Forbearance Agreement - Long Format

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This Forbearance Agreement (Long Format) is for use by a borrower and a bank who will agree to postpone exercising its rights and remedies under a default.

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This Forbearance Agreement is between a borrower and a bank who agrees to postpone exercising its rights and remedies with regard to a default by the borrower. This agreement contains specifics regarding the loan or credit agreement including the unpaid balance, amount of accrued interest and collateral held by the bank in relation to the loan. It also details the amounts that are in default and the extended term of the loan pursuant to this agreement.

This agreement acknowledges the conditions which must be met prior to this forbearance and the bank's rights to exercise all available rights and remedies upon termination of the forbearance period In addition, this agreement contains provisions regarding the borrower's representations and warranties and who will be responsible for any forbearance and loan extension fees.

This Forbearance Agreement includes the following provisions:
  • Parties: Specifies the bank, or agent acting in its capacity, and the borrower who postpone rights and remedies the bank can take due to default on payments;
  • Recitals: Terms include amount of loans from bank to the borrower, obligations owed by borrower, collateral held by the bank, identified defaults and borrower's request for forbearance and loan modification;
  • Reaffirmation: Borrower desires to reaffirm all obligations contained in any credit agreement;
  • Forbearance: Provisions include that forbearance is limited to identified defaults, no new events of defaults and the termination of forbearance period;
  • Additional Collateral: Sets out any additional security which the borrower will grant to the bank in order to forbear the debts;
  • Conditions Precedent: Provisions regarding receipt of documents, reimbursement of costs and expenses by the bank and payment of forbearance fees and past due interest;
  • Borrower's Representations/Acknowledgments: Representations made by borrower which include accuracy of representations in all documentation, financial information, banks have not breached any duty to borrower and all loan balances due are correct;
  • Signatures: Both parties must sign the agreement in the presence of a notary.

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  3. Forbearance Agreement
State Law Compliance: This form complies with the laws of all states
This is the content of the form and is provided for your convenience. It is not necessarily what the actual form looks like and does not include the information, instructions and other materials that come with the form you would purchase. An actual sample can also be viewed by clicking on the "Sample Form" near the top left of this page.
 
 
Forbearance Agreement

 

 
THIS FORBEARANCE AGREEMENT (the "Forbearance Agreement") is made and dated as of ______ by and among the Banks currently party to the Credit Agreement described in Recital A below; ______, acting in its capacity as the Agent for the Banks; and ______, a[n] ______ corporation (the "Borrower").
 
Recitals
 
   A.   Loans from Banks to Borrower.  [banks party to credit agreement] (the "Banks") and Borrower are parties to the Credit Agreement dated as of ______ (the "Credit Agreement").  Under the Credit Agreement, Banks have made available to Borrower loans and other financial accommodations (including an RLC and Letters of Credit, collectively, the "Loans") in the committed amount of $______.
 
   B.   Obligations Owing from Borrower to Banks.  Computed as of ______, Borrower is indebted as follows to Banks:  (1) in the amount of $______ for unpaid principal; (2) in the amount of $______ in interest accrued at the nondefault rate (exclusive of any adjustment in the interest rates owed by Borrower under Section 6.1 below); and (3) in additional amounts for accrued and accruing interest, recoverable costs (including reasonable attorneys' fees), certain indemnities, and other expenses.
 
   C.   Collateral Held by Banks for Satisfaction of Obligations Owing from Borrower.  As security for satisfaction of the Obligations owing from Borrower, Banks hold valid and perfected, first and prior liens in (among other things) the Collateral described in the Security Agreements executed by Borrower in conjunction with the Credit Agreement.  The lien and security interests held by the Banks are evidenced by (among other things) the Security Documents and all other related Credit Documents executed and delivered by Borrower in connection with the Credit Agreement.
 
   D.   No Defenses.  Borrower has no defenses, offsets, counterclaims, or adverse claims of any kind or amount with respect to the Obligations.  In addition, Borrower has no defenses, offsets, counterclaims, or adverse claims of any kind with respect to the Collateral interests held by Banks as security for satisfaction of the Obligations.
 
   E.   Identified Defaults.  As identified on Exhibit "A" to this Forbearance Agreement, Borrower is in default of certain of the financial covenants contained in the Credit Agreement (the "Identified Defaults").
 
   F.   Request for Certain Forbearance and Loan Modifications.  Borrower has requested that, notwithstanding the existence of the Identified Defaults, Agent and the Banks forbear from exercising their rights and remedies with respect to the Identified Defaults through ______, or, if extended pursuant to the terms of this Forbearance Agreement, through ______.  In addition, Borrower has requested that Banks modify certain terms and conditions of the Credit Documents.  Although Banks are under no obligation to do so, Banks are willing to provide Borrower with limited forbearance, and Banks are willing to provide limited modification of the Credit Documents in the form of permanent amendments to the Credit Agreement in certain respects as set forth more particularly herein upon the terms and conditions set forth herein.  The forbearance is being provided by Banks to allow Borrower to secure replacement financing to satisfy indefeasibly the entire amount of the Obligations owing to Banks under the Credit Documents.
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
 
Provisions
 
1.   Accuracy of Recitals
 
Borrower acknowledges that the Recitals set forth above are true, accurate and correct.  The Recitals are incorporated into these Provisions without any difference or distinction between the two (2) segments of this Forbearance Agreement.
 
2.   Capitalized Terms
 
Unless otherwise indicated, all capitalized terms used in this Forbearance Agreement will correspond to the defined terms used in the Credit Agreement.
 
