EXHIBIT 10.1

                              FORBEARANCE AGREEMENT

         THIS   FORBEARANCE   AGREEMENT,   dated  as  of  June  5,  2009   (this
"FORBEARANCE"),  is made by and among JACOBS 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,  (i) pursuant to the terms of the Promissory  Notes, the first
two of 20  equal  quarterly  installments  of  principal  and  interest  payable
thereunder  were to have been paid on December  10, 2008 and March 10, 2009 (the
"INITIAL  AMORTIZATION   PAYMENTS");   (ii)  as  the  result  of  upheavals  and
dislocations in the capital markets,  the Company was unable to either refinance
the  indebtedness  evidenced  by  the  Promissory  Notes  or  make  the  Initial
Amortization Payments to the Holders when due; and (iii) an Event of Default (as
such term is defined in the Promissory  Notes) has occurred under the Promissory
Notes as a result of the Company's failure to make pay the Initial  Amortization
Payments  within 14 days after same  became due and payable  (the  "ACKNOWLEDGED
EVENTS OF DEFAULT");

         WHEREAS,  the Company  continues  diligent  efforts to obtain permanent
financing to repay the outstanding balance due under the Promissory Notes, while
at the same time  pursuing the business  plans of the Company with the intention
of  increasing  the  Company's  profitability  and cash flow from  operations to
enable it to meet its  obligations  to make quarterly  amortization  payments in
accordance with the terms of the Promissory Notes;

         WHEREAS,  the Company has asked the Holders to forbear from  exercising
their rights and remedies arising from the Acknowledged  Events of Default until
the Forbearance Termination Date (as defined below); and

         WHEREAS,  (i) each Holder  recognizes that if such Holder exercises its
remedies  under the  Promissory  Notes,  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  Forbearance,  willing to forbear from exercising their rights
and  remedies  arising  from  the  Acknowledged  Events  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:


<PAGE>

         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,  (c) by entering into this Forbearance,  the Holders do not waive or
release any term or condition of the  Subscription  Agreements or the Promissory
Notes or any of their rights or remedies  under the  Subscription  Agreements or
the Promissory  Notes or applicable law or any of the obligations of the Company
thereunder  and (d) the  Acknowledged  Events 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 and the  Promissory  Notes
(other than the Acknowledged Events of Default).

         2. Subject to the terms and conditions of this Forbearance, the Holders
hereby  agree that the Company may  satisfy its  obligation  to make the Initial
Amortization  Payments  by making 8  consecutive  quarterly  payments of $67,185
each,  commencing  September  10,  2009,  and  continuing  on the payment  dates
prescribed by the  Amortization  Schedule for the Promissory Notes and ending on
June 10, 2011  (collectively,  the  "PAYMENTS"),  it being  understood  that the
Payments  shall  result in the payment of the  principal  of and interest on the
unpaid portion of the Initial Amortization Payments at the rate of 10% per annum
from and after the originally  scheduled  payment  dates.  The Payments shall be
allocated  among and paid to the Holders in accordance  with the balances due to
each. The Company may at any time prepay the balance  remaining due with respect
to the  principal  of the  Initial  Amortization  Payments  by paying the amount
thereof, together with interest accrued through the date of such prepayment.

         3. Subject to the terms and conditions of this Forbearance, the Holders
hereby agree to forbear the exercise of rights and remedies otherwise  available
under the Subscription  Agreements and the Promissory Notes solely on account of
the Acknowledged  Events of Default from the date of this Forbearance  until the
occurrence of a Forbearance Default.  Notwithstanding the foregoing,  subject to
the terms and  conditions  of this  Forbearance,  the  Holders  shall be free to
exercise  any or all of their  rights  and  remedies  arising  on account of the
Acknowledged Events of Default at any time after the occurrence of a Forbearance
Default.  For purposes of this Agreement,  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),  (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 this Forbearance;  and
the term "FORBEARANCE TERMINATION DATE" means June 24, 2011.

