FORBEARANCE AGREEMENT
A forbearance agreement for a loan is an agreement between a lender (and its agents) and a borrower who are parties to a loan, credit or finance agreement whereby the borrower agrees to postpone, reduce, or suspend payment due on a loan for a limited and specific time period due to event such as borrower‟s illness, financial difficulties etc. It contains a payment schedule created by both parties, which the borrower agrees to adhere to for the duration of the agreement. In this agreement, a lender agrees to forbear-from taking action against a borrower that the lender would normally have the right to take under the original agreement.
Forbearance Agreement
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FORBEARANCE AGREEMENT
This Forbearance Agreement (this “Agreement”) is dated as of _______________ and is entered into by and among __________________of _________________(referred to herein as the “Borrower”), and __________________of _________________________________(referred to herein as the “Lender”), individually referred to as „Party‟ and collectively as „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 as 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 Borrowers‟ failure to make _________________[ mention type of payment such as monthly loan repayments] in accordance to the Clause ____ of the Loan Agreement with respect to the fiscal year [month/s of ___] (such Event of Default, the “Existing Default”); and WHEREAS, Lender is willing to forbear from enforcing its rights that arise because of the Existing Default for a limited period of time, provided that Borrower comply with the terms of this Agreement. WHEREAS, the Parties are entering into this Agreement with the understanding and agreement that, except as specifically provided herein, none of the Lender‟s rights or remedies as set forth in the Loan Agreement or any other document are being 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 as follows: 1. DEFINITIONS 1.1 All capitalized terms used herein (including in the introductory paragraph and recitals set forth above) and 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: “Forbearance Default” means (a) the occurrence of any Default or Event of Default other than the Existing Default; (b) the failure of Borrower to comply with any term, condition or covenant set forth in this Agreement, (c) any representation made by Borrowers under or in connection with this Agreement shall prove to be materially false or misleading as of the date when made or
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(d) the filing of any petition (voluntary or involuntary) under the insolvency or bankruptcy laws of the United States or any state thereof, or of any foreign jurisdiction, with respect to a Borrower, any of its affiliates, or any of its Subsidiaries. “Termination Date” means the earlier to occur of (a) ________________(any specific date) or (b) the date upon which a Forbearance Default occurs. 2. CONFIRMATION BY BORROWERS OF OBLIGATIONS.
Borrower acknowledges and agrees that as of the date hereof, the Borrower has no right of offset, defence, or counterclaim with respect to the