3.   Reaffirmation of Loans
 
Except as modified by this Forbearance Agreement, Borrower reaffirms all of its Obligations under the Credit Documents.
 
4.   Forbearance
 
Provided that Borrower satisfies all of the conditions set forth in paragraph 5 below, Banks hereby agree to forbear from exercising their rights and remedies with respect to the Identified Defaults from the effective date of the Forbearance Agreement through ______, unless extended further through ______ (the "Forbearance Period") by the payment by Borrower of the Extension Fee (defined below) and by the further modification of the Credit Agreement to provide for an additional 100 basis points increase in the nondefault interest rate and in the Default Rate.  In addition, the forbearance provided by Banks to Borrower is limited as follows:
 
4.1   Forbearance Limited to Identified Defaults
 
Banks' forbearance is limited solely to the suspended exercise of their respective rights and remedies arising under the Credit Documents as a result of the Identified Defaults, and Banks shall not be deemed to have suspended or waived any rights or remedies they may have with respect to any other existing breach, default or Event of Default under the Credit Documents, any new breach, default or Event of Default occurring thereunder during the Forbearance Period, or any breach of this Forbearance Agreement.
 
 
4.2   No New Events of Default
 
During the Forbearance Period, there shall occur no new Event of Default or an event which, with the passage of time or the giving of notice or both, would constitute an Event of Default under any one or more of the Credit Documents or this Forbearance Agreement, nor shall there be a breach or failure of any warranty, representation or covenant as described in this Forbearance Agreement.
 
4.3   Agreement in the Nature of Forbearance Only
 
Borrower hereby acknowledges that Banks' obligations under this Forbearance Agreement are in the nature of a conditional forbearance only, and that Banks have made no agreement or commitment to provide additional forbearance, to modify further or to extend the Credit Documents beyond the Forbearance Period.  Borrower also acknowledges that the Identified Defaults are not cured as a result of this Forbearance Agreement.
 
4.4   Termination of the Forbearance Period
 
The Forbearance Period shall end on the first to occur of the following:
 
(a)   ______, unless the Forbearance Period is extended through ______ as provided above.
 
(b)   A breach by Borrower of any of the covenants, representations and/or warranties set forth in this Forbearance Agreement.
 
(c)   The occurrence of any new Event of Default under any of the Credit Documents, or the occurrence of any event which, with the passage of time or giving of notice or both, would constitute an Event of Default thereunder.
 
(d)   Any bankruptcy petition is filed by or against Borrower.
 
(e)   Borrower makes any assignment for the benefit of its creditors, or a receiver is appointed for Borrower's business.
 
4.5   Exercise of Rights and Remedies Upon Termination of Forbearance Period
 
Upon termination of the Forbearance Period, Banks are free to exercise all of their rights and remedies under the Credit Documents, including but not limited to, the rights and remedies available to the Banks as a result of the Identified Defaults.
 
5.   Conditions to Forbearance
 
In addition to all other conditions set forth in Section 4 above, the forbearance provided by Banks under this Forbearance Agreement is strictly conditioned upon satisfaction by Borrower of the following:
 
5.1   No New Defaults
 
During the Forbearance Period, there will occur no new event which would allow Banks with or without notice to accelerate Obligations, to discontinue extending credit to Borrower under applicable Credit Documents, or to exercise any rights or remedies against any collateral for Obligations owed to any Bank or an event which, with the passage of time or the giving of notice or both, would constitute an Event of Default under any one or more of the Credit Documents, or a default occurs under the Forbearance Agreement (collectively, an "Incipient Default"), and there will be no breach or failure of any warranty, representation or covenant contained in this Forbearance Agreement.
 
5.2   Forbearance from Other Lenders
 
During the Forbearance Period, no other lender, creditor, or lessor will enforce its rights or remedies in relation to any default committed by Borrower under any loan agreement, lease agreement, security agreement, or other financial agreement.  In addition, and consistent in scope and time with the forbearance provided by the Banks, Borrower will obtain and maintain at least through the Forbearance Period forbearance for defaults of obligations owing to its other major lenders (the "Other Forbearance Agreements"), including direct lenders and conduit lenders that provide financing for Borrower and its Subsidiaries and Affiliates.  Copies of the Other Forbearance Agreements will be delivered to the Banks.
 
5.3   Delivery of Outstanding Items
 
By the time of execution of the Forbearance Agreement, and except for the delivery of certain stock certificates identified on Exhibit "A", Borrower will have delivered to Banks any outstanding property or documents relating to the Collateral and Obligations presently covered by the Credit Agreement, including, but not limited to, the delivery of Stock pledged as security for repayment of the Obligations.
 
5.4   Delivery of Consents
 
As evidenced by its signature below, any Guarantor which has guaranteed repayment of the Obligations expressly consents to the terms and conditions of this Forbearance Agreement, and confirms that its guarantee remains in full force and effect.  Likewise, Borrower will deliver to Banks the consent to the Forbearance Agreement by any holder of Subordinated Debt and by any party to any inter-creditor agreement with any of the Banks.
 
5.5   Delivery of Financing Term Sheets
 
By ______, Borrower will deliver to Banks signed term sheets or similar evidence to confirm that Borrower is pursuing from a lending source (or sources) financing in an amount sufficient to pay by ______ the entire amount of the outstanding Obligations (or such other amount of the Obligations acceptable to Banks in their sole and absolute discretion).  In this regard, Borrower will provide Banks by ______ copies of the term sheets or such other documents which reflect the terms, conditions, and amount of the financing sought by Borrower.
5.6   Pursuit of Certain Sales and Financings
 
Upon execution of the Forbearance Agreement, Borrower will seek financing or sales of certain of its domestic and Foreign Affiliates and assets.  Each of the Banks will have the right to approve the financing and sales of Borrower's domestic and foreign Affiliates and assets.  In the event of an Incipient Default, Borrower will not have the right to sell or refinance its domestic or Foreign Affiliates or assets.  Borrower will deliver to the Banks ______% of the net proceeds of any asset sales, new financing, equity sales, or equity infusions obtained by Borrower (other than the cash infusion referred to in Section 5.9 below), and such proceeds will be used to pay down permanently the Obligations owing to the Banks.
 
