Common use of Forbearance Conditions Clause in Contracts

Forbearance Conditions. IBM Credit is willing to forbear, subject to the terms of this Forbearance Agreement, from exercising its remedies as a result of the Existing Events of Default for the period from the date hereof until August 31, 2005 ("Termination Date"), provided that each and all of the following conditions (the "Forbearance Conditions") are satisfied at all times to the satisfaction of IBM Credit in its sole discretion: (A) Customer shall provide to IBM Credit with the following; (i) on or before November 30, 2004, both audited financial statements for the fiscal year ending April 30, 2004 and all Securities and Exchange Commission ("SEC") forms 10Q and 10K through July 31,2004; (ii) thereafter, for each fiscal month end beginning July 2004, by the end of the following month, actual balance sheet, profit and loss and cash flow numbers in the exact same form as that presented to Customer's Board of Directors on June 25, 2004, in each case compared with the forecasted numbers and (iii) on or before August 1, 2005 fully audited financial statements for the fiscal years ending April 30, 2003, April 30, 2004 and April 30, 2005. (B) On or before July 31, 2004 Customer shall provide IBM credit with warrants to purchase one million shares of customer's common stock, with a strike price of $0.42 per share. (C) On or before July 14, 2004, IBM Credit shall have received a copy of this Forbearance Agreement fully executed by all parties hereto including execution by each of the Guarantors; (D) No Guarantor shall revoke or terminate, or attempt to revoke or terminate, its Guaranty; (E) No representation or warranty made by the Customer or any Guarantor in this Forbearance Agreement, the Financing Agreement or any Guaranty shall prove to have been in error, or untrue; (F) No additional Default or Event of Default shall occur, other than the Existing Events of Default set forth in Section 2 of this Forbearance Agreement; (G) There shall occur no further deterioration of Customer's or any Guarantors' financial position, insolvency or any other event that could reasonably by expected to have a material adverse effect, (i) on the business, operations, results of operations, assets or financial condition of the Customer or any Guarantor, (ii) on the aggregate value of the collateral granted to IBM Credit in connection with the Financing Agreement or any Other Documents ("Collateral") or the aggregate amount which IBM Credit would be likely to receive (after giving consideration to reasonably likely delays in payment and reasonable costs of enforcement) in the liquidation of such Collateral to recover the Obligations in full, or (iii) on the rights and remedies of IBM Credit under this Forbearance Agreement, the Financing Agreement or any Guaranty; and (H) Customer shall not assign any of its rights, title and interest in and to the Collateral, to any other party.

Forbearance Conditions. IBM Credit is willing to forbear, subject to the terms of this Forbearance Agreement, from exercising its remedies as a result of the Existing Events of Default for the period from the date hereof until August July 31, 2005 2004 ("Termination Date"), provided that each and all of the following conditions (the "Forbearance Conditions") are satisfied at all times to the satisfaction of IBM Credit in its sole discretion: (A) Customer shall provide to IBM Credit with the following; (i) on or before November 30, 2004, both audited financial statements for the fiscal year ending April 30, 2004 10Q's as of 10/31/03 and all Securities and Exchange Commission ("SEC") forms 10Q and 10K through July 31,20041/31/04 by 5/15/04; (ii) thereafterby 6/15/04, a projection, by month, for the year ending 4/30/05; each fiscal month end beginning July 2004, by the end of the following month, actual therein shall include a balance sheet, profit and loss statement and a statement of cash flow numbers flows, in the exact same form detail as that presented to Customer's Board of Directors on June 25, 2004, in each case compared with the forecasted numbers and (iii) on or before August 1, 2005 fully audited is provided for quarterly financial statements for the fiscal years ending April 30, 2003, April 30, 2004 and April 30, 2005.statements (B) On or before July 31, 2004 Customer shall provide IBM credit with warrants to purchase one million shares of customer's common stock, with a strike price of $0.42 per share. (C) On or before July 14, 2004, IBM Credit shall have received a copy of this Forbearance Agreement fully executed by all parties hereto copy (including execution by each of the Guarantors) of this Forbearance Agreement on or before March 31, 2004; (DC) No Guarantor shall revoke or terminate, or attempt to revoke or terminate, its Guaranty; (ED) No representation or warranty made by the Customer or any Guarantor in this Forbearance Agreement, the Financing Agreement or any Guaranty shall prove to have been in error, or untrue; (FE) No additional Default or Event of Default shall occur, other than the Existing Events of Default set forth in Section 2 of this Forbearance Agreement; (GF) There shall occur no further deterioration of Customer's or any Guarantors' financial position, insolvency or any other event that could reasonably by expected to have a material adverse effect, (i) on the business, operations, results of operations, assets or financial condition of the Customer or any Guarantor, (ii) on the aggregate value of the collateral granted to IBM Credit in connection with the Financing Agreement or any Other Documents ("Collateral") or the aggregate amount which IBM Credit would be likely to receive (after giving consideration to reasonably likely delays in payment and reasonable costs of enforcement) in the liquidation of such Collateral to recover the Obligations in full, or (iii) on the rights and remedies of IBM Credit under this Forbearance Agreement, the Financing Agreement or any Guaranty; and (HG) Customer shall not assign any of its rights, title and interest in and to the Collateral, to any other party.

