Forbearance Agreement
(Bankruptcy, Loan, and other Debt Workouts)


This forbearance agreement form is executed between a borrower and its lender. This form includes practical guidance, drafting notes, alternate, and optional clauses. When faced with an existing or impending default under a loan agreement, a company may request that the lender forbear for a limited period of time from taking legal actions that it may otherwise be entitled to take in order to allow the company some time to resolve its financial problems. Key to negotiating any forbearance agreement is a clear understanding of, among other things, the defaults under the loan agreement, the rights and remedies available to the lender, and what the parties are hoping to accomplish during a forbearance period to address the company's underlying business and/or financial problems. In analyzing these issues, the parties will need to carefully review the loan documentation to determine the nature and scope of the defaults and what remedies are available to the lender. Once the parties ...