5.7   Full Cooperation with Consultants
 
During the Forbearance Period, Borrower will cooperate fully with representatives of ______, consultants engaged by Banks to assess and address matters germane to Borrower's performance under the Credit Documents.  Without limiting the generality of the foregoing, Borrower acknowledges and agrees that ______ will do the following during the Forbearance Period:  (a) assist in the preparation, evaluation and revisions of the Borrower's business plans, cash flow forecasts (including a 13week cash flow forecast) and financial projections, test the Borrower's critical assumptions, identify opportunities for improvement in the planning process and, as appropriate, assist management in the implementation and control of such programs; (b) assist in projecting and managing the Borrower's cash position and trade credit on an ongoing basis and in preparing such projections, reports, budgets, and analyses as may be reasonably required by the Borrower's lenders or investors; and (c) develop processes and procedures to ensure that the Banks' information needs are met in a timely manner according to this Forbearance and Credit Documents including borrowing base certificates and all financial reporting requirements.
 
5.8   Minimum Accounts and Inventory Levels
 
During the Forbearance Period, Borrower will maintain Eligible Accounts Receivable in an amount of at least $______ tested weekly, and Borrower will maintain a combined level of Eligible Accounts and Eligible Inventory in an amount of at least $______ tested monthly.
 
5.9   Cash Infusions
 
Within [spelled number of days] (______) business days of the execution of the Forbearance Agreement, Borrower will obtain from [names of shareholders] a cash infusion of at least $______ (the "Principal Shareholder[s'/'s] Cash Infusion") which may be used for working capital.  The Principal Shareholder[s'/'s] Cash Infusion may take the form of an equity infusion, or the Principal Shareholder[s'/'s] Cash Infusion may take the form of subordinated unsecured debt.  In all events, the Principal Shareholder[s'/'s] Cash Infusion will be subordinated in all respects to the Obligations owing to the Banks, and the Principal Shareholder[s'/'s] Cash Infusion may not be repaid by Borrower unless and until all of the Obligations owing to the Banks are repaid indefeasibly and in full.
 
 
5.10   Additional Guaranties
 
As a condition precedent to the Forbearance Agreement, each of [names of shareholders] shall execute and deliver to the Agent a credit guaranty of the Obligations in form and substance satisfactory to the Agent and the Banks (the "Additional Guaranties"), which Additional Guaranties shall provide for joint and several liability of [names of shareholders] in the amount, collectively, of $______.  From and after the effective date of this Forbearance Agreement, as used in the Credit Agreement and the other Credit Documents:  (a) the term "Subsidiary Guaranty" shall be deemed to include each of the Additional Guaranties, and (b) the terms "Subsidiary Guarantor" and "Loan Parties" shall be deemed to include [names of shareholders].
 
5.11   Account Control Agreements
 
No later than ______, the Borrower shall execute and deliver, and shall cause each financial institution with which the Borrower maintains deposit accounts in the United States (including, without limitation, demand deposits, time deposits and, savings accounts) to execute and deliver, to the Agent a deposit account control agreement in form and substance acceptable to the Agent and the Banks (the "Account Control Agreements").  The Borrower hereby represents and warrants to the Agent and the Banks that Schedule ______ hereto sets for an accurate and complete list of all such deposit accounts at and as of the date hereof and the Borrower covenants and agrees that it will not open any additional deposit accounts with any financial institution other than those listed on Schedule ______ without at least 30 days prior written notice to the Agent, and that it will, concurrently with the opening of such account, execute and deliver, and will cause such financial institution to execute and deliver, an Account Control Agreement relating to all deposit accounts of the Borrower maintained with such financial institution.
 
6.   Modifications
 
The Credit Documents are hereby modified and amended as described below.  In the event of any conflict between the terms of the Credit Documents and the terms of this Forbearance Agreement, this Forbearance Agreement shall control.
 
6.1   Increase in Certain Interest Rates
 
Effective as of ______, the nondefault interest rate on the RLC is Prime Rate plus ______% per annum, the Default Rate on the RLC is Prime Rate plus ______% per annum, and all interest and related charges are based on the Prime Rate and not on any LIBOR Based Rate.  In the event that the Forbearance Period is extended beyond ______, then, effective as of ______, the nondefault interest rate on the RLC is Prime Rate plus ______% per annum, the Default Rate on the RLC is Prime Rate plus ______% per annum.
 
6.2   Elimination of RLC Borrowing Base Exclusion
 
The RLC Borrowing Base Exclusion is eliminated.
 
 
6.3   Reduction of RLC Commitment
 
The RLC Commitment is limited to the lowest amount of Obligations owing from Borrower to Banks during the Forbearance Period.
 
6.4   Liquidation of Marketable Securities
 
Banks may immediately liquidate the approximately $______ of Marketable Securities in the possession of ______ as Agent, and the net proceeds of the Marketable Securities will be applied to reduce permanently the Obligations owing from Borrower to Banks.
 
