EHXIBIT 99.2
AMENDMENT TO FORBEARANCE AGREEMENT
AMENDMENT TO FORBEARANCE AGREEMENT
THIS AMENDMENT TO FORBEARANCE AGREEMENT, dated as of October 13, 2009
(this "AMENDMENT"), is made by and among ▇▇▇▇▇▇ FINANCIAL GROUP, INC., a
Delaware corporation (the "COMPANY"), and the holders of the Promissory Notes
(as such term is defined below) on SCHEDULE I hereto (each, a "HOLDER" and
collectively, the "HOLDERS"). Capitalized terms used but not otherwise defined
herein shall have the meanings provided in the Subscription Agreements referred
to below.
W I T N E S S E T H
WHEREAS, the Company and each Holder is a party to a Subscription
Agreement for Promissory Note and Common Stock, dated on or about June 10, 2008
(each, a "SUBSCRIPTION AGREEMENT" and collectively, the "SUBSCRIPTION
AGREEMENTS"), pursuant to which the Company issued to each Holder a promissory
note (the "PROMISSORY NOTES");
WHEREAS, the parties hereto entered into a Forbearance Agreement dated
as of June 5, 2009 (the "FORBEARANCE AGREEMENT"), pursuant to which the Holders
agreed to forbear from exercising their rights and remedies arising from the
Acknowledged Events of Default (as such term is defined in the Forbearance
Agreement);
WHEREAS, (i) pursuant to the amortization scheduled delivered by the
Company to the Holders pursuant to the Forbearance Agreement, the Company was
obligated to make a payment of $67,185 to the Holders on September 10, 2009 (the
"SEPTEMBER 2009 PAYMENT"); (ii) the Company failed to make the September 2009
Payment within 14 days after September 10, 2009 and (iii) such failure
constitutes a Forbearance Default (as such term is defined in the Forbearance
Agreement) (the "SEPTEMBER EVENT OF DEFAULT");
WHEREAS, the Company has asked the Holders to forbear from exercising
their rights and remedies arising from the September Event of Default until the
Forbearance Termination Date (as such term is defined in the Forbearance
Agreement); and
WHEREAS, (i) each Holder recognizes that if such Holder exercises its
remedies under the Promissory Notes and the Forbearance Agreement, the Company
may be forced to suspend operations and the business and prospects of the
Company, including prospects for full repayment of the Promissory Notes, could
be severely damaged and (ii) accordingly, the Holders are, upon and subject to
the terms and conditions specified in this Amendment, willing to forbear from
exercising their rights and remedies arising from the September Event of Default
until the Forbearance Termination Date.
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. The Company acknowledges, confirms and agrees that (a) the Company's
obligation to repay the outstanding principal amount of the Promissory Notes and
all accrued and unpaid interest in respect thereof is unconditional and not
subject to any offsets, defenses or counterclaims, (b) the Holders have
performed fully all of their respective obligations under the Subscription
Agreements and the Forbearance Agreement, (c) by entering into this Amendment,
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the Holders do not waive or release any term or condition of the Subscription
Agreements, the Promissory Notes or the Forbearance Agreement or any of their
rights or remedies under the Subscription Agreements, the Promissory Notes or
the Forbearance Agreement or applicable law or any of the obligations of the
Company thereunder and (d) the Acknowledged Events of Default and the September
Event of Default have occurred and are continuing. The Holders (a) acknowledge
receipt of payment from the Company of all interest payable under the Promissory
Notes through September 10, 2008 and (b) acknowledge, confirm and agree that the
Company has performed fully all of its obligations under the Subscription
Agreements, the Promissory Notes and the Forbearance Agreement (other than the
Acknowledged Events of Default and the September Event of Default).
2. Subject to the terms and conditions of this Amendment, the Holders
hereby agree that the Company may satisfy its obligation to make the September
2009 Payment by making such payment in full on or before October 31, 2009,
provided, however, that that interest on the unpaid principal amount due under
the Promissory Notes (including, for the avoidance of doubt, interest on the
portion of principal attributable to the September 2009 Payment) shall accrue
effective from and after September 10, 2009 at the rate of 15% per annum. A
revised Amortization Schedule reflecting the increased interest rate on the
Promissory Notes is set forth as SCHEDULE II hereto.
3. Subject to the terms and conditions of this Amendment, the Holders
hereby agree to forbear the exercise of rights and remedies otherwise available
under the Subscription Agreements, the Promissory Notes and the Forbearance
Agreement, solely on account of the Acknowledged Events of Default and the
September Event of Default from the date of this Amendment until the occurrence
of a Forbearance Default (as defined below). Notwithstanding the foregoing,
subject to the terms and conditions of this Amendment, the Holders shall be free
to exercise any or all of their rights and remedies arising on account of the
Acknowledged Events of Default and the September Event of Default at any time
after the occurrence of a Forbearance Default. For purposes of this Amendment,
the term "FORBEARANCE DEFAULT" means the existence or occurrence of any or all
of the following: (a) any of Default under the Promissory Notes (other than the
Acknowledged Events of Default and the September Event of Default), (b) the
failure of the Company to make the Payments to the Holders in accordance with
the schedule prescribed by paragraph 2 hereof and, in all events, on or prior to
the Forbearance Termination Date, or (c) a breach by the Company of any other
representation, covenant or condition set forth in the Forbearance Agreement or
this Amendment (other than, with respect to the Forbearance Agreement, the
September Event of Default); and the term "FORBEARANCE TERMINATION DATE" means
June 24, 2011.