         4. The Company hereby represents and warrants to the Holders that there
is no indebtedness  for money borrowed of the Company or any of its subsidiaries
outstanding  that is senior in right of payment to the Promissory  Notes. For so
long as the Promissory Notes shall remain  outstanding,  the Company agrees that
it shall  not,  and shall  not  permit  any of its  subsidiaries  to,  incur any
indebtedness  for  money  borrowed  that is senior  in right of  payment  to the
Promissory Notes, PROVIDED, that the foregoing shall not restrict the Company or
any of its subsidiaries  from incurring  indebtedness for money borrowed that is

                                      -2-
<PAGE>

senior in right of payment to the  Promissory  Notes issued in exchange  for, or
the net proceeds of which are used to refinance or retire, the Promissory Notes.
The  provisions of this  paragraph 4 shall  terminate and be of no further force
and effect upon the  payment by the Company of the  Payments in full on or prior
to the Forbearance Termination Date.

         5. For so long as the Promissory  Notes shall remain  outstanding,  the
Company  agrees that it shall not  declare or pay any cash  dividend or make any
cash  distribution  on or with  respect  to any class or  series of its  capital
stock.  The provisions of this paragraph 5 shall  terminate and be of no further
force and effect upon the  payment by the Company of the  Payments in full on or
prior to the Forbearance Termination Date.

         6. The Company and each Holder  hereby  acknowledge  and agree that the
obligations  of the Company under the  Promissory  Notes and hereunder  shall be
entitled  to the  benefits  of that  certain  General  Hypothecation  and Pledge
Agreement,  of even date herewith (the "PLEDGE  AGREEMENT"),  by and between the
Company  and the  Collateral  Agent  (as  defined  below).  Each  holder  hereby
irrevocably  designates and appoints  ______________  as the initial  collateral
agent (the "COLLATERAL  AGENT") for the ratable benefit of the Holders under the
Pledge Agreement and each Holder irrevocably authorizes the Collateral Agent, in
such  capacity,  to take such action on its behalf under the  provisions  of the
Pledge  Agreement  and to exercise  such  powers and perform  such duties as are
expressly  delegated  to the  Collateral  Agent  by  the  terms  of  the  Pledge
Agreement, together with such other powers as are reasonably incidental thereto.
Each  Holder  further  agrees  that it shall not be  entitled  to  exercise  any
remedies  under the  Promissory  Notes and hereunder at any time when there is a
Collateral  Agent  serving as such under the Pledge  Agreement.  The  Collateral
Agent may resign as  Collateral  Agent upon ten (10) days' notice to each Holder
and the Company.  If the Collateral Agent shall resign as Collateral Agent under
the  Pledge  Agreement,   then  the  Holders  representing  a  majority  of  the
outstanding principal amount of all loans evidenced by the Promissory Notes (the
"MAJORITY HOLDERS") shall appoint from among such Holders a successor Collateral
Agent for the Holders, which successor agent shall be subject to approval by the
Company (which  approval  shall not be  unreasonably  withheld),  whereupon such
successor Collateral Agent shall succeed to the rights, powers and duties of the
initial Collateral Agent, and the former Collateral  Agent's rights,  powers and
duties as Collateral Agent shall be terminated, without any other or further act
or deed on the  part  of such  former  Collateral  Agent  or any  Holder.  If no
successor  collateral agent has accepted  appointment as Collateral Agent by the
date that is ten (10) days  following a retiring  Collateral  Agent's  notice of
resignation,  the retiring  Collateral  Agent's  resignation shall  nevertheless
thereupon become effective,  and the Holders shall assume and perform all of the
duties of the  Collateral  Agent  hereunder  until  such  time,  if any,  as the
Majority Holders appoint a successor agent as provided for above. The provisions
of this  paragraph 6 shall  terminate and be of no further force and effect upon
the  payment  by  the  Company  of the  Payments  in  full  on or  prior  to the
Forbearance Termination Date.

