Loan
Documents and applicable law.
3.
OTHER AGREEMENTS.
EACH OF THE PARTIES
HEREBY AGREE THAT:
(A)
THE BORROWERS SHALL DELIVER TO THE AGENT ON
THE FIRST BUSINESS DAY FOLLOWING THE FIFTEENTH (15TH) DAY OF EACH MONTH, A
CERTIFICATE REFLECTING THE CALCULATION OF THE BORROWERS' BORROWING BASE, WHICH
SHALL BE CALCULATED WITH RESPECT TO ELIGIBLE RECEIVABLES, AS OF THE FIFTEENTH
(15TH) DAY OF SUCH MONTH, AND WHICH SHALL BE CALCULATED WITH RESPECT TO ELIGIBLE
INVENTORY, AS OF THE FIFTEENTH (15TH) DAY OF SUCH MONTH, AND TO BE IN SUCH FORM
SATISFACTORY TO THE AGENT (THE "INTERIM BORROWING BASE CERTIFICATE").
THE
INTERIM BORROWING BASE CERTIFICATE SHALL BE IN ADDITION TO, AND NOT IN LIEU OF,
THE MONTHLY BORROWING BASE CERTIFICATE REQUIRED TO BE DELIVERED TO THE AGENT BY
THE BORROWERS PURSUANT TO SECTION 5.2(A) OF THE CREDIT AGREEMENT.
(B)
COMMENCING ON THE EFFECTIVE DATE (AS DEFINED
BELOW) AND THROUGHOUT THE FORBEARANCE PERIOD, ALL ADVANCES SHALL BEAR INTEREST
AS PROVIDED IN SECTION 1(C) HEREOF ON THE PRINCIPAL AMOUNTS DUE AS SET FORTH IN
SECTION 3(C).
(C)
AS OF NOVEMBER 29, 2005, THE OUTSTANDING
PRINCIPAL BALANCE DUE UNDER THE CREDIT AGREEMENT IS $27,736,367.92,
THE
PRE-PAYMENT PENALTY IS $1,200,000 (THE "PRE-PAYMENT FEE") AND ACCRUED AND UNPAID
INTEREST IS $181,063.12 ALL OF WHICH, BUT FOR THIS FORBEARANCE AGREEMENT, ARE
NOW DUE AND PAYABLE.
LENDERS SHALL WAIVE THE PRE-PAYMENT FEE ON THE SAME TERMS
AND CONDITIONS THAT IT HAS AGREED TO WAIVE THE PIK SPREAD AS PROVIDED IN
SECTION 1(C).
(D)
COMMENCING ON THE EFFECTIVE DATE AND
CONTINUING THROUGHOUT THE FORBEARANCE PERIOD, THE BORROWERS SHALL COMPLY WITH
THE FINANCIAL COVENANTS SET FORTH IN THE CREDIT AGREEMENT AS MAY BE MODIFIED BY
THE WAIVER AGREEMENT, AUGUST WAIVER AND SUCH OTHER AGREEMENTS ENTERED INTO
BETWEEN BORROWERS AND LENDERS, PROVIDED, HOWEVER, THAT LENDERS HEREBY WAIVE THE
WAIVER FEE DUE UNDER, AND DEFINED IN, SECTION 5.1(B)(II) OF THE AUGUST WAIVER.
(E)
THE BORROWERS WILL DELIVER TO THE AGENT, ON
OR BEFORE DECEMBER 8, 2005, CASH FLOW PROJECTIONS IN CONNECTION WITH THE
CONTEMPLATED CHAPTER 11 CASE OF THE BORROWERS WHICH WILL REFLECT, AMONG OTHER
THINGS, COMPLIANCE WITH CASH RESERVE NEEDS TO SATISFY RECLAMATION AND UNSECURED
CREDITOR CLAIMS PURSUANT TO BANKRUPTCY CODE SECTIONS 546(C) AND 503(B)(9).
4.
ADVANCES.
DURING THE FORBEARANCE
PERIOD, EACH OF THE PARTIES HEREBY AGREE THAT PROVIDED THAT NO DEFAULT OR EVENT
OF DEFAULT (OTHER THAN THE EXISTING DEFAULTS) SHALL HAVE OCCURRED AND BE
CONTINUING THE AGENT AND THE LENDERS SHALL CONTINUE TO MAKE REVOLVING ADVANCES
TO THE BORROWERS AS PROVIDED BY SECTION 2.1 OF THE CREDIT AGREEMENT.
5.
BLOCKED ACCOUNTS; DEPOSITORY ACCOUNTS.
(A)
IN ACCORDANCE WITH THE TERMS OF THE CREDIT
AGREEMENT, CERTAIN BLOCKED ACCOUNTS AND/OR DEPOSITORY ACCOUNTS HAVE BEEN
ESTABLISHED BY THE BORROWERS IN WHICH THE PROCEEDS OF THE COLLATERAL ARE
DEPOSITED BY THE BORROWERS AND EACH OF ITS SUBSIDIARIES.
EACH
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BLOCKED ACCOUNT AND/OR DEPOSITORY ACCOUNT SHALL BE AND REMAIN UNDER THE SOLE
DOMINION AND CONTROL OF THE AGENT.
(B)
THE BORROWERS AND GUARANTOR ACKNOWLEDGE AND
AGREE THAT THEY HAVE NO RIGHT OF WITHDRAWAL FROM THE