6.5   No New Advances
 
No new advances will be made under the RLC.  During the Forbearance Period, Borrower's cash requirements will be satisfied out of collections of Accounts, the Principal Shareholder[s'/'s] Cash Infusion, and the portion of proceeds made available to Borrower under this Forbearance Agreement from the approved sale or financing of domestic or Foreign Affiliates or assets.
 
6.6   Sequestration of Excess Cash Flow
 
Upon the execution of the Forbearance Agreement, Borrower will establish and maintain at ______ as Agent for the Banks a sequestered cash collateral account (the "Sequestered Account").  ______, as Agent for Banks, is hereby granted a security interest in the Sequestered Account. ______, as Agent for Banks, will have sole and exclusive dominion and control over the Sequestered Account, including, but not limited to, the sole and exclusive right to withdraw funds from the Sequestered Account.  Beginning with the week of ______, and at the end of each week during the Forbearance Period which corresponds to a payroll period for Borrower, and after reserving for a rolling cash reserve of $______, Borrower will deposit into the Sequestered Account ______% of all cash actually collected in excess of cash actually disbursed.  In addition, Borrower is limited to payment of the expenses (in kind and in amount) listed on the Cash Flow Forecast attached as Exhibit "C", along with the payment of the Obligations, the Forbearance Fee, the Extension Fee, and the Reimbursable Costs as set forth herein.  From time to time, Bank may apply the funds in the Sequestered Account to reduce permanently the amount of the Obligations owing from Borrower.
 
6.7   Capital Expenditures
 
From ______, through the end of the Forbearance Period, and unless otherwise agreed to in writing by Banks, Borrower will not incur any liability or expend cash for capital expenditures over and above the $______ in capital expenditures incurred and to be paid during the ______.
 
6.8   Additional Collateral
 
As additional security for satisfaction of the Obligations, Borrower hereby grants to Banks Liens and security interests in all assets and Stock owned by Borrower which do not currently serve as Collateral (including, but not limited to, all equipment and intellectual property owned by Borrower), as well as Liens and security interests in all of the assets and Stock of each of Borrower's Subsidiaries and Affiliates, including the Foreign Affiliates which were not originally parties to the Credit Agreement (collectively, the "Additional Collateral").  In this regard:  (a) upon execution of the Forbearance Agreement:  (1) Banks are hereby granted a Lien and security interest on all equipment in the schedule delivered to Banks on ______ by Borrower, (2) and Banks are hereby granted a Lien and security interest on intellectual property (including, but not limited to, all patents, patent applications, trademarks, trademark applications, copyrights, and copyright applications) owned by the Borrower; and (b) effective as of ______, Banks will receive (and are hereby granted) Liens on the balance of the Additional Collateral.  In addition, by ______, Borrower will obtain credit insurance (the "Credit Insurance") for the accounts receivable pledged by ______.  The Credit Insurance will name as an additional insured ______ as Agent for the Banks, and the Credit Insurance will be in form and substance reasonably satisfactory to the Banks.  Borrower and its Affiliates and Subsidiaries will execute such security agreements, financing statements, and other documents reasonably requested by Banks to cause the Obligations owing to Banks to be secured by valid and enforceable first priority Liens and security interests in the Additional Collateral.  In addition, Banks are granted the same rights and remedies with respect to the Additional Collateral as Banks were granted with respect to the Collateral under the Credit Documents.
 
6.9   Financial Information
 
In addition to any reports or financial information required under the Credit Documents, Borrower will furnish to each of the Banks on a monthly basis the following covering the months of ______ and each succeeding month during the Forbearance Period:
 
(a)   Borrower prepared consolidating and consolidated financial statements broken down by divisions of Borrower (balance sheet and income and expense statement) due within 15 business days of each month end.
 
(b)   An RLC Borrowing Base Certificate every month due within 16 business days of each month end.
 
(c)   Compliance Certificate due within 16 business days of each month end.
 
(d)   Weekly Accounts Receivable and Payable Agings (broken down by divisions of Borrowers) due within 2 business days of each week's end.
 
(e)   Weekly domestic sales reports (broken down by divisions of Borrower) and monthly consolidated sales reports due within 3 business days of each week's or month's end.
 
(f)   Inventory listings (broken down by divisions of Borrower) due for domestic assets and for Foreign assets within 16 business days of each month end; and, with respect to Inventory, listings will be broken down by location and Borrower will specify whether Inventory located at leased locations is subject to landlord lien waivers.
 
(g)   Rolling 13 Week Cash Flow Reports (in summary form consistent with the Cash Flow Report attached as Exhibit "C") due within 2 business days of each week end.
 
(h)   Backlog reports due within 20 days of each month end.
 
(i)   On ______, Borrower will deliver to Banks a statement reflecting Borrower's compliance with the financial covenants under the Credit Agreement for the quarter ending on ______.
 
(j)   Without limiting any other rights of Banks under the Credit Documents, during the Forbearance Period, and upon 48 hours' telephonic or written notice from any of the Banks, Borrower will provide Banks and their consultants with access to the books, records, and property of Borrower.
 
6.10   Negative Covenants
 
During the term of the Forbearance Period:
 
(a)   Other than trade credit incurred in the ordinary course of business, and except as otherwise provided in this Forbearance Agreement, Borrower will not incur any additional debt in excess of the Obligations; provided, however that Borrower may incur debt from Affiliates, Subsidiaries, or shareholders ("Affiliate Debt") so long as:  (a) the Affiliate Debt is on terms acceptable to Banks; (b) the Affiliate Debt is subordinated in priority and payment to the Obligations; and (c) no payments are made by Borrower with respect to the Affiliate Debt unless and until all of the Obligations are paid in full and the RLC Commitment is terminated.  In addition, Borrower will not make any capital contributions, loans, or other advances to any of its other Subsidiaries or Affiliates outside of the ordinary course of business.
 