         7. For so long as the Promissory  Notes shall remain  outstanding,  the
Company shall permit one (1)  representative  of the Holders (the "OBSERVER") to
attend all  meetings of the board of  directors  of the  Company  (the "BOARD OF
DIRECTORS");  PROVIDED, that notwithstanding  anything to the contrary contained
herein,  (x) the Observer shall not have any right to vote, whether the Observer
attends such meeting in person, telephonically, or otherwise and (y) the Company
shall have the right to condition  the  Observer's  attendance of any meeting of
the Board of  Directors  on the  execution  and  delivery  by the  Observer of a
customary   confidentiality   agreement   in  form  and   substance   reasonably
satisfactory  to the Company.  The Company shall (i) give the Observer notice of

                                      -3-
<PAGE>

all such meetings,  at substantially  the same time as furnished to the Board of
Directors  and  (ii)  provide  to  the  Observer  all  notices,   documents  and
information furnished to the Board of Directors whether at or in anticipation of
such meetings, or in connection with any material actions by written consents or
otherwise,  at substantially  the same time furnished to the Board of Directors.
The Company shall have the right to exclude the Observer from (x) any portion of
a meeting of the Board of Directors and/or committee and/or (y) the distribution
of a certain  portion of the  documentation  provided to the Board of  Directors
and/or  committee  in  connection  with such  meeting,  if the  presence of such
Observer or the receipt of such materials  would,  in the reasonable  opinion of
outside counsel to the Company, result in the loss of attorney-client  privilege
of the  Company or any of its  Affiliates  with  respect to such  portion of the
meeting or documents. If  _____________________  is no longer willing or able to
serve as the  Observer,  then a successor  Observer  shall be  designated by the
Majority Holders (which successor Observer shall be reasonably acceptable to the
Company).  The  provisions  of this  paragraph  7 shall  terminate  and be of no
further force and effect upon the payment by the Company of the Payments in full
on or prior to the Forbearance Termination Date.

         8.  Effective  as of the date hereof,  the Company  shall issue to each
Holder a number of Common  Shares equal to such  Holder's Pro Rata Share of 2.8%
of the outstanding Common Shares (the "SHARES").

         9.  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,  which shall  continue in  existence  subject  only to the terms of the
Forbearance and all  restrictions in the Promissory  Notes  applicable  after an
Event of Default shall remain applicable except as otherwise  expressly provided
in this Forbearance.

         10. Nothing set forth herein or contemplated hereby shall constitute an
agreement  by the  Holders  to  forbear  the  exercise  of any of the rights and
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.

         11. The Company  hereby  acknowledges  and consents to all of the terms
and  conditions of this  Forbearance  and agrees that this  Forbearance  and all
documents executed in connection  herewith do not operate to reduce or discharge
any  obligations  under the  Subscription  Agreements or the  Promissory  Notes.
Except as expressly provided herein, this Forbearance 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 and the Promissory Notes or
the rights and remedies of the Holders under the Subscription Agreements and the
Promissory Notes (including,  without limitation,  the obligation of the Company
to issue  additional  Common Shares to the Holders pursuant to Section 2.1(c) of
the  Subscription  Agreements  commencing March 10, 2009 if the Promissory Notes
remain outstanding as of such date). Except as expressly modified hereby, all of
the terms and provisions of the Subscription Agreements and the Promissory Notes
shall remain in full force and effect.

         12. 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

                                      -4-
<PAGE>

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  this  Forbearance  (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 12.

         13. 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 Forbearance; (b) this Forbearance 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;  and (c) the
Company has the power and  authority  to issue the Shares,  and,  when issued in
accordance herewith, the Shares shall be fully paid and non-assessable.

         14. Each Holder hereby makes the  representations and warranties to the
Company set forth on SCHEDULE  II hereto and  covenants  with the Company as set
forth on SCHEDULE II hereto. Such representations,  warranties and covenants are
hereby incorporated by reference herein.

         15. This Forbearance, the Subscription Agreements, the Promissory Notes
and the Pledge Agreement 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.

         16.  This  Forbearance  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.

         17. This  Forbearance  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  Forbearance by telecopy shall be effective as an original
and shall constitute a representation that an original will be delivered.

         18.  This  Forbearance  and the rights and  obligations  of the parties
under this  Forbearance  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.]

                                      -5-
<PAGE>



         IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this  Forbearance to be duly executed under seal and delivered as of the date
and year first above written.

                                             JACOBS FINANCIAL GROUP, INC.
                                             a Delaware corporation

                                             By:
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Name:                                        Name:    John M. Jacobs
                                             Title:   President


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<PAGE>




                                   SCHEDULE I

                                     HOLDERS




<PAGE>
                                   SCHEDULE II

            REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE HOLDERS

         Defined  terms used in this  SCHEDULE II and not  otherwise  defined in
this  SCHEDULE  II  shall  have  the  meanings  ascribed  to such  terms  in the
Forbearance to which this SCHEDULE II is attached.