Forbearance Conditions. IBM Credit is willing to forbear, subject to the terms of this Forbearance Agreement, from exercising its remedies as a result of the Existing Events of Default Defaults for the period from the date hereof until August 31October 15, 2005 2008 ("Termination Date"), provided that each and all of the following conditions (the "Forbearance Conditions") are satisfied at all times to the satisfaction of IBM Credit in its sole discretion: (A) Customer shall provide Effective immediately, the Credit Line is reduced to IBM Nine Hundred Fifty Thousand Dollars ($950,000.00), and the Credit with the following; (i) Line will terminate on or before November 30October 15, 2004, both audited financial statements for the fiscal year ending April 30, 2004 and all Securities and Exchange Commission ("SEC") forms 10Q and 10K through July 31,2004; (ii) thereafter, for each fiscal month end beginning July 2004, by the end of the following month, actual balance sheet, profit and loss and cash flow numbers in the exact same form as that presented to Customer's Board of Directors on June 25, 2004, in each case compared with the forecasted numbers and (iii) on or before August 1, 2005 fully audited financial statements for the fiscal years ending April 30, 2003, April 30, 2004 and April 30, 20052008. (B) On or before July 31, 2004 The Customer shall provide duly and punctually observe, perform and discharge each and every obligation and covenant to be performed under this Forbearance Agreement, the Financing Agreement, and any other agreement between IBM credit with warrants to purchase one million shares of customer's common stock, with a strike price of $0.42 per share.Credit and the Customer; (C) On or before July 14Customer shall, 2004at all times, maintain a minimum credit line availability of at least $65,000 computed on the same basis as are currently reported on Collateral Management Reports (CMR) being submitted by Customer to IBM Credit shall have received a copy of this Forbearance Agreement fully executed by all parties hereto including execution by each of the GuarantorsCredit; (D) No Guarantor shall revoke or terminateCustomer will submit CMR reports with all backups weekly with the first CMR being computed based on data as of the close of business on August 28, or attempt to revoke or terminate, its Guaranty;2008 and will provide a complete copy of each of the CMR reports no later than noon the following business day. (E) Customer will immediately deposit all payments received from Patriot in the lockbox under the control of IBM Credit. (F) On or before September 5, 2008, Customer shall execute and deliver to IBM Credit the form of Voluntary Surrender Acknowledgement in the form attached hereto. On or before the close of business on Friday, September 5, 2008, all inventory of Customer shall be removed from its premises and delivered to Xxxxxxx United Van Line for storage except such items of inventory which are to be returned for credit on a basis approved by IBM Credit. Items in storage with Xxxxxxx United Van Lines may be released for shipment to the customers of Customer upon such terms and conditions as may be approved by IBM Credit in its own discretion. In lieu of the removal of the inventory, Customer may establish an irrevocable letter of credit with a financial institution acceptable to IBM Credit in an amount not less than the amount of inventory included in the CMR computation. (G) Customer shall provide such detail as IBM Credit may request concerning the reasons for amounts to be included in working capital advances, including names, dates of work and other information for employees and others to be included in advances to cover payroll, details of monthly rent payments, and other detail for items to be funded from such advances. (H) Customer will be available during regular business hours to provide such financial and business information to IBM Credit and discuss developments affecting the financial accommodations provided by IBM Credit as IBM Credit may request. In particular, Customer shall provide current information and documentation related to all financing, buyout, equity infusions and other similar matters as may come into the possession of Customer. (I) The financial accommodations provided to Customer by IBM Credit under the Financing Agreement as modified by this Forbearance Agreement will cease and terminate on October 15, 2008 unless earlier terminated under the Financing Agreements as modified by this Forbearance Agreement. At the time of the termination, Customer shall pay all obligations then due IBM Credit. (J) No representation or warranty made by the Customer or any Guarantor in this Forbearance Agreement or the Financing Agreement, the Financing Agreement or any Guaranty shall prove to have been in error, or untrue; (FK) No additional Default Defaults or Event