(b)   Borrower will not make any payments of any kind (including principal, interest, or other amounts owed) on any existing or future loans from shareholders.
 
(c)   Except for Liens arising under the Credit Documents, and except for purchase money liens or security interests agreed to in writing by Banks for newly acquired or leased equipment, Borrower will not allow any new liens to be secured by property which is presently owned or hereafter acquired by Borrower or any of its Subsidiaries or Affiliates.
 
(d)   Borrower will not enter into any acquisitions without the prior approval of Banks.
 
(e)   Borrower will not declare or pay any dividends, Borrower will not pay any bonuses, and Borrower will not repurchase any of its stock.
 
6.11   Limitation on Borrowing Base Default
 
During the Forbearance Period, the failure of the Borrower to maintain a certain level of assets in its Borrowing Base will not constitute an Incipient Default so long as Borrower complies with the terms and conditions of Section 5.8 above.
 
 
7.   Conditions Precedent
 
Before this Forbearance Agreement becomes effective and Banks become obligated under it, and in addition to any other conditions stated in this Forbearance Agreement, all of the following conditions shall have been satisfied at Borrower's sole cost and expense in a manner acceptable to Banks:
 
7.1   Receipt of Documents
 
Banks will have received fully executed originals of this Forbearance Agreement, the Additional Guarantees and any other documents that Banks may require or request in accordance with this Forbearance Agreement and the Credit Documents, all in such form as Banks may require in their reasonable discretion.  Without limiting the generality of the foregoing, Borrower acknowledges and agrees that it shall be obligated to deliver to the Agent, duly executed by all parties thereto as applicable and in form and substance satisfactory to the Agent, the Banks and their respective counsel each of the following:  (a) such corporate resolutions, incumbency certificates, trust certifications and other authorizing documentation as the Agent may request; (b) an opinion of counsel to the Borrower, which counsel shall be satisfactory to the Agent, covering, as to the Borrower only, the following matters:  ______
 
7.2   Reimbursement of Banks' Costs and Expenses
 
Banks will have received reimbursement, in immediately available funds, of all reasonable costs and expenses incurred by Banks in connection with this Forbearance Agreement, including charges for legal fees and expenses of Banks' counsel ("Reimbursable Costs").  Reimbursable Costs will include the allocated costs for services for each Lender's outside counsel and inhouse staffs, such as legal and appraisal, and Reimbursable Costs will be paid upon the execution of this Forbearance Agreement and thereafter as provided below.  Upon execution of this Agreement, Borrower will pay Banks their current Reimbursable Costs in the aggregate amount of $______, payable as follows:  (a) $______ to ______ for services rendered through ______ as counsel for the Banks as a group; (b) $______ to ______, for services rendered through ______ as financial consultants for the Banks; and (c) ______  Thereafter, Borrower will pay all additional Reimbursable Costs incurred by Banks during the course of the Forbearance Period within seven (7) business days of delivery of any invoice for payment of Reimbursable Costs.
 
7.3   Payment of Forbearance Fee and Past Due Interest
 
Banks will have received from Borrower payment of the Forbearance Fee provided in paragraph 10 below, along with any past due interest owing with respect to the Obligations, including, but not limited to interest owing as a result of Section 6.1 below.
 
8.   Borrower's Representations and Warranties
 
Borrower represents and warrants to Banks as follows:
 
 
8.1   Accuracy of Representations in Forbearance Agreement and Credit Documents
 
All representations and warranties made and given by Borrower in this Forbearance Agreement and in the Credit Documents are accurate and correct.
 
8.2   No Default
 
Other than the Identified Defaults, no Event of Default has occurred and is continuing under the Credit Documents, and no event has occurred and is continuing which, with notice or the passage of time or both, would be an Event of Default.
 
8.3   Property
 
To the extent applicable, Borrower lawfully possesses and holds a 100% ownership interest in all of the Collateral for the Obligations.  Borrower owns all of the Collateral for the Obligations free and clear of any defects, reservations of title and conditional sales contracts, and free and clear of any Liens and security interests other than the Liens and security interests in favor of Banks.  There is no financing statement affecting any Collateral for the Obligations on file in any public office except for financing statements in favor of Banks.
 
8.4   Borrowing Entity
 
Each Borrower entity is a corporation which is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation.  There have been no changes in the organization, composition, ownership, structure or formation documents of Borrower since the inception of the Obligations.  In each state and country in which Borrower does business, it is properly licensed, in good standing, and, where required, in compliance with fictitious name statutes.
 
8.5   Authorization
 
This Forbearance Agreement, and any instrument or agreement required hereunder, are within Borrower's powers, have been duly authorized, and do not conflict with any of its organizational papers.
 
8.6   Enforceable Credit Documents/No Conflicts
 
The Credit Documents and this Forbearance Agreement, are legal, valid and binding agreements of Borrower, enforceable in accordance with their respective terms, and any instrument or agreement required hereunder or thereunder, when executed and delivered, is (or will be) similarly legal, valid, binding and enforceable.  This Forbearance Agreement does not conflict with any law, agreement, or obligation by which Borrower is bound.
 
 
 
 
8.7   Financial Information
 
All financial and other information (including, but not limited to the Cash Flow Reports) that has been or will be supplied to Banks is (a) sufficiently complete to give Banks accurate knowledge of Borrower's financial condition; (b) in form and content required by Banks; and (c) in compliance with all government regulations that apply.
 
