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Forbearance Agreement

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Exhibit 10.30


FORBEARANCE AGREEMENT


This Forbearance Agreement ("Agreement") is entered into as of the 14th day of July, 2003, by and among Amerivision Communications, Inc., an Oklahoma corporation ("Borrower"); and Continental Business Credit ("Continental"); Textron Financial Corporation ("Textron"); Republic Financial Corporation, a Colorado corporation and LINC Credit, L.L.C. (hereafter Republic and LINC are collectively referred to as "LINC" or "Agent"), a Delaware limited liability company and successor-in-interest to Coast Business Credit ("Coast"), a division of Southern Pacific Bank ("SPB"), a California corporation (Continental, Textron, and LINC are, together, the "Lenders").


A. Borrower is indebted to Lenders, as evidenced by (i) that Loan and Security Agreement, and (ii) that Schedule to Loan and Security Agreement, both dated February 4, 1999, and as amended from time to time, executed by Borrower in favor of Coast and the various other parties thereto.


B. The loan documents described in the foregoing Recital, together with any documents executed pursuant thereto or hereto, are referred to collectively as the "Loan Documents" the credit facility and related obligation(s) described in the Loan Documents are referred to collectively as the "Loan".


C. The Federal Deposit Insurance Corporation was appointed receiver of SPB on or about February 7, 2003. On or about May 13, 2003, Coast's position in the Loan was sold to LINC.


D. The Loan matured by its terms on May 31, 2003 (the "Maturity Date"), and all outstanding principal and accrued and unpaid interest and expenses thereunder (the "Obligations") are currently due and payable in full. Under the terms of the Loan Documents, Lenders are presently entitled to exercise any or all of the rights and remedies provided in the Loan Documents, including without limitation, demanding payment of all Obligations, refusing to provide additional financial accommodations to the Borrower and/or enforcement of the Lenders' liens on and security interest in the Collateral.


E. Borrower has requested that Lenders conditionally and temporarily forbear in the exercise of remedies on certain terms and conditions. Borrower has brought a lawsuit against Lenders in the Oklahoma County District Court, case number CJ-2003-5886, State of Oklahoma, in which it seeks legal and equitable relief against the Lenders for various alleged unlawful and unauthorized acts against the Borrower and its interests and the interests of others, as outlined the Borrower's Verified Petition. Lenders, while denying the jurisdiction and venue of the Oklahoma County District Court, deny the allegations of the Borrower and deny that Borrower is entitled to the requested relief.


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NOW, THEREFORE, in consideration of the mutual agreements set forth herein, and for other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:


1. Definitions . Unless otherwise defined herein, capitalized terms used herein that are defined in the Loan Documents are used herein as therein defined.


"Affiliate" means, with respect to any Person, another Person who (i) owns an equity interest in the first Person, of any degree, (ii) is owned, as to equity interest, by the first Person, in any degree, (iii) Controls the first Person, (iv) is Controlled by the first Person, or (v) is Controlled by a Person who also Controls the first Person.


"Claims" means any and all accounts, covenants, agreements, obligations, claims, debts, liabilities, offsets, demands, costs, expenses, actions or causes of action of every nature, character and description, whether arising at law or equity or under statute, regulation or otherwise, and whether liquidated or unliquidated, contingent or noncontingent, known or unknown, suspected or unsuspected, including without limitation, the claims asserted by Borrower in the Lawsuit.


"Control" means the ability to substantially direct the policies of a Person, whether directly or indirectly, and whether such influence exists by right or by economic compulsion.


"Forbearance Period" means the period commencing on the date hereof and terminating on the earlier of (i) September 30, 2003, unless extended pursuant to the terms of paragraph 8 of this Agreement; or (ii) the occurrence of a Termination Event.


"Lawsuit" means the case filed by Borrower in the District Court of Oklahoma County, Oklahoma, styled Amerivision Communications, Inc. v. LINC Credit, L.L.C., et al., Case No. CJ-2003-5886.


"Lender Parties" means Lenders, their participants, predecessors, successors and assigns and their present and previous agents, attorneys, representatives, Affiliates, officers, directors, and each of them.


"Permitted Event of Default" means the present Event of Default arising under the Loan Documents from Borrower's failure to make payment when due under the Loan Documents.


"Person" means any natural person and any legal entity with the ability to enter into contracts.


"Termination Event" means the occurrence of any one or more of: (i) the breach of any warranty or representation made to Lenders under this Agreement, (ii) the failure of Borrower to comply strictly with all covenants and obligations under this Agreement, (iii) the existence of any Event of Default under the Loan Documents (other than the Permitted Event of Default), and (iv) Borrower's direct collection of or redirection of any payment due to Borrower by a third party (unless such payment is immediately delivered to Lenders and Borrower provides the third party


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immediate notice to forward all future payments to the Collection Account (as defined herein)); provided, however, Termination Event shall not include Borrower's default under Sections 10.1(r), (s), (t) or (u) of the Loan and Security Agreement dated February 4, 1999.


