FORBEARANCE AGREEMENT

 

 

                                  Exhibit 10.6

 

 

                              FORBEARANCE AGREEMENT

 

 

 

                  This  Forbearance  Agreement  ("Agreement")  dated as of April

26, 2004 is made and entered into by and among Continental Global Group, Inc., a

Delaware  corporation (the "Company"),  N.E.S.  Investment Co. ("N.E.S.")

and CFSC Wayland Advisors, Inc. ("Wayland").

 

                                   BACKGROUND

 

A. Wayland is a holder of, or investment manager or advisor for certain

discretionary accounts that are holders or beneficial owners of, certain of the

Notes (as defined below).

 

B. The Company, Wayland and N.E.S. are in good faith negotiations regarding the

restructuring of the terms of the Notes (the "Potential Restructuring").

 

C. The Company and N.E.S. desire that Wayland forbear the exercise of any rights

and remedies under or with respect to the Notes owned or controlled by Wayland

while the parties are negotiating the restructuring of the terms of the Notes

and Wayland has agreed to such forbearance in accordance with the terms of this

Agreement.

 

                  NOW, THEREFORE, in consideration of the promises and mutual

agreements herein contained, the parties hereto, intending to be legally bound

hereby, hereby agree as follows:

 

1. Definitions. Capitalized terms used in this Agreement and not defined

elsewhere herein shall be defined as set forth below:

 

                  "Indenture" means the Indenture, dated as of April 1, 1997,

among the Company each Subsidiary Guarantor (as defined therein) and Norwest

Bank Minnesota, National Association, as trustee, relating to the Notes.

 

                  "Notes" means the Company's 11% Series A Senior Notes due 2007

and the Company's 11% Series B Senior Notes due 2007 issued pursuant to the

Indenture.

 

                  "Person" means any individual or any partnership, corporation,

joint venture, limited liability company or other unincorporated organization or

entity or any association, trust, or governmental unit.

 

                  "Transfer" means to directly or indirectly sell (through a

direct sale or otherwise), pledge, assign, encumber, grant a proxy, grant an

option with respect to, transfer or dispose of any participation or interest

(voting or otherwise) in or enter into an agreement, voting trust, commitment or

other arrangement to sell (through a direct sale or otherwise), pledge, assign,

encumber, grant a proxy, grant an option with respect to, transfer or dispose of

any participation or interest (voting or otherwise) in or the act thereof.

 

                  "Trustee" means the trustee under the Indenture.

 

                  "Wayland Notes" means Notes in the aggregate principal amount

set forth on Schedule I hereto.

 

2.                Forbearance and Agreement Not to Transfer.

 

     (a)          So long as this Agreement remains in effect, Wayland hereby

                  agrees (i) to forbear from enforcing any and all of its rights

                  and remedies with respect to all defaults under the Notes or

                  the Indenture existing as of the date hereof, (ii) not to

                  instruct or direct the Trustee to enforce any of the rights

                  and remedies accruing to it under the Indenture or the Trust

                  Indenture Act of 1939, as amended, with respect to any default

                  under the Notes or the Indenture existing as of the date

                  hereof and (iii) to give a copy of this Agreement to the

                  Trustee and to inform the Trustee that it is not authorized to

                  take any action on behalf of Wayland that is inconsistent with

                  Wayland's agreements and obligations under this Agreement.

                  Wayland expressly consents to the Company's right to confirm

                  such actions with the Trustee.

 

     (b)          Wayland agrees, so long as this Agreement remains in effect,

                  not to Transfer any Wayland Notes, in whole or in part, unless

                  the transferee of such Transfer shall agree to be and shall

                  become bound by the terms of this Agreement with respect to

                  any Wayland Notes so transferred. Any Transfer of the Wayland

                  Notes in violation of the foregoing restriction shall be

                  deemed null and void ab initio.

 

3.                Termination of Agreement. This Agreement shall terminate and

                  expire upon the earlier to occur of:

 

     (i)          mutual written consent of the Company, Wayland and N.E.S.;

 

     (ii)         5:00 P.M. New York City time on May 31, 2004; or

 

     (iii)        delivery of notice pursuant to paragraph 16 hereof.

 

4.                Representations and Warranties.

 

     (a)          Each of the signatories to this Agreement represents and

                  warrants to the other signatories to this Agreement that:

 

          (i)     it is duly organized, validly existing and in good standing

                  under the laws of the jurisdiction of its organization and has

                  all requisite corporate, partnership or other power and

                  authority to enter into this Agreement and to carry out the

                  transactions contemplated by, and perform its respective

                  obligations under, this Agreement;

 

          (ii)    the execution, delivery and performance by it of this

                  Agreement do not and shall not (A) violate any provision of

                  law, order, rule or regulation applicable to it or its

                  certificate of incorporation or bylaws or other organizational

                  documents or (B) conflict with, result in the breach of or

                  constitute (with due notice or lapse of time or both) a

                  default under any material contractual obligations to which it

                  is a party or under its certificate of incorporation, bylaws

                  or other governing instruments;

 

          (iii)   the execution, delivery and performance by it of this

                  Agreement do not and shall not require any registration or

                  filing with, the consent or approval of, notice to, or any

                  other action with respect to, any Federal, state or other

                  governmental authority or regulatory body;

 

          (iv)    assuming the due execution and delivery of this Agreement by

                  each of the other parties hereto, this Agreement is