Exhibit 10.14
FORBEARANCE AGREEMENT
This Forbearance Agreement ("Agreement") is entered into
effective as of July 13, 2004, by and among
BANK ONE, N.A., ("Lender"),
CONTINENTAL CONVEYOR & EQUIPMENT
COMPANY, a Delaware Corporation ("Continental")
and GOODMAN CONVEYOR COMPANY, a Delaware
corporation ("Goodman") (Continental
and Goodman are collectively referred to
the "Borrowers" and each individually
as a "Borrower").
R E C I T A L S:
A. Pursuant to the terms of that certain Assumption and Modification
Agreement by and
between Borrower and
Bank dated as of March 7, 1997
("Assumption"), the
Borrowers assumed all of the Obligations of
CONTINENTAL
CONVEYOR &
EQUIPMENT CO. L.P., formerly a limited
partnership organized
and existing under the laws of the State of
Delaware, and
GOODMAN CONVEYOR CO. L.P., formerly a limited
partnership organized
and existing under the laws of the State of
Delaware
(collectively, the
"Borrowers")
under that certain
Credit
Facility and Security
Agreement by and among the Borrowers and Bank
(and/or its
predecessor
Bank One Cleveland, N.A.) dated as of
September 14, 1992; as amended by a certain First Amendment to Credit
Facility and Security
Agreement by and among the Borrowers and Bank
executed
on August 27, 1993; as
further amended by a
certain Second
Amendatory Agreement
by and among the
Borrowers and Bank dated as of
October 5,
1994; as further amended by a certain Consolidated
Amendment No. 1 to Credit Facility and Security Agreement by and
among
the Borrowers and Bank
dated as of July 28, 1995; as further amended
by a certain
Consolidated
Amendment No. 2 to Credit Facility and
Security Agreement
by and among the
Borrowers and Bank dated as of
December 13, 1996; as further amended by a certain Third Amendatory
Agreement to Credit
Facility and Security
Agreement by and among the
Borrower and Bank dated as of March 28, 1997; as further
amended by a
certain Fourth Amendatory Agreement by and among the Borrower and
Bank
dated as of December,
1998; as further amended by a certain Fifth
Amendatory Agreement
by and among the
Borrower and Bank
dated as of
April 29, 1999;
as further amended by a certain Sixth Amendatory
Agreement by and among
the Borrower
and Bank dated as of March 28,
2000, as modified by a letter amendment dated as of March 25, 2002
(collectively, the
"Original Credit Agreement"); and as further
amended by a certain Amended and Restated Credit Facility and
Security
Agreement by and among the Borrower and Bank dated as of July 25,
2002
(the
"Restated Credit Agreement") as further amended by a certain
First Amendment to
Amended and Restated
Credit Facility and Security
Agreement dated as of
June 30, 2003;
and as further amended by a
certain Second
Amendment to Amended and Restated Credit Facility and
Security Agreement
dated as of August 12, 2003 (which, together with
the Original Credit
Agreement and the Restated Credit Agreement are
sometimes collectively
referred to herein as the "Credit Agreement").
Capitalized terms not otherwise defined herein shall have the
meanings
given to such
terms in the Credit Agreement.
B. The Borrowers' obligation to repay advances on
the Revolving Loan (as
defined in the Credit Agreement) is evidenced by a certain Amended
and
Restated Revolving
Note (Revolving Loan), as amended by a certain
Second Amended
and Restated Replacement Promissory Note, and as
further amended
by the Third Amended and Restated Replacement
Promissory Note
(the "Restated Revolving Note"). The Borrower's
obligations to
repay the Term Loan A (as defined in the Credit
Agreement) is evidenced by a certain Amended and Restated Promissory
Note (Term
Loan A) (the "Restated Term Note"). To secure the
Obligations, including
advances under the Restated Revolving Note and
the Restated Term
Note, the Borrowers granted to Lender a security
interest in substantially all of their assets.
C. The Borrowers acknowledge that they are currently in default of
certain of the terms of the Credit Agreement, and by reason thereof,
Lender has no obligation to make additional advances under any of the
Credit Documents.
D. Under the terms of the
Credit Documents,
Lender is currently entitled
to exercise any right,
power or remedy
permitted to Lender by law or
any provision of the Credit Documents to effectuate
repayment of all
amounts owing to Lender under the Credit Documents, including,
without
limitation, the
repossession
and/or foreclosure and sale of the
Collateral. The
parties agree that, as of May 27, 2004, there is due
and owing from
Borrowers to Lender
$11,417,318
as the outstanding
principal amount
of the Revolving Loan, and $1,258,854 as the
outstanding principal
balance of the Term Loan A, together with
accrued but unpaid interest thereon and certain costs and
expenses.
E. The Borrowers have
requested that Lender
forbear from
exercising its
rights and remedies under the Credit Documents.
