VIEWS: 3,576 PAGES: 8 CATEGORY: Financing With Debt POSTED ON: 11/4/2009
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.
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 right and corporate power to enter into, execute, and perform its obligations pursuant to this Agreement. 5.3 This Agreement, and all other loan documents including the Loan Agreement, shall constitute a valid and legally binding Agreement enforceable against each Party hereto in accordance with its terms and subject to the effects of bankruptcy, insolvency, fraudulent conveyance, other laws affecting creditors’ rights generally, and general equitable principals. © Copyright 2013 Docstoc, Inc. registered document proprietary, copy not 3 5.4 This Agreement has been entered into without force, duress, or intimidation, and actions taken by both Parties to enter into this Agreement have been willful and on a fully-informed basis. 5.5 Each Party has read and understands this Agreement, has consulted with and been represented by legal counsel in connection herewith, and has been advised by its counsel of its rights and obligations hereunder. 6. COVENANTS Borrower hereby covenants and agrees with Lender and its agents as follows: 6.1 Borrower and its authorized representatives shall continue to perform and observe all terms and conditions contained in the Loan Agreement and other loan documents. 6.2 Borrower shall reimburse Lender for all costs and expenses incurred by Lender and its agents in connection with the negotiation, preparation, and enforcement of this Agreement including, without limitation, reasonable attorneys’ fees and legal expenses. 6.3 ___________________________________________________ (Mention whether the outstanding principal/monthly repayment balance will paid with or without any “forbearance fee”). 7. GENERAL RELEASE 7.1 Each Party hereby absolutely and unconditionally releases and forever discharges Lender and its agents (each a “Released Party”) from any and all claims, demands, or causes of action of any kind, nature or description, whether arising in law or equity or upon contract or tort or under any state or federal law or otherwise, which such Party has had, now has, or has made claim to have against any such person for or by reason of any act, omission, matter, cause, or thing whatsoever arising from the beginning of time up to and including the date of this Agreement, whether such claims, demands, and causes of action are matured or unmatured or known or unknown. 7.2 Each Party, on behalf of itself and its successors, assigns, and other legal representatives, hereby absolutely, unconditionally, and irrevocably, covenants and agrees with and in favor of each Released Party that it will not sue (at law, in equity, in any regulatory proceeding, or otherwise) any Released Party on the basis of any claim released, remised, and discharged by such Party pursuant to the above release. If any Party or any of its successors, assigns, or other legal representatives violates the foregoing covenant, each Party, for itself and its successors, assigns, and legal representatives, hereby agrees to pay, in addition to such other damages as such Party may sustain as a result of such violation, all attorneys’ fees and costs incurred by such Party as a result of such violation. 7.3 The provisions of this paragraph shall survive the termination of the Loan Agreement and payment in full of the Obligations. © Copyright 2013 Docstoc, Inc. registered document proprietary, copy not 4 8. MISCELLANEOUS 8.1 Governing Law This Agreement shall be governed by, and shall be construed and enforced in accordance with, the laws of the State of _____ without regard to conflicts of law principles. 8.2 Counterparts This Agreement may be executed in any number of counterparts, and by different Parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, and all of which together shall constitute but one and the same instrument. 8.3 Ratification Each Party hereby restates, ratifies, and reaffirms each and every term and condition set forth in the Loan Agreement and loan documents effective as of the date first set forth above. 8.4 Reaffirmation Each Party signatory hereto hereby reaffirms each and every covenant, condition, obligation, and provision set forth in the loan documents, as modified hereby. 8.5 Integration This Agreement, together with the loan documents, incorporates all negotiations as between the Parties hereto with respect to the subject matter hereof and is the final expression and agreement of the Parties hereto with respect to the same. 8.6 Waiver A waiver of a condition in, or breach of, the foregoing in a particular instance shall not operate as a waiver of other or subsequent conditions or breaches of the same or a different kind. Lender’s exercise or failure to exercise any rights under this Agreement in a particular instance shall not operate as a waiver of its right to exercise the same or different rights in other instances. Except as expressly provided to the contrary in this Agreement, all the terms, conditions, and provisions of the Loan Agreement shall continue in full force and effect. 8.7 Consent to Jurisdiction EACH PARTY HEREBY CONSENTS TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED WITHIN THE COUNTY OF _____, STATE OF ____ AND IRREVOCABLY AGREES THAT, SUBJECT TO AGENT’S ELECTION, ALL ACTIONS OR PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE LITIGATED IN SUCH COURTS. EACH PARTY © Copyright 2013 Docstoc, Inc. registered document proprietary, copy not 5 EXPRESSLY SUBMITS AND CONSENTS TO THE JURISDICTION OF THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS. EACH PARTY HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE UPON SUCH PARTY BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, ADDRESSED TO THE ADDRESSES SET FORTH IN THE LOAN AGREEMENT AND THAT SERVICE SO MADE SHALL BE COMPLETE _____ (___) DAYS AFTER THE MAILING. 8.8 Waiver of Jury Trial EACH PARTY HEREBY WAIVES THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. EACH PARTY ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS RELIED ON THE WAIVER IN ENTERING INTO THIS AGREEMENT AND THE OTHER LOAN AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY WARRANTS AND REPRESENTS THAT EACH HAS HAD THE OPPORTUNITY OF REVIEWING THIS JURY WAIVER WITH ITS RESPECTIVE LEGAL COUNSEL AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS. 8.9 Reaffirmation of Obligations Each Party hereby acknowledges that the loan documents and the obligations set forth herein constitute the valid and binding obligations of such Party, are enforceable against such Party in accordance with their respective terms, and hereby reaffirms its obligations under the loan documents. Lender’s entry into this Agreement or any of the documents referenced herein, its negotiations with any Party with respect to any loan document, its conduct in undertaking analysis or investigation of any “Security” for the obligations herein or in any loan document, its acceptance of payment from any Party or any other party made prior to the date hereof, or any other action or failure to act on the part of Lender shall not constitute: (a) a modification of any loan document or (b) a waiver of any Default or Event of Default under the Loan Agreement, including, without limitation, the Existing Defaults, or a waiver of any term or provision of any loan documents. 8.10 Severability In case any provision in this Agreement shall be deemed invalid, illegal or unenforceable, such provision shall be severable from the remainder of this Agreement and the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 8.11 Submission of Amendment The submission of this Agreement to the Parties, their agents, or attorneys for review or signature does not constitute a commitment by Lender to forbear from exercising any of its rights and remedies provided under the Loan Agreement or any loan document, and this Agreement © Copyright 2013 Docstoc, Inc. registered document proprietary, copy not 6 shall have no binding force or effect until all of the conditions precedent to the effectiveness of this Agreement have been satisfied. 8.12 Modification This Agreement may not be amended, waived, or modified in any manner without the written consent of the Party against whom the amendment, waiver, or modification is sought to be enforced. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed as of the date first set forth above. Borrower: By: _______________________ Name: _____________________ Lender: By: _______________________ Name: _____________________ © Copyright 2013 Docstoc, Inc. registered document proprietary, copy not 7
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