EXHIBIT
10.59
November 23, 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 November 28,
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 3 pm Eastern on November 23, 2005 the sum
of $ 1,888,261.77 of the $2,468,261.77 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 $58
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