EX-10.71 2 f8kx1017.txt BRIDGE FORBEARANCE EXTENSION AGREEMENT Exhibit 10.71 CONSOLIDATED ENERGY, INC. October 6, 2005 ADDITIONAL FINANCING FORBEARANCE AGREEMENT Gentlemen: Reference is made to that certain Securities Purchase Agreement dated as of February 22, 2005 among Consolidated Energy, Inc., a Wyoming corporation (the "Company") and the Purchasers (the "Purchasers") named therein, as amended through the date hereof (the "Purchase Agreement"), the 6% Senior Secured Convertible Notes Due 2008 of Consolidated Energy, Inc. in favor of the holders thereof (the "Senior Notes"), and the other Transaction Documents. Capitalized terms, unless otherwise herein defined, shall have the meanings assigned to them in the Purchase Agreement. Cordillera Fund L.P. (the "Bridge Lender") has previously extended credit to the Company pursuant to a Promissory Note dated September 23, 2005 (the "Bridge Note"). In order to induce the Bridge Lender to make such extension of credit to the Company, the Bridge Lender required the Purchasers to forbear, for period of ten (10) business days from the date of the Bridge Note, from exercising their rights or remedies under the Transaction Documents, pursuant to that certain Bridge Forbearance letter agreement dated September 23, 2005 (the "Bridge Forbearance") as executed by the Company and the Purchasers. The Bridge Lender is now requesting that the Purchasers extend the period of forbearance from exercising their rights or remedies under the Transaction Documents pursuant to the terms of this Additional Financing Forbearance Agreement (which supersedes and replaces the Bridge Forbearance). Each of the undersigned hereby agrees to continue to forebear from exercising any of its rights or remedies under the Purchase Agreement, its Senior Note, the Security Agreement, or any other Transaction Documents until the earliest to occur of the following: (i) November 18, 2005, (ii) the expiration and termination of the Bridge Note, or (iii) the completion by the Company of a new financing (whether by debt, stock or otherwise) (as the case may be, the "Forbearance Period"). Each of the undersigned understands that the Bridge Lender continues to rely on this Additional Financing Forbearance Agreement with respect to the transactions contemplated by the Bridge Note and would not have entered into the transactions contemplated by the Bridge Note but for the forbearance granted under the Bridge Forbearance and hereunder. This Additional Financing Forbearance Agreement shall not constitute a waiver of any kind by any Purchaser of any of its rights or remedies under any of the Transaction Documents, nor be construed as an agreement by any Purchaser to forebear from exercising any of its rights or remedies under the Transaction Documents after the expiration of the Forbearance Period. To the extent this Additional Financing Forbearance Agreement constitutes an amendment of the Transaction Documents, the parties by their signature hereon consent and agree to such amendment of the Transaction Documents. This Additional Financing Forbearance Agreement may be executed in a number of counterparts, all of which taken together shall constitute one and the same instrument. This Additional Financing Forbearance Agreement shall be governed by the laws of the State of Texas without regard to conflict of laws principles. Please indicate your approval of the terms and provisions hereof by executing this consent Additional Financing Forbearance Agreement in the space provided below. CONSOLIDATED ENERGY, INC. By:/s/David Guthrie Name: David Guthrie Title: President Agreed and accepted by the following persons that have executed the attached signature pages: IN WITNESS WHEREOF, the parties hereto have caused this Additional Financing Forbearance Agreement to be duly executed by their respective authorized officers as of the date first above written. CONSOLIDATED ENERGY, INC. By:/s/David Guthrie Name: David Guthrie Title: President PURCHASERS: GRYPHON MASTER FUND, L.P. By: Gryphon Partners, L.P., its General Partner By: Gryphon Management Partners, L.P., its General Partner By: Gryphon Advisors, L.L.C., its General Partner By: /s/E.B. Lyon, IV E.B. Lyon, IV, Authorized Agent GSSF MASTER FUND, LP By: Gryphon Special Situations Fund, LP, its General Partner By: GSSF Management Partners, LP, its General Partner By: GSSF, LLC, its General Partner By: /s/E.B. Lyon, IV E.B. Lyon, IV, Authorized Agent LONESTAR PARTNERS, L.P. By: Lonestar Capital Management, LLC, its General Partner By: /s/Jerome Simon Jerome Simon, Manager WS OPPORTUNITY INTERNATIONAL FUND, LTD. By: WS Ventures Management, L.P., as agent and attorney-in-fact By: WSV Management, LLC, its General Partner By: /s/Patrick P. Walker Patrick P. Walker, Member WS OPPORTUNITY FUND (QP), L.P. By: WS Ventures Management, L.P., its General Partner By: WSV Management, LLC, its General Partner By: /s/Patrick P. Walker Patrick P. Walker, Member WS OPPORTUNITY FUND, L.P. By: WS Ventures Management, L.P., its General Partner By: WSV Management, LLC, its General Partner By: /s/Patrick P. Walker Patrick P. Walker, Member RENAISSANCE US GROWTH INVESTMENT TRUST PLC By: /s/Russell Cleveland Russell Cleveland, Director BFS US SPECIAL OPPORTUNITIES TRUST PLC By: /s/Russell Cleveland Russell Cleveland, Director ENABLE GROWTH PARTNERS, L.P. By: Enable Capital Management, its General Partner By: /s/Brendan O'Neil Brendan O'Neil, Principal ENABLE OPPORTUNITY PARTNERS, L.P. By: Enable Capital Management, its General Partner By: /s/Brendan O'Neil Brendan O'Neil, Principal GAMMA OPPORTUNITY CAPITAL PARTNERS, L.P. By: Gamma Capital Advisors, Ltd, its General Partner By: /s/Jonathan P. Knight Jonathan P. Knight, President/Director BUSHIDO CAPITAL MASTER FUND, L.P. By: Bushido Capital Partners, Ltd., its General Partner By: /s/ Christopher Rossman Christopher Rossman, Managing Director CORDILLERA FUND, L.P. By: ACCF GenPar, L.P., its General Partner By: Andrew Carter Capital, Inc. its General Partner By: /s/James P. Andrew James P. Andrew, Co-CEO of Andrew Carter Capital, Inc. NEWGRANGE PARTNERS, L.P. By: Newgrange Advisors, LLC, its General Partner By: /s/Michael Scholten Michael Scholten, Managing Partner