Docstoc

Forbearance Agreement

Document Sample
Forbearance Agreement Powered By Docstoc
					This Forbearance Agreement is an agreement between a lender and a borrower
whereby the lender agrees to allow the borrower to postpone, reduce, or suspend
payment due on a loan for a limited time period. The borrower can suspend payments
if he or she encounters a sudden illness or financial difficulties. Additionally, the lender
agrees to refrain from taking action against the borrower for lack of payment. This
agreement is ideal for lenders or borrowers who want to forebear payment due to a
sudden illness, financial difficulty, or other valid reasons.
                             FORBEARANCE AGREEMENT
This Forbearance Agreement (this “Agreement”) is herby entered into as of this ________ day of
__________, _____ by and between __________________ of _________________ (the
“Borrower”) and __________________ of _________________________________ (the
“Lender”), each of which is individually referred to herein as the “Party” and both of which are
collectively referred to herein as the “Parties.”
NOTE: [Lender’s agent may be also a Party to this Agreement]

                                                       RECITALS

WHEREAS, Lender and Borrower are Parties to that certain Loan Agreement dated the ____ day
of _________, ______ (as amended, restated, supplemented, or otherwise modified from time to
time (the “Loan Agreement”);

WHEREAS, an Event of Default has occurred under Clause __ of the Loan Agreement due to
the Borrower’s failure to make _________________ [mention type of payment] and, specifically,
is         in           arrears        for        the         following           payments:
________________________________________________ (the “Existing Default”);

WHEREAS, Lender is willing to forbear from enforcing its rights arise from the Existing Default
for a limited period of time, provided that Borrower comply with the terms of this Agreement;
and

WHEREAS, the Parties enter into this Agreement with the understanding and agreement that,
except as specifically provided herein, none of Lender’s rights or remedies as set forth in the
Loan Agreement or any other document are waived or modified by the terms of this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereto agree to the following terms.

                                                          TERMS

1.       DEFINITIONS

1.1     All capitalized terms used herein (including in the introductory paragraph and the recitals
set forth above) that are not otherwise defined shall have the meanings assigned to such terms in
the Loan Agreement.

1.2      The following terms used in this Agreement shall have the meanings set forth below:

       a.      “Forbearance Default” means: (i) the occurrence of any Default or Event of
Default other than the Existing Default; (ii) the failure of Borrower to comply with any term,
condition, or covenant set forth in this Agreement; (iii) any representation made by Borrower
under or in connection with this Agreement that later proves to be materially false or misleading
as of the date made; or (iv) the filing of any petition (voluntary or involuntary) under the

© Copyright 2013 Docstoc, Inc. registered document proprietary, copy not               2
insolvency or bankruptcy laws of the United States, any state therein, or any foreign jurisdiction,
with respect to Borrower and any of its affiliates or subsidiaries.

        b.      “Termination Date” means the earlier to occur of: (i) ________________ (any
specific date) or (ii) the date upon which a Forbearance Default occurs.

2.       CONFIRMATION BY BORROWERS OF OBLIGATIONS

Borrower hereby acknowledges and agrees that, as of the date first set forth above, Borrower has
no right of offset, defense, or counterclaim with respect to the obligations owed pursuant to this
Agreement.

3.       AGREEMENT TO FORBEAR

Provided that no Forbearance Default occurs, Lender hereby agrees to refrain, through the
Termination Date, from exercising any of its rights and remedies under the Loan Agreement or
any other loan document that may exist by virtue of the Existing Default; provided, however,
that in no event shall the foregoing be deemed to limit, modify, amend, waive, or otherwise
affect Lender’s rights and remedies that exist under any loan document [mention specific
agreements or documents existing between the Parties] due to the existence of the Existing
Default, all of which rights and remedies are hereby expressly reserved and may be enforced by
Lender in accordance with the terms of the such [loan document(s)]. If Borrowers make all
payments required which are the subject of this Agreement in accordance with the terms herein
and Borrower comply with all other terms, covenants, and conditions set forth in this Agreement,
Lender agrees that the Existing Default shall be deemed waived.

4.       AGREEMENT TO DEFER PAYMENT

_________________________________________ [Specify if there is any deferment of
payment]

5.       REPRESENTATIONS AND WARRANTIES

Both Parties warrant and represent that:

5.1    Borrower has made full disclosure to Lender and its agents of all Existing Defaults and
Events of Default and all other disclosures as is required under Clause ___ of the Loan
Agreement.

5.2    Each Party to this Agreement has the legal ri
				
DOCUMENT INFO
Description: This Forbearance Agreement is an agreement between a lender and a borrower whereby the lender agrees to allow the borrower to postpone, reduce, or suspend payment due on a loan for a limited time period. The borrower can suspend payments if he or she encounters a sudden illness or financial difficulties. Additionally, the lender agrees to refrain from taking action against the borrower for lack of payment. This agreement is ideal for lenders or borrowers who want to forebear payment due to a sudden illness, financial difficulty, or other valid reasons.