2. Borrower's Affirmation of Loan . Borrower acknowledges, warrants and represents that (i) pursuant to the Loan Documents, its obligations to repay the Loan are absolute and unconditional, and there exists no right of deduction, setoff, recoupment, counterclaim or defense of any nature whatsoever to payment of the Loan that has not been released herein, (ii) the Loan has matured and that Lenders have been under no obligation to fund advances under the Loan Documents since the Maturity Date, (iii) the Loan Documents are valid and enforceable against Borrower in accordance with their terms and grant Lenders valid and perfected security interests in the collateral described therein (the "Collateral"), with the priority required by the Loan Documents, and (iv) the amount outstanding under the Loan, including principal and interest but excluding expenses, as of July 7, 2003, totaled approximately $12,073,683.77. Without limiting the foregoing, Borrower specifically agrees that the Lockbox Agreement dated February 4, 1999, among Borrower, Coast and Bank of Oklahoma, N.A. remains in full force and effect, that Borrower will continue to immediately deposit all cash, checks, drafts or other orders for payment of money relating to or constituting payments made in respect of any and all Collateral in deposit account number 208319181 ("Deposit Account"), and that Borrower will instruct its customers to continue to send payments directly to the Deposit Account. Borrower further agrees that Lenders have "control" over the Deposit Account, as such term is defined in Section 9104 of the California Commercial Code.


3. Lenders' Agreement of Forbearance . Lenders agree to forbear in the exercise of any remedies with respect to the Loan during the Forbearance Period. Upon the expiration or termination of the Forbearance Period, Lenders shall be entitled to pursue all remedies provided for under the Loan Documents, except as provided herein.


4. Interest Rate . From May 31, 2003 (the maturity date of the Loan) through the expiration or termination of the Forbearance Period, interest shall accrue on the Loan at the default rate as provided in the Loan Documents.


5. Advances to Borrower During Forbearance Period . From the date of execution hereof until expiration or termination of the Forbearance Period, no advances shall be made on the Loan except as follows:


a. Upon the effectiveness of this Agreement and Borrower's payment of all accrued interest, Lenders shall advance a sum equal to the net amount of the cash collected by Lenders on account of Borrower's operations from June 19, 2003 through July 14, 2003, less the sum of $300,000.00, which shall be retained by Lenders to be applied to the Loan in accordance with the Loan Documents.


b. For the period commencing July 15, 2003, and ending on the earlier of the expiration or termination of the Forbearance Period, Lenders shall readvance amounts of cash collected by Lenders on account of Borrower's


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operations during such period, less a retention amount that shall become due from such collections beginning on the first (1st) business day of each week and which shall be applied to the Loan in accordance with the Loan Documents. The retention amount shall be determined as follows: (i) for the week beginning on Tuesday, July 15, and ending on Friday, July 18, 2003, and for each subsequent week through and including the week of August 29, 2003, the retention amount shall be $35,000.00 per week, (ii) for the week beginning September 1, 2003, and for each subsequent week through and including the "short" week of September 29 and 30, 2003, the retention amount shall be $40,000.00 per week, (iii) if the Forbearance Period is extended pursuant to paragraph 8 of this Agreement, no additional retention shall be due for the week ending October 3, 2003, and for each subsequent week through October 31, 2003, the retention amount shall be $40,000.00 per week, and (iv) for the week beginning on Monday, November 3, 2003, and ending on November 28, 2003, the retention amount shall be $45,000.00 per week. Borrower must pay each week's retention amount through collections or separate payment by the end of the week in which the retention amount is imposed, and its failure to do so shall permit Lenders, at their option, to terminate the Forbearance Period.


Advances shall be made by Agent by 2:00 p.m. Mountain Time the next business day following Agent's receipt of a formal draw request from Borrower in the manner specified in the Loan Documents and in form and content acceptable to Agent; provided, such draw request is received by Agent before 10:00 a.m. Mountain Time on a regular business day.


6. Reports . Not later than fifteen (15) days following the execution hereof, Borrower shall deliver to Lenders Borrower's final FYE 2002 audited financial statements prepared by an accounting firm acceptable to Lenders. No later than September 1, 2003, Borrower shall deliver to Lenders a detailed list of Borrower's fixed assets, inventory and equipment and specific physical location of same. Additionally, not later than five (5) days following the execution hereof, Borrower shall deliver to Lenders: (i) accounts receivable aging for all Borrower's accounts for the period ending June 30, 2003, (ii) accounts payable aging for all Borrower's accounts for the period ending June 30, 2003, and (iii) Borrower's financial statements as of May 31, 2003, including profit and loss statements, balance sheet, and statement of cash flows. Further, on July 15, 2003, and the first day of each successive week thereafter, Borrower shall provide to Lenders: (i) weekly accounts receivable agings for all of its accounts, (ii) weekly accounts payable agings for all of its accounts; (iii) summarized weekly billing and collection i
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