of Default Defaults shall occur, other than the Existing Events existing events of Default set forth referred to in Section 2 of this Forbearance Agreement; (GL) There shall occur no further deterioration of Customer's or any Guarantors' financial position, insolvency or any other event that could reasonably by be expected to have a material adverse effect, (i) on the business, operations, results of operations, assets or financial condition of the Customer or any GuarantorCustomer, (ii) on the aggregate value of the collateral granted to IBM Credit in connection with the Financing Agreement or any Other Documents ("Collateral") or the aggregate amount which IBM Credit would be likely to receive (after giving consideration to reasonably likely delays in payment and reasonable costs of enforcement) in the liquidation of such Collateral to recover the Obligations in full, or (iii) on the rights and remedies of IBM Credit under this Forbearance Agreement, the Financing Agreement or any Guaranty; andAgreement; (HM) Customer shall not assign any of its rights, title and interest in and to the Collateral, to any other party; and (N) By no later than September 8, 2008, Customer shall provide detail as to application of the One-Hundred and Forty Seven Thousand Dollar ($147,000.00) payment transaction. The failure to comply with the foregoing covenants within the time frames set forth above shall constitute an immediate Event of Default under the Financing Agreement and a default hereunder.

Forbearance Conditions. IBM Credit is willing to forbear, subject to the terms of this Forbearance Agreement, from exercising its remedies as a result of the Existing Events of Default for the period from the date hereof until August 31April 30, 2005 2004 ("Termination Date"), provided that each and all of the following conditions (the "Forbearance Conditions") are satisfied at all times to the satisfaction of IBM Credit in its sole discretion: (A) Customer shall provide to IBM Credit with the following; (i) on or before November 30, 2004, both audited financial statements for the fiscal year ending April 30, 2004 10Q's as of 10/31/03 and all Securities and Exchange Commission ("SEC") forms 10Q and 10K through July 31,20041/31/04 by 3/31/04; (ii) thereafteractual cash flow numbers, in the same format as the cash flow forecasts previously provided by the Customer, for each fiscal the months ended 1/31 and 2/29/04 by 3/15/04 and for the month end beginning July 2004ending 3/31/04 by 4/15/04; and (iii) by 4/15/04, a projection, by the end of the following month, actual for the year ending 4/30/05; each month therein shall include a balance sheet, profit and loss statement and a statement of cash flow numbers flows, in the exact same form detail as that presented to Customer's Board of Directors on June 25, 2004, in each case compared with the forecasted numbers and (iii) on or before August 1, 2005 fully audited is provided for quarterly financial statements for the fiscal years ending April 30, 2003, April 30, 2004 and April 30, 2005statements. (B) On or before July 31, 2004 Customer shall provide IBM credit with warrants to purchase one million shares of customer's common stock, with a strike price of $0.42 per share. (C) On or before July 14, 2004, IBM Credit shall have received a copy of this Forbearance Agreement fully executed by all parties hereto copy (including execution by each of the Guarantors) of this Forbearance Agreement on or before March 27, 2004; (DC) No Guarantor shall revoke or terminate, or attempt to revoke or terminate, its Guaranty; (ED) No representation or warranty made by the Customer or any Guarantor in this Forbearance Agreement, the Financing Agreement or any Guaranty shall prove to have been in error, or untrue; (FE) No additional Default or Event of Default shall occur, other than the Existing Events of Default set forth in Section 2 of this Forbearance Agreement; (GF) There shall occur no further deterioration of Customer's or any Guarantors' financial position, insolvency or any other event that could reasonably by expected to have a material adverse effect, (i) on the business, operations, results of operations, assets or financial condition of the Customer or any Guarantor, (ii) on the aggregate value of the collateral granted to IBM Credit in connection with the Financing Agreement or any Other Documents ("Collateral") or the aggregate amount which IBM Credit would be likely to receive (after giving consideration to reasonably likely delays in payment and reasonable costs of enforcement) in the liquidation of such Collateral to recover the Obligations in full, or (iii) on the rights and remedies of IBM Credit under this Forbearance Agreement, the Financing Agreement or any Guaranty; and (HG) Customer shall not assign any of its rights, title and interest in and to the Collateral, to any other party.