FORBEARANCE AGREEMENT

 

 

                                  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