Group, Inc.

      500
        Craig
        Road

      Suite
        201

      Manalapan,
        New Jersey 07726

      

      Re:
        AMENDED AND RESTATED FORBEARANCE AGREEMENT (the “Forbearance Agreement”), dated
        as of August 11, 2005, as amended as of August 25, 2005 and September 1,
        2005,
        by and between CAPITAL TEMPFUNDS, a division of CAPITAL FACTORS LLC,
        (“Capital”), and STRATUS SERVICES GROUP, INC. (“Borrower”)

      

      Dear
        Mr.
        Maltzman:

      

      It
        is
        mutually agreed between the parties hereto that the Forbearance Agreement
        be
        further amended as follows:

      

      
        	a)  	
                Clause
                  (a) of the first sentence Section 3 of the Forbearance Agreement,
                  is
                  hereby further amended to replace “September 9, 2005” with “September 16,
                  2005”;

              

      

      

      
        	b)  	
                The
                  proviso relating to the rebate of $50,000 contained at the end
                  of Section
                  4 of the Forbearance Agreement is deleted; and

              

      

      

      
        	c)  	
                Clause
                  (f) of Section 7 of the Forbearance Agreement is hereby amended
                  to replace
                  “August 31, 2005” with “September 16,
                  2005”.

              

      

      

      The
        Borrower hereby represents and warrants to Capital that, after giving effect
        to
        this letter agreement, no Default or Event of Default other than the Designated
        Defaults has occurred and is continuing. Borrower hereby acknowledges and
        agrees
        that a breach of the representation and warranty set forth herein shall
        constitute a Forbearance Default under the Forbearance Agreement and an Event
        of
        Default under the Loan Agreement. This letter agreement shall not be deemed
        to
        be a waiver, amendment or modification of, or consent to or departure from,
        any
        provisions of the Loan Agreement, 

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

      the
        Forbearance Agreement or any other Loan Document or to be a waiver of any
        Forbearance Default under the Forbearance Agreement or Default or Event of
        Default under the Loan Agreement or any other Loan Document whether arising
        before or after the date hereof (except for the specific amendment referenced
        above in this letter agreement), and this letter agreement shall not preclude
        the future exercise of any right, remedy, power or privilege available to
        Capital whether under the Forbearance Agreement, the Loan Agreement, the
        other
        Loan Documents or otherwise. All capitalized terms not otherwise defined
        herein
        shall have the meanings given to them in the Forbearance Agreement.

      

      This
        letter agreement shall be deemed to be a Loan Document for all purposes.
        This
        letter agreement may be executed in one or more counterparts, each of which
        shall be deemed an original and all of which taken together shall constitute
        one
        and the same agreement. Any signature delivered by a party by facsimile
        transmission shall be deemed to be an original signature hereto.

       

      If
        the
        above provisions are satisfactory to you, please execute this letter agreement
        as set forth below and return it to Capital.

      

      Capital
        TempFunds, a division of Capital Factors, LLC

      

      

      By: s/
        Gerard A. Gabriele  

      

      Its: Senior
        Vice President  

      

      Acknowledged
        and Agreed:

      Stratus
        Service Group, Inc.

      

      

      By: s/
        Joseph J. Raymond   

      

      Its: CEO

       

           

      2

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