Exhibit 10.2

 

FORBEARANCE AGREEMENT

 

THIS FORBEARANCE AGREEMENT (this “Agreement”), is made as of April 1, 2016, by
and between EFACTOR GROUP CORP., a Nevada corporation, with its principal
offices located at 340 West 42nd Street, Suite 880, New York, NY 10108 (the
“Company”), MAGNA EQUITIES II, LLC, a New York corporation, with its address at
40 Wall Street, New York, New York 10005 (“Magna”) and Increasive Ventures B.V.
with its principal address at Stevensweg 2, 2141 VL Vijfhuizen, The Netherlands
(“IV”, each a “Lender” and together with Magna, collectively, the “Lenders”).

 

RECITALS

 

A.           The Company and Lenders entered into that certain Securities
Purchase Agreement dated as of April 1, 2016 (the “Purchase Agreement”), that
certain Security Agreement, dated as of April 1, 2016 (the “Security Agreement”)
and that certain Stock Pledge and Security Agreement, dated as of April 1, 2016
(the “Pledge Agreement”). Capitalized terms used and not otherwise defined in
this Agreement shall have the meaning set forth or provided for in the Purchase
Agreement.

 

B.           The Company issued to Lenders the promissory notes, on the dates
and upon the terms as set forth on Exhibit A hereto (the “Prior Notes”).

 

C.           The Company hereby acknowledges and confirms that events of default
have occurred and are continuing for each of the Prior Notes by reason of the
Company’s failure to (collectively, the “Specified Events of Default”) pay in
full upon the respective maturity dates the outstanding principal balance of
each of the Prior Notes together with accrued and unpaid interest and other
amounts thereon. The Company further acknowledges and confirms that the
Specified Events of Default have not been waived by the Lenders.

 

D.           The Company acknowledges and agrees that, as a result of the
existence of the Specified Events of Default, the Lenders have the right to
exercise their rights and remedies under the Prior Notes. The Company has
requested, notwithstanding that the Specified Events of Default exist and are
continuing under the Prior Notes and have not been waived or cured, that the
Lenders forbear from exercising remedial rights on account of such Specified
Events of Default during the period of time (hereinafter, the “Forbearance
Period”) commencing as of the date hereof and ending on the Termination Date (as
defined below).

 

E.           Solely with respect to the Specified Events of Default, the Lenders
have agreed to forbear from exercising remedial rights under the Prior Notes,
applicable law and otherwise, but only subject to and in accordance with the
terms and conditions set forth herein. Except as expressly set forth in this
Agreement, the agreements of the Lenders to forbear in the exercise of their
respective rights and remedies under the Prior Notes in respect of the Specified
Events of Default during the Forbearance Period do not in any manner whatsoever
limit any right of the Lenders to insist upon strict compliance with this
Agreement or the Prior Notes during the Forbearance Period or thereafter.

 

1 

 

 

F.           Nothing has occurred that constitutes or otherwise can be construed
or interpreted as a waiver of, or otherwise impair, modify or limit in any
respect, any rights or remedies the Lenders have or may have, arising as the
result of any defaults or events of default under the Prior Notes (including the
Specified Events of Default) applicable law or in equity. The Lenders’ actions
in entering into this Agreement are without prejudice to the rights of the
Lenders to pursue any and all remedies under the Prior Notes, pursuant to
applicable law or in equity available to them in their sole discretion upon the
termination (whether upon expiration thereof or otherwise) of the Forbearance
Period and thereafter.

 

G.           Identification of the Specified Events of Default in this Agreement
does not constitute an agreement by the Lenders that there are no other defaults
or events of default currently existing under the Prior Notes, and the Lenders
have reserved all rights and remedies with respect to any such other defaults or
events of default under the Prior Notes.