9.   Borrower Acknowledgments
 
Borrower hereby acknowledges and agrees that:
 
9.1   No Breach By Banks
 
Each of the Banks (including all of its predecessors) has not breached any duty to Borrower in connection with the Obligations or the Credit Documents, and each Bank (including all of its predecessors) has fully performed all obligations it may have had or now has to Borrower.
 
9.2   Interest, Fees, and Other Charges
 
All interest, fees (including the Forbearance Fee under paragraph 10 below) or other charges (including the Reimbursable Costs under paragraph 7.2 above) imposed, accrued, or collected by Banks (including all their predecessors) under the Credit Documents or this Forbearance Agreement, and the method of computing the interest, fees, or other charges, were and are reasonable, proper, and agreed to by Borrower and were properly computed and collected.
 
9.3   No Waiver
 
By entering into this Forbearance Agreement, Banks do not waive any existing defaults (including the Identified Defaults) or any defaults hereafter occurring, and Banks do not become obligated to waive any condition or obligation in any agreement between or among any of the parties hereto.
 
9.4   No Future Obligations
 
Banks have no obligation to make any additional loan or extension of credit to or for the benefit of Borrower, and Banks have no obligation to provide additional forbearance or to extend further accommodations to Borrowers.
 
9.5   No Third Party Beneficiaries
 
This Forbearance Agreement is not intended for, and shall not be construed to be for, the benefit of any person not a signatory hereto.
 
9.6   Loan Balances
 
The outstanding balances owing on the Obligations, as described in this Forbearance Agreement, are true and correct.
9.7   Fair Consideration
 
All payments made and Liens granted by Borrower to Banks under the Credit Documents and this Forbearance Agreement are for fair consideration and reasonably equivalent value.
 
9.8   Notice of Identified Defaults
 
Borrower has received or waives all notice required from Banks under the Credit Documents with respect to the Identified Defaults; and, subject to the terms and conditions of this Forbearance Agreement, Banks presently are free to exercise all of their rights and remedies under the Credit Agreement as a result of the Identified Defaults committed by Borrower.
 
10.   Forbearance and Extension Fees
 
In consideration of the forbearance provided by Banks, Borrower will pay a fee of $______ (the "Forbearance Fee") which will be divided pro rata among the Banks in accordance with their respective amounts of the outstanding principal amount of the Obligations.  The Forbearance Fee is earned and will be paid upon the execution of this Forbearance Agreement.  In the event that Borrower wishes to extend the Forbearance Period beyond ______ and until ______, Borrower will pay an extension fee of $______ (the "Extension Fee") to be divided pro rata among the Banks in accordance with their respective amounts of the outstanding principal amount of the Obligations.  The Extension Fee will be paid in either two (2) or three (3) installments as follows:  (a) 20% of the Extension Fee will be paid on ______; (b) 30% of the Extension Fee will be paid on ______; and (c) in the event that Borrower delivers to Banks by ______ a binding commitment (the "Financing Commitment") reasonably acceptable to Banks for financing in amount sufficient to satisfy the Obligations in full by ______, the balance of the Extension Fee will be paid on ______.  In the event that the Financing Commitment is not delivered in a timely manner to Banks, then the balance of the Extension Fee will be payable on ______.  In the event that the Obligations are satisfied indefeasibly and in full prior to ______, the entire Extension Fee will be waived.  In the event that the Obligations are satisfied indefeasibly and in full after ______, but prior to ______, then 50% of the Extension Fee will be waived.  The Extension Fee may be paid from funds on deposit in the Sequestered Account.
 
11.   Release of Banks
 
In consideration of the agreements of Banks set forth in this Forbearance Agreement, Borrower and all of its respective heirs, personal representatives, predecessors, successors and assigns (individually and collectively, the "Releasors"), hereby fully release, remise, and forever discharge Banks, the parents of Banks and all other affiliates and predecessors of Banks, and all past and present officers, directors, agents, employees, servants, partners, shareholders, attorneys and managers of Banks, for, from, and against any and all claims, counterclaims, liens, demands, causes of action, controversies, offsets, obligations, losses, damages and liabilities of every kind and character whatsoever, including, without limitation, any action, omission, misrepresentation or other basis of liability founded either in tort or contract and the duties arising thereunder, that the Releasors, or any one of more of them, has had in the past, or now has, whether known or unknown, whether asserted or unasserted, by reason of any matter, cause or thing set forth in, relating to or arising out of, of in any way connected with or resulting from, the Loans, the Obligations, the Credit Documents, or this Forbearance Agreement.
 
12.   No Prejudice; Reservation of Rights
 
Except for the limited forbearance specifically set forth herein, this Forbearance Agreement shall not prejudice any rights or remedies of Banks under the Credit Documents.  Except for the limited forbearance specifically set forth herein, each Bank reserves, without limitation, all of its rights against any borrower, indemnitor, guarantor, or endorser of any of the Credit Documents and any other party liable in any way for satisfaction of the Obligations or other losses suffered by Banks.
 
13.   No Impairment/Security
 
Except as otherwise specifically set forth herein, the Credit Documents remain unaffected by this Forbearance Agreement and all of the Credit Documents shall remain in full force and effect.  Borrower's payment and performance of Borrower's various Obligations to Banks under the Credit Documents, including all extensions, amendments, renewals or replacements thereof, continue to be and shall be secured by the Liens arising under the Credit Documents.  Nothing contained herein shall be deemed a waiver of any of the rights and remedies that any of the Banks may have against Borrower or any other party, or of any of Banks' rights and remedies arising out of the Credit Documents.
 
