Forbearance Agreement (Commercial Real Estate Loan)
Summary
This template is a forbearance agreement that can be used in connection with a commercial real estate loan, where borrower has defaulted on the loan and lender agrees to forbear from exercising its rights and remedies under the applicable loan documents. This template contains practical guidance, drafting notes, and optional clauses. A forbearance agreement differs from a loan modification agreement in that lender does not waive any applicable existing defaults. Instead, lender merely agrees to forbear exercising the remedies to which lender is entitled as a result of the default. The forbearance is often called a "standstill". In an effort to improve its enforcement ability, the lender's forbearance agreement may also require that the borrower and any guarantors make certain acknowledgments, stipulations, waivers, and/or releases. The borrower will argue that the forbearance agreement should not improve the lender's position and that such provisions should be negotiated in the actual ...