EXHIBIT
10.49
WRITER'S DIRECT
DIAL: 813-227-8473
WRITER'S E-MAIL:
mbrundage@hwhlaw.com
October 12, 2005
Stratus
Services Group, Inc.
Manalapan, New
Jersey 07726
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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”)
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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 October 21,
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:
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1.
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On
Stratus’ direction which is given hereby, CTF shall wire
transfer to Advantage by 4 p.m. Eastern on October 13, 2005 the sum
of $2,139,868.33 less amounts previously wired from October 7
th 2005 through October 12, 2005 of the $2,389,868.33
presently
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