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and each of the Lenders agree as follows:

 

AGREEMENTS

 

1.           Incorporation of Recitals; Extension of Maturity Date; Forbearance.

 

(a)           Incorporation of Recitals. The Recitals to this Agreement are
hereby incorporated by reference as fully set forth herein and the Company
represents, warrants, and acknowledges that such Recitals are true and correct.
The Company hereby acknowledges and confirms (i) the occurrence and continuance
of the Specified Events of Default, (ii) that the Specified Events of Default
are material in nature, (iii) that the Specified Events of Default have not been
waived by the Lenders or cured by the Company, and (iv) that the Lenders are
entitled to exercise all rights and remedies under the Prior Notes.

 

(b)          Forbearance Period. Subject to the terms and conditions herein set
forth and in reliance upon the Company’s representations, acknowledgments,
agreements and warranties herein contained and contained in the Purchase
Agreement, the Lenders, without waiving the Specified Events of Default or the
Lenders’ rights and remedies at law, or in equity relating thereto, and subject
to the terms and conditions set forth herein, agree to forbear in the exercise
of their rights and remedies under the Prior Notes based on the Specified Events
of Default until the earlier to occur of (the “Termination Date”): (a) 5 p.m.
prevailing Eastern Time on April 1, 2017; or (b) a Forbearance Event of Default
(as defined hereinafter) under this Agreement. On the Termination Date, the
agreement of the Lenders to forbear from exercising their respective rights and
remedies under the Prior Notes based on the Specified Events of Default will
automatically and immediately terminate. The Lenders’ agreement to forbear is
conditional, temporary and limited in nature and shall not be deemed: (i) to
preclude or prevent the Lenders from exercising any rights and remedies under
the Prior Notes, applicable law or otherwise arising on account of (A) any
default or event of default under the Prior Notes other than the Specified
Events of Default, or (B) the Specified Events of Default from and after the
Termination Date, (ii) to effect any amendment of the Prior Notes, which shall
remain in full force and effect in accordance with their terms; (iii) to
constitute a waiver of the Specified Events of Default or any other default or
event of default under the Prior Notes (whether now existing or hereafter
occurring) (each default or event of default other than any Default, an “Other
Default”) or any term or provision of the Prior Notes; or (iv) to establish a
custom or course of dealing among the Company and the Lenders. The Company
further acknowledges and agrees that interest on the Prior Notes will continue
to accrue in accordance with the terms of the Prior Notes.

 

2 

 

 

(c)          No Waiver. Nothing in this Agreement should in any way be deemed
(i) a waiver of the Specified Events of Default or any Other Default or any term
or provision of the Prior Notes or (ii) an agreement to forbear from exercising
any rights or remedies with respect to the Specified Events of Default (except
as expressly set forth herein) or any Other Default. The Lenders have not waived
or released, are not by this Agreement waiving or releasing, and have no present
intention of waiving or releasing, the Defaults or any Other Default, or any
remedies or rights of the Lenders with respect thereto, all of which are hereby
expressly reserved. Any waiver of the Specified Events of Default or any Other
Default shall be effective only if set forth in a written instrument executed by
each Lender and the Company.

 

(d)          Forbearance Events of Default. Each of the following constitutes an
immediate default and event of default (a “Forbearance Event of Default”) under
this Agreement and, notwithstanding anything contained in any Prior Notes,
including any provisions requiring any Lender to provide the Company or any
other person with prior notice or an opportunity to cure:

 

(i)Any representation or warranty made by the Company in this Agreement or any
document or statement furnished or to be furnished by or on behalf of the
Company in connection with this Agreement is false or misleading in any material
respect as of the date made.

 

(ii)Failure of the Company to observe any term, condition, or covenant set forth
in this Agreement.

 

(iii)The validity, binding nature of, or enforceability of any material term or
provision of this Agreement is disputed by, on behalf of, or in the right or
name of the Company or any material term or provision of this Agreement is found
or declared to be invalid, avoidable, or unenforceable by any court of competent
jurisdiction.

 

(iv)The occurrence of an Other Default; and,

 

(v)The filing of a petition under any bankruptcy or insolvency law either by or
against the Company or any Subsidiary.