         Each Holder  represents  and  warrants to, and agrees with the Company,
that:

         1. The Forbearance has been duly authorized,  executed and delivered by
the Holder, and constitutes a legal, valid and binding obligation of the Holder,
enforceable in accordance with its terms.

         2. The Holder understands the confidential nature of the subject matter
of the  Forbearance  and agrees not to  disclose  the name of the Company or any
matters associated  therewith prior to the public announcement by the Company of
the transactions  effected hereby.  Further,  Holder understands that trading in
the Common Stock of the Company based upon information  derived from the Company
in the process of the issuance of the Shares is strictly  prohibited and subject
to legal prohibitions and sanctions under federal securities laws.

         3. The Holder has had the opportunity to review the Forbearance and the
Pledge Agreement with its counsel or other financial advisors.

         4. The Holder has  knowledge  and  experience in financial and business
matters  sufficient  to  enable  it to  evaluate  the  merits  and  risks  of an
investment in the Shares.

         5. The Holder is acquiring  the Shares  hereunder  for its own account,
solely for investment and not with a view to the resale or distribution  thereof
within the meaning of the  Securities  Act of 1933, as amended (the  "Securities
Act").

         6. The  Holder  understands  that its  acquisition  of the Shares is an
illiquid and may be a long-term investment; and, without impairing its financial
condition,  it is able to hold the Shares for an  indefinite  period of time and
would  be  able to  suffer  a  complete  loss of its  investment  without  undue
financial hardship.

         7. The Holder has had an  opportunity  to ask  questions of and receive
answers from the Company and its officers  concerning  the Company and the terms
and  conditions of the Shares and has had an  opportunity  to obtain  additional
information  from the Company to the extent deemed necessary or advisable by the
Holder in order to verify the accuracy of the information  obtained.  The Holder
has,  to the extent  deemed  necessary  by the  Holder,  consulted  with its own
advisors  (including the Holder's  attorney,  accountant or investment  advisor)
regarding the Holder's investment in the Shares and understands the significance
and effect of its  representations,  warranties,  acknowledgments and agreements
set forth in the Forbearance.

         8. The Holder has reviewed copies of the public filings of the Company,
including those on Forms 10-KSB and 10-QSB. The Holder has, to the extent deemed
necessary  by  the  Holder,   completed  due  diligence  and  such   independent

<PAGE>

investigation concerning the Company and the terms and conditions of the sale of
the Shares contemplated hereby as it has deemed advisable.

         9. The Holder  acknowledges  that neither the  Company,  nor any of its
officers,  representatives  or affiliates,  nor any other person or entity,  has
made any representations or warranties with respect to the Company, its business
or the Shares other than as set forth in the Forbearance.

         10. The Holder  understands  that the Shares  have not been  registered
under the  Securities  Act in reliance upon an exemption  from the  registration
requirements  of the Securities  Act pursuant to Section 4(2) thereof,  that the
Shares have not been registered under applicable state securities laws, and that
the Shares may not be sold or otherwise  disposed of unless registered under the
Securities Act and applicable  state securities laws (the Company being under no
obligation  to so register  such  Shares) or exempted  from  registration.  [The
Holder further understands that the exemption from registration afforded by Rule
144 promulgated under the Securities Act is not presently available with respect
to the Shares.]

         11. The Holder is an  "Accredited  Investor" as such term is defined in
Rule 501 of Regulation D promulgated  under the  Securities  Act. The Holder has
previously  accurately  completed and delivered to the Company Appendix A to the
Subscription  Agreement  and the  information  set forth on such Appendix A with
respect to such Holder is true and correct as of the date hereof.

         12. The Holder  acknowledges that neither the Company nor any person or
entity  acting on its behalf has offered to sell any of the Shares to the Holder
by means of any form of general  solicitation or advertising,  including without
limitation  (i)  any  advertisement,  article,  notice  or  other  communication
published  in any  newspaper,  magazine  or similar  media,  or  broadcast  over
television or radio,  and (ii) any seminar or meeting whose  attendees have been
invited by any general solicitation or general advertising.