4. Nothing set forth herein or contemplated hereby is intended to or
shall be construed as a waiver of or acquiescence to the Acknowledged Events of
Default or the September Event of Default, which shall continue in existence
subject only to the terms of the Forbearance Agreement and this Amendment and
all restrictions in the Promissory Notes applicable after an Event of Default
shall remain applicable except as otherwise expressly provided in the
Forbearance Agreement and this Amendment.
5. Nothing set forth herein or contemplated hereby shall constitute an
agreement by the Holders to forbear the exercise of any of the rights and
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remedies available to the Holders under the Promissory Notes (all of which
rights and remedies are hereby expressly reserved by the Holders) upon and after
the occurrence of a Forbearance Default.
6. The Company hereby acknowledges and consents to all of the terms and
conditions of this Amendment and agrees that this Amendment and all documents
executed in connection herewith do not operate to reduce or discharge any
obligations under the Subscription Agreements, the Promissory Notes or the
Forbearance Agreement. Except as expressly provided herein, this Amendment shall
not modify or affect the Company's obligation to comply fully with any other
duty, term, condition or covenant contained in the Subscription Agreements, the
Promissory Notes and the Forbearance Agreement or the rights and remedies of the
Holders under the Subscription Agreements, the Promissory Notes and the
Forbearance Agreement. Except as expressly modified hereby, all of the terms and
provisions of the Subscription Agreements, the Promissory Notes and the
Forbearance Agreement shall remain in full force and effect.
7. Each Holder hereby agrees that it shall not sell, transfer, assign,
convey, pledge, mortgage, encumber, hypothecate or otherwise dispose of or
suffer the creation of any interest in or lien on (a "TRANSFER") any Promissory
Note without obtaining an agreement in writing in form and substance reasonably
satisfactory to the Company from such transferee to the effect that such
transferee (and any subsequent transferee of such transferee) acknowledges and
agrees that it shall take the Promissory Note in such Transfer subject to the
terms and condition of the Forbearance Agreement and this Amendment (including,
without limitation, paragraph 2 hereof). Each Holder hereby agrees to indemnify
and hold the Company harmless from and against any and all losses, costs,
expenses, claims, damages and other liabilities, including, without limitation,
reasonable attorneys fees and disbursements, which the Company has suffered,
incurred or become subject to arising out of, based upon or otherwise in respect
of a breach by such Holder (or any such transferee) of its obligations pursuant
to this paragraph 7.
8. The Company hereby represents and warrants to the Holders that: (a)
the Company has taken all necessary action to authorize the execution, delivery
and performance of this Amendment; and (b) this Amendment has been duly executed
and delivered by the Company and constitutes the Company's legal, valid and
binding obligation, enforceable in accordance with its terms.
9. Each Holder hereby makes the representations and warranties to the
Company set forth on SCHEDULE II to the Forbearance Agreement and covenants with
the Company as set forth on SCHEDULE II to the Forbearance Agreement. Such
representations, warranties and covenants are hereby incorporated by reference
herein.
10. This Amendment, the Forbearance Agreement, the Subscription
Agreements and the Promissory Notes embody the entire agreement between the
parties hereto and supersede all prior agreements and understandings, oral or
written, if any, relating to the subject matter hereof.
11. This Amendment shall not be deemed or construed to be a
satisfaction, reinstatement, novation, or release of the Promissory Notes, or,
except as expressly provided herein, a waiver by any Holder of any of its rights
thereunder, or at law or in equity.
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12. This Amendment may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall constitute one and the same instrument. Delivery of executed counterparts
of this Amendment by telecopy shall be effective as an original and shall
constitute a representation that an original will be delivered.
13. This Amendment and the rights and obligations of the parties under
this Amendment shall be governed by, and construed and interpreted in accordance
with, the law of the State of West Virginia.
[The parties' signatures appear on the following page.]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Amendment to be duly executed under seal and delivered as of the date
and year first above written.
▇▇▇▇▇▇ FINANCIAL GROUP, INC.
a Delaware corporation
By:
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Name: Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: President
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Name: Name:
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Name: Name:
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Name: Name:
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Name: Name:
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Name: Name:
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Name: Name:
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Name: Name:
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SCHEDULE I
HOLDERS
SCHEDULE II
REVISED AMORTIZATION SCHEDULE