 

2.           Acknowledgment of and Reaffirmation of Obligations. The Company
hereby acknowledges, confirms and agrees that as of the date of this Agreement,
the unpaid principal balance of each of the Prior Notes is as set forth on
Exhibit A hereto and the accrued and unpaid interest due and owing to the
Lenders on the Prior Notes is as set forth on Exhibit A hereto. The principal
balanced and accrued and unpaid interest on the Prior Notes as set forth on
Exhibit A hereto shall be referred to as the “Obligations.”

 

3 

 

 

3.           Consideration; Grant of Security Interests. As partial
consideration for the Lenders’ forbearance and to ensure the complete and timely
payment of the Obligations of the Company under the Prior Notes, now or
hereafter existing from time to time, the Company has entered into the Security
Agreement, pursuant to which the Company granted to the Lenders a valid and
continuing first priority security interest and Lien on the Collateral (as such
terms are defined in the Security Agreement) and the Pledge Agreement, pursuant
to which the Company pledged all of the issued and outstanding capital stock of
its Subsidiaries (as such term is defined in the Pledge Agreement) to the
Lenders.

 

4.           Authority to File. The Company, with respect to any Collateral in
which it has an interest, by this Agreement irrevocably authorizes Lenders at
any time and from time to time to file in any jurisdiction any initial financing
statements and amendments thereto that (i) indicate the Collateral as the
collateral covered thereby, regardless of whether any particular asset comprised
in the Collateral falls within the scope of Article 9 of the Uniform Commercial
Code of the applicable jurisdiction, (ii) describes the Collateral in generic
terms such as “all assets” or similar description, and (iii) contain any other
information required by Article 9 of the applicable Uniform Commercial Code for
the sufficiency or filing office acceptance of any financing statement or
amendment. The Company also ratifies its authorization for Lenders to have filed
in any jurisdiction any like initial financing statements or amendments thereto
if filed prior to the date of this Agreement.

 

5.           Representations and Warranties. In order to induce Lenders to enter
into this Agreement, the Company, hereby acknowledges, represents, warrants to
Lenders that:

 

(a)          Each of the representations and warranties made by the Company to
the Lenders in each of the Purchase Agreement, the Security Agreement and the
Pledge Agreement are incorporated herein by reference and remain accurate, true
and correct as of the date hereof.

 

(b)          The Company: (i) is a corporation duly organized, validly existing
and in good standing, under the laws of the State of Nevada, (ii) has all
requisite corporate power and authority to own its properties and assets and to
carry on its business as now being conducted, (iii) has all requisite legal and
corporate power and authority to enter into this Agreement and to carry out and
perform its obligations under the terms hereof.

 

(c)          The Company’s execution, delivery and performance of this Agreement
will not violate, or conflict with or constitute a default under, the terms of
(i) the Company’s certificate of incorporation or bylaws (ii), any statute,
regulation, ordinance, rule of law, or (iii) agreement, contract, mortgage,
indenture, bond, bill, note, judgment, order or decree of any court or
arbitrator to which the Company is a party or other instrument or writing
binding upon the Company or to which the Company is subject, except in the case
of (iii) as would not result in a material adverse effect on the business,
operations, assets, financial condition or prospects of the Company or its
subsidiaries, if any, taken as a whole.

 

4 

 

 

(d)          All corporate action on the part of the Company, its officers and
directors necessary for the Company’s authorization, execution and delivery of,
and the performance of Company’s obligations under this Agreement has been
taken, including the approval by the disinterested directors of the Company. The
Company has duly executed and delivered this Agreement. This Agreement
constitutes a valid and legally binding obligation of the Company, enforceable
in accordance with its terms, except as enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization or other similar laws of
general application relating to or affecting the enforcement of creditors’
rights generally and (ii) the effect of rules of law governing the availability
of equitable remedies.