14.   Purpose and Effect of Banks' Approval
 
Banks' approval of any matter in connection with the Loans shall be for the sole purpose of protecting Banks' security, rights, and remedies under the Credit Documents.  No such approval shall result in a waiver of any default of Borrower.  In no event shall Banks' approval be a representation of any kind by Banks with regard to the matter being approved.
 
15.   Integration
 
The Credit Documents and this Forbearance Agreement and its exhibits:  (a) integrate all the terms and conditions mentioned in or incidental to the Credit Documents; (b) supersede all oral negotiations and prior and other writings with respect to their subject matter; and (c) are intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in those documents and as the complete and exclusive statement of the terms agreed to by the parties.  If there is any conflict between the terms, conditions and provisions of this Forbearance Agreement and the terms, conditions, or provisions of any other agreement or instrument, including any of the other Credit Documents, the terms, conditions and provisions of this Forbearance Agreement shall prevail.  No modification of this Forbearance Agreement or the Credit Documents shall be effective unless in writing and signed by the applicable parties to be bound thereby.
 
16.   Notices
 
All notices, reports, and other communications provided for herein (collectively, for purposes of this paragraph 16, "notices") will be in writing and will be delivered:  (a) in person; (b) by telecopier, telefax, or other facsimile communication; or (c) by overnight courier, postage prepaid, addressed as follows:  ______
 
17.   Counterparts
 
This Forbearance Agreement and any attached consents or exhibits requiring signatures may be executed in as many counterparts as necessary or convenient, and by the different parties on separate counterparts each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same agreement.
 
18.   Invalidity
 
If any court of competent jurisdiction determines any provision of this Forbearance Agreement or any of the Credit Documents to be invalid, illegal or unenforceable, that portion shall be deemed severed from the rest, which shall remain in full force and effect as though the invalid, illegal or unenforceable portion had never been a part of the Forbearance Agreement or the Credit Documents.
 
19.   Governing Law, Venue, Forbearance of Jury Trial
 
This Forbearance Agreement shall be governed by and construed according to the laws of the State of ______.  Borrower hereby submits to jurisdiction and venue in ______ County, ______, and agrees that any and all pending or future litigation, arbitration, or bankruptcy proceedings relating to the Obligations shall be venued and maintained in ______ County, ______.  In the event of judicial proceedings relating to disputes arising under this Forbearance Agreement, Borrower agrees that all issues (including defenses, crossclaims and counterclaims) shall be resolved by a judge and not a jury; and, therefore, Borrower waives its rights to a jury trial which it otherwise would have had.
 
20.   Successors and Assigns
 
This Forbearance Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, Borrower may not transfer its rights under the Forbearance Agreement or the Credit Documents without the prior written consent of Banks.  Each of the Banks may transfer its rights under this Forbearance Agreement or the Credit Documents to any successor in interest.
 
21.   Construction
 
As used herein, the word "include(s)" means "include(s), without limitation", and the word "including" means "including, but not limited to".
 
22.   Default
 
The failure of Borrower to comply with any provision of this Forbearance Agreement or the failure of Borrower to comply with the terms and conditions of the Credit Documents (other than the Identified Defaults) shall constitute an Event of Default and shall entitle Banks to exercise any and all of their rights and remedies under the Credit Documents and this Forbearance Agreement.
 
23.   No Waiver
 
No failure to exercise, and no delay in exercising any right, power or remedy under any of the Credit Documents or under this Forbearance Agreement shall impair any right, power or remedy that Banks may have, nor shall such delay be construed to be a waiver of any of such rights, powers or remedies.  No waiver of any default or breach of Borrower shall be a waiver of any other default or breach or of any default or breach subsequently occurring.  Banks shall not be deemed to have waived any right, power, or remedy except in writing signed by an officer of Banks expressly stating that it is a waiver of same right, power or remedy.
 
24.   No Consent
 
Except as specifically provided in this Forbearance Agreement, no express or implied consent to any further forbearance or modifications involving any of the matters set forth in this Forbearance Agreement or otherwise shall be inferred or implied by Banks' execution of this Forbearance Agreement or any other action of Banks.  Banks' execution of this Forbearance Agreement shall not constitute a waiver, either express or implied, of the requirement that any further forbearance or modification of the Credit Documents shall require the express written approval of Banks.  Each of the Banks must provide any consent required from the Banks under this Forbearance Agreement.
 
25.   Cumulative Remedies
 
The rights and remedies of Banks under this Forbearance Agreement and the Credit Documents are cumulative and not exclusive of any rights or remedies that Banks would otherwise have, and may be pursued at any time and from time to time and in such order as Banks shall determine in their sole discretion.
 
26.   Mutual Agreement
 
The parties hereto agree that the terms and provisions of this Forbearance Agreement embody their mutual intent and that such terms and provisions are not to be construed more liberally in favor, or more strictly against, any party.  This Forbearance Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if it had been prepared by all of the parties.
 
27.   Time is of the Essence
 
Time is of the essence of this Forbearance Agreement and the Credit Documents.
 
28.   Headings
 
Section headings are for reference only and shall not affect the interpretation or meaning of any provisions of this Forbearance Agreement.
 
29.   Further Performance
 
Borrower, whenever and as often as shall be requested by the Banks, shall execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered such further instruments and documents and to do any and all things as may be requested by Banks in order to carry out the intent and purpose of this Forbearance Agreement and the Credit Documents.
 
30.   Survival
 
The representations, warranties, acknowledgments, and agreements set forth herein shall survive the date of this Forbearance Agreement.
 
31.   Binding Effect
 
This Forbearance Agreement shall be binding upon and inure to the benefit of Banks, Borrower, and their respective successors and assigns.
 