F. Lender is willing to forbear
in the exercise of its remedies under the
Credit Documents upon the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the mutual promises and
covenants contained herein, the foregoing
recitals (which are incorporated
herein by reference), and for other good
and valuable consideration, the receipt
and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. Forbearance. During the Forbearance Period (as defined
below), Lender will not make demand for payment under the
Restated
Revolving Note and/or Restated Term Note, or exercise any of its
rights
or remedies under the Credit Documents with respect to the
Designated
Defaults (as defined below). For purposes of this Agreement,
"Forbearance Period" means the period commencing on the date hereof
and
ending on the earlier of: (a) July 30, 2004; (b) the occurrence of
a
Default hereunder; (c) the termination of the forbearance
period
pursuant to that certain Forbearance Agreement by and among
Continental
Global Group, Inc. ("Continental Global"), N.E.S. Investment Co.,
and
CFSC Wayland Advisors, Inc., dated as of April 26, 2004 (the
"Global
Forbearance Agreement"); and/or (d) either the Trustee under,
or
holders of 25% or more of the Series A and Series B Notes issued
by
Continental Global and administered by Norwest Bank Minnesota,
Trustee
under, that certain Indenture, dated as of April 1, 1997 (the
"Indenture"), have declared the Series A and Series B Notes and/or
any
Liquidated Damages (as
defined in the Indenture) to be due and payable;
provided, however, that Lender's present willingness to so forbear
and
to forgo the exercise of any of Lender's rights, remedies,
powers
and/or privileges under the Credit Documents shall only be
construed as
a limited, one-time forbearance. The Borrowers acknowledge and
agree
that, notwithstanding the foregoing: (i) except as set forth
herein,
Lender reserves the right to enforce each and every term of the
Credit
Documents; (ii) Lender is under no duty or obligation of any kind
or
any nature to grant the Borrowers any additional period of
forbearance
beyond the Forbearance Period; (iii) Lender's actions in entering
into
this Agreement shall not be construed as a waiver or relinquishment
of,
or estoppel to assert, any of Lender's rights or remedies under any
of
the Credit Documents, applicable law or in equity; and (iv)
Lender's
actions in entering into this Agreement are without prejudice
to
Lender's right to pursue any and all remedies under the Credit
Documents, pursuant to applicable law, or in equity available to it
in
the sole discretion upon the termination (whether upon
expiration
thereof, upon acceleration, or otherwise) of the Forbearance
Period.
2. Effect and Construction of Agreement. Except as expressly
provided in this Agreement, the Credit Documents shall remain in
full
force and effect in accordance with their respective terms and
be
unaffected hereby. To the extent of any inconsistency, amendment
or
superseding provisions, this Agreement shall govern and control.
Except
as expressly provided in this Agreement, the Borrowers
expressly
acknowledge that nothing in this Agreement shall be deemed to
constitute in any way a waiver, extinguishment, satisfaction,
or
novation of the Obligations and/or Borrowers' existing indebtedness
to
Lender. The Borrowers acknowledge that they have consulted with
counsel
and with such other advisors as they have deemed necessary in
connection with the negotiation, execution and delivery of this
Agreement. This Agreement shall be construed without regard to
any
presumption or rule requiring that it be construed against the
party
causing this Agreement or any part hereof to be drafted.
3. The Loans. Lender hereby agrees that during the Forbearance
Period, Lender will continue to make advances under the Revolving
Loan
to or for the benefit of the Borrowers, which Revolving Loan shall
not
exceed the amount provided in Section 2.4 of the Credit Agreement,
as
amended. During the Forbearance Period interest shall not accrue on
the
Revolving Loan or the Term Loan A at the Default Rate.
4. Grant and Confirmation of Security Interests and Liens by
the Borrowers. The Borrowers hereby confirm their prior grant of
a
security interest to Lender, and to the extent necessary, hereby
grant
a new security interest to Lender, in all of their respective
Collateral. The Borrowers acknowledge and agree that the
security
interests and liens previously and hereby granted to Lender in
the
Collateral: (a) secure all amounts now or hereafter owing to Lender
by
the Borrowers, including, without limitation, all loans and
other
advances under the Credit Documents; (b) remain valid, first and
best
liens therein, subject only to the permitted encumbrances specified
in
the Credit Agreement; and (c) are not impaired by the execution
and
performance of this Agreement. The Borrowers further represent
and
warrant that as of the date hereof, there are no claims, set offs
or
defenses to the Obligations or to Lender's exercise of any rights
or
remedies available to it as a creditor in realizing upon the
Collateral. The Credit Documents and the liens and security
interests
granted thereby and hereby, shall remain in full force and effect
after
the consummation of the transactions contemplated herein.
5. Representations and Warranties. To induce Lender to enter
into this Agreement, each Borrower, jointly and severally,
represents
and warrants to Lender as follows:
(a) As of the date of this Agreement, the Borrowers are in
default under certain provisions of the Credit Documents,
including,
without limitation, the following provisions of the Credit
Agreement,
and as a result of such defaults, Lender is entitled to exercise
its
rights and remedies as provided by law and in the Credit Documents:
(i)
Sections 8.1(O),(Q) of the Credit Agreement; (ii) Section 8.2(U) of
the
Credit Agreement, and (iii) Section 11.1(D) as it pertains to
the
Borrowers' Guaranty of payments due by Continental Global to its
note
or bond holders, which are hereafter referred to as the
"Designated
Defaults."
(b) Before execution and delivery of this Agreement by all
parties, Lender had no obligation to modify, extend or otherwise
amend
the terms and conditions of any of the Credit Documents. The
Borrowers
agree that Lender's execution of this Agreement does not create
any
such obligations
other than as expressly set forth herein.
(c) Each Borrower has full corporate power and authority to
execute, deliver, and perform its obligations under this Agreement
and
has taken all corporate action required by law, its Articles or
Certificate of Incorporation, and its By-laws or Code of
Regulations to
authorize the execution, delivery and performance of this
Agreement.
This Agreement is the valid binding agreement of each Borrower
enforceable against each Borrower in accordance with their
respective
terms.
(d) No consent or approval of any party is required in
connection with the execution and delivery of this Agreement by
the
Borrowers, and the execution and delivery of this Agreement does
not:
(i) contravene or result in a breach or default under any of
the
Borrowers' respective Articles or Certificates of
Incorporation,
By-laws or Code of Regulations, or any other agreement or
instrument to
which any Borrower is a party or by which any of their
respective
properties are bound, (ii) violate any law, rule, regulation,
order,
writ, judgment, injunction, decree, determination or award
applicable
to any Borrower, or (iii) result in the creation or imposition of
any
lien, security interest or encumbrance on any property of any
Borrower,
whether now
