Re: AMENDED AND RESTATED FORBEARANCE AGREEMENT

EXHIBIT 10.40

CAPITAL TEMPFUNDS

a division of CAPITAL FACTORS LLC,

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

Charlotte, North Carolina 28277

September 1, 2005

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

Dear Mr. Maltzman:

In accordance with Section 3 of the Forbearance Agreement, the undersigned hereby agree that clause (a) of the first sentence of Section 3 of the Forbearance Agreement is hereby further amended to replace “September 2, 2005” with “September 9, 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 represent