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Forbearance Agreement

Category: 270 Legal Recent Posts, Forbearance, Lending


FORBEARANCE AGREEMENT

THIS FORBEARANCE AGREEMENT (this “Agreement”), dated as of September 22, 2006, is entered into by and among the Lenders signatory hereto, ABLECO FINANCE LLC, a Delaware limited liability company, as collateral agent and administrative agent for the Lenders (in such capacities, “Agent”), MAGNETEK, INC., a Delaware corporation (“Borrower”), and each of Borrower’s Subsidiaries identified on the signature pages hereof (such Subsidiaries, together with Borrower, are referred to hereinafter as a “Loan Party” and individually and collectively, jointly and severally, as the “Loan Parties”). Terms used herein without definition shall have the meanings ascribed to them in the Financing Agreement defined below.

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3. Agreement to Forbear. For the Forbearance Period (as defined below), the Agent and Lenders shall not take any action or commence any proceedings with respect to the enforcement of any of their rights or remedies under the Loan Documents as a result of the Known Existing Defaults. The parties agree that neither the foregoing agreement by Agent and Lenders nor the acceptance by Agent or Lenders of any of the payments provided for in the Loan Documents, nor any payment prior to the date hereof shall, however, (a) excuse any party from any of its obligations under the Loan Documents (other than as set forth in Section 5 below), or (b) toll the running of any time periods applicable to any such rights and remedies, including, without limitation, any grace periods with respect to Defaults under the Loan Documents or otherwise. Each Loan Party agrees that it will not assert laches, waiver or any other defense to the enforcement of any of the Loan Documents based upon the foregoing agreement Agent and Lenders to forbear or the acceptance by Agent or Lenders of any of the payments provided for in the Loan Documents or any payment prior to the date hereof. As used herein, “Forbearance Period” shall mean the period commencing upon the effectiveness of this Agreement and continuing until the earlier to occur of: (x) any Default or Event of Default under any of the Loan Documents (other than any Known Existing Default) or (y) October 31, 2006.
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