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EXHIBIT 10.1
FORBEARANCE AGREEMENT
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Whereas, Winfield Capital Corp. is a Small Business Investment
Company
("SBIC") licensed and regulated by the U.S. Small Business
Administration
("SBA") in accordance with the Small Business Investment Act of
1958, as
amended, (the "Act") and the regulations promulgated
thereunder;
Whereas, as of March 23, 2005, Winfield Capital Corp.
("Winfield") is
indebted to SBA, in the approximate amount of $4,997,111.73,
plus interest which
continues to accrue after March 23, 2005;
Whereas, Winfield has violated SBA's regulations with respect
to
capital impairment and acknowledges that SBA is entitled to a
judgment and to be
appointed Receiver pursuant to the Act;
Whereas, SBA agrees to temporarily forebear on seeking the
above
mentioned remedies, based on the conditions set forth in this
agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements
herein contained, the parties hereto agree as follows:
1. As of March 23, 2005, Winfield is indebted to SBA in the
approximate amount of $4,997,111.73, plus interest which
continues to accrue
after March 23, 2005 ("the Indebtedness"). Winfield shall pay
the Indebtedness
to SBA by June 30, 2005 (the "final maturity date"). The parties
acknowledge and
agree that the foregoing Indebtedness is being reviewed by SBA
in order to
satisfy the parties that all interest has been applied properly
in conformity
with SBA guidelines. SBA will determine the correct amount of
the Indebtedness
and the parties will agree on that final amount within thirty
days.
2. If any one or more of the following events listed below
("events
of default") shall occur and remain uncured for a period of
fifteen (15) days
after the date of the letter from SBA to Winfield stating the
event of default,
the entire unpaid balance of the principal and interest of the
outstanding
indebtedness shall become immediately due and payable and
without the necessity
of any demand, presentment, protest or notice upon Winfield, all
of which are
expressly waived by Winfield. In addition, SBA may file and
enforce the Consent
to Receivership, which is to be executed by Winfield
simultaneously with the
execution of this Agreement, and apply to the U.S. District
Court for the
appointment of SBA as Receiver and for a money judgment.
(a) Failure by Winfield to make payment of the Indebtedness
pursuant to the terms of this Agreement;
(b) Any violation of SBA's Act or Regulations by Winfield
that SBA is not currently aware of;
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EXHIBIT 10.1
(c) Material Adverse Change in the financial condition of
Winfield's operations including but not limited to, any
material reduction, other than the disposition of assets
(even below their carrying value) to repay SBA
indebtedness, in the value of Winfield's remaining
assets or any act of Winfield which in the reasonable
opinion of SBA imperils the prospect of full performance
or satisfaction of Winfield's obligations herein. For
purposes of this subsection, a material adverse change
shall mean a 50% decline
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