 

6.           Miscellaneous.

 

(a)          Assignment. The provisions of this Agreement shall be binding upon
and inure to the benefit of the respective successors, assigns, heirs,
beneficiaries and representatives of the Company and each of the Lenders;
provided, however, that no party hereto may assign or transfer any of its rights
or obligations under this Agreement without the prior written consent of the
other parties and any prohibited assignment shall be void.

 

(b)          Headings. Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.

 

(c)          Reservation of Rights. This Agreement is not (a) a waiver of or
consent to a modification of any term of the Prior Notes, and (b) except as
expressly set forth herein, does not prejudice any right or rights which the
Lenders now have or may have in the future. The Lenders hereby reserve and
preserve, and the Company hereby acknowledges and agrees that the Lenders have
not waived, the Lenders’ rights and remedies under the Prior Notes, at law, and
in equity with respect to the Specified Events of Default, any Forbearance Event
of Default, or any other matters

 

(d)          Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY, CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCEPT AS
REQUIRED BY MANDATORY PROVISIONS OF LAW AND EXCEPT TO THE EXTENT THAT THE
VALIDITY AND PERFECTION OR THE PERFECTION AND THE EFFECT OF PERFECTION OR
NON-PERFECTION OF THE SECURITY INTEREST CREATED HEREBY, OR REMEDIES HEREUNDER,
IN RESPECT OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAW OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK.

 

(e)          Consent to Forum. ANY LEGAL ACTION, SUIT OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY DOCUMENT RELATED THERETO SHALL BE BROUGHT IN THE COURTS
OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK, AND APPELLATE COURTS THEREOF,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH PARTY HERETO HEREBY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH PARTY HERETO
HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF
VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION, SUIT OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE
RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.

 

5 

 

 

(f)          Waiver of Jury Trial. EACH GRANTOR AND (BY ITS ACCEPTANCE OF THE
BENEFITS OF THIS AGREEMENT) THE COMPANY WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED ON, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER TRANSACTION DOCUMENTS, OR ANY
COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT OR OTHER
ACTION OF THE PARTIES HERETO.

 

(g)          Counterparts; Effectiveness. This Agreement and any amendments,
waivers, consents, or supplements may be executed in any number of counterparts
in separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all of which counterparts together shall constitute but
one and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto. Delivery of an
executed counterpart of a signature page to this Agreement, any amendments,
waivers, consents or supplements by Facsimile shall be as effective as delivery
of a manually executed counterpart thereof.

 

[Remainder of page intentionally left blank]

 

6 

 

 

IN WITNESS WHEREOF, this Agreement is executed and delivered as of the date
first written above.

 

EFACTOR GROUP CORP.       By:  /s/ Mark Noffke     Name: Mark Noffke     Title:
Chief Financial Officer         MAGNA EQUITIES II, LLC         By:  /s/ Joshua
Sason     Name:  Joshua Sason     Title:  Managing Member           INCREASIVE
VENTURES B.V.           By: /s/ Ad Prins     Name: Ad Prins     Title: Managing
Director  

 

7 

 

 

EXHIBIT A

 

Note  Issue Date  Principal Amount   Maturity Date Increasive Ventures BV 
7/31/2015   1,250,000.00   12/31/2015 Magna Tranche I Convertible Note 
3/2/2015   175,000.00   3/1/2016 Magna Tranche I Third Party Note Purchase 
3/2/2015   200,000.00   3/1/2016 Magna Tranche II Convertible Note  3/15/2015 
 15,000.00   3/14/2016 Magna Tranche III Convertible Note  3/27/2015 
 29,500.00   3/26/2016 Magna Tranche IV Third Party Note Purchase  4/8/2015 
 200,000.00   4/7/2016 Magna Tranche V Convertible Note  5/1/2015   53,000.00  
4/30/2016 Magna Tranche VI Third Party Note Purchase  5/22/2015   200,000.00  
5/21/2016 Magna Tranche VII Convertible Note  5/27/2015   85,000.00   5/26/2016