32.   Sharing of Information
 
Borrower authorizes each Bank (a) to disclose to other Banks any and all information which is now or hereafter in the disclosing Bank's possession concerning Borrower (the "Information "), including, without limitation, all cash deposits, account balances, financial statements, and other reports and information regarding the businesses, financial condition, operations, and creditworthiness of Borrower; and (b) to discuss with other Banks any matters which such Bank considers relevant to this Forbearance Agreement.  Borrower consents to all prior disclosures of Information between or among Banks and to all prior discussions between or among Banks regarding matters which they considered relevant to this Forbearance Agreement.  Borrower waives:  (a) any and all claims that Borrower may have against Banks based upon any prior or future communication between or among Banks; and (b) any and all rights that Borrower may now or hereafter have to require the disclosure to it of (1) the nature or contents of communication between or among Banks, (2) the date or time of such communications, or (3) the identities of Banks sharing Information or participating in such communications.  Each Bank agrees to hold and preserve any confidential Information it may receive regarding Borrower which is not already public, except for disclosure:  (a) to its affiliates and to other Banks; (b) to its attorneys and other consultants engaged to render services in connection with the Obligations and deemed by Bank to need such information; (c) to its auditors in connection with any audit of its books and records; (d) to any person as requested pursuant to or as required by law, regulation or legal process; (e) to any person in connection with any legal proceeding in which a Bank or any of its affiliates, directors, officers, employees or agents is a defendant; (f) to any person who is already in possession of such Information; (g) to any purchaser or any prospective purchaser of an interest in the Obligations and to any assignee or prospective assignee of any Bank, provided that such person agrees in advance to be bound by the terms of this section; (h) to any person to whom it is permitted pursuant to this Forbearance Agreement to disclose such Information; and (i) in any proceeding involving the exercise of the rights and remedies of any of the Banks under the Credit Documents or under this Forbearance Agreement.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
 
BORROWER:
 
[Sig Block Party 1]
 
[Notary Party 1]
 
AGENT:
 
By:     
   ______, ______ of [banks party to credit agreement]
 
 
STATE OF  ____________)
 
COUNTY OF __________)
 
This instrument was acknowledged before me on this     day of          ,       by ______.
 
 
   
Notary Public
 
My Commission Expires:    
   EXHIBIT A
IDENTIFIED DEFAULTS
 
1.   The Borrower has acknowledged that it is in default of certain of the financial covenants contained in the Credit Agreement as follows (the "Identified Defaults"):
 
(a)   An Event of Default exists under Paragraph ______ of the Credit Agreement on and as of ______ by virtue of the fact that the Borrower failed to be in compliance with the Fixed Charge Coverage Ratio set forth in Paragraph ______ of the Credit Agreement at and as of ______ (required Ratio ______; actual Ratio ______);
 
(b)   An Event of Default exists under Paragraph ______ of the Credit Agreement on and as of ______ by virtue of the fact that the Borrower failed to be in compliance with the Leverage Ratio set forth in Paragraph ______ of the Credit Agreement at and as of ______ (required Ratio ______; actual Ratio ______); and
 
(c)   ________________________________
 
2.   The Borrower has further acknowledged that the Identified Defaults have not been cured, waived or excused by the Agent and the Banks in any manner or to any extent and that there are no claims, demands, offsets or defenses, at law or in equity, that would defeat or diminish the present and unconditional right of the Agent and the Banks to enforce the rights, powers and remedies available to them under the Credit Agreement and the other Credit Documents or otherwise at law or in equity.
 
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Forbearance Agreement

 

 
THIS FORBEARANCE AGREEMENT (the "Forbearance Agreement") is made and dated as of ______ by and among the Banks currently party to the Credit Agreement described in Recital A below; ______, acting in its capacity as the Agent for the Banks; and ______, a[n] ______ corporation (the "Borrower").
 
Recitals
 
   A.   Loans from Banks to Borrower.  [banks party to credit agreement] (the "Banks") and Borrower are parties to the Credit Agreement dated as of ______ (the "Credit Agreement").  Under the Credit Agreement, Banks have made available to Borrower loans and other financial accommodations (including an RLC and Letters of Credit, collectively, the "Loans") in the committed amount of $______.
 
   B.   Obligations Owing from Borrower to Banks.  Computed as of ______, Borrower is indebted as follows to Banks:  (1) in the amount of $______ for unpaid principal; (2) in the amount of $______ in interest accrued at the nondefault rate (exclusive of any adjustment in the interest rates owed by Borrower under Section 6.1 below); and (3) in additional amounts for accrued and accruing interest, recoverable costs (including reasonable attorneys' fees), certain indemnities, and other expenses.
 
   C.   Collateral Held by Banks for Satisfaction of Obligations Owing from Borrower.  As security for satisfaction of the Obligations owing from Borrower, Banks hold valid and perfected, first and prior liens in (among other things) the Collateral described in the Security Agreements executed by Borrower in conjunction with the Credit Agreement.  The lien and security interests held by the Banks are evidenced by (among other things) the Security Documents and all other related Credit Documents executed and delivered by Borrower in connection with the Credit Agreement.
 
   D.   No Defenses.  Borrower has no defenses, offsets, counterclaims, or adverse claims of any kind or amount with respect to the Obligations.  In addition, Borrower has no defenses, offsets, counterclaims, or adverse claims of any kind with respect to the Collateral interests held by Banks as security for satisfaction of the Obligations.
 
   E.   Identified Defaults.  As identified on Exhibit "A" to this Forbearance Agreement, Borrower is in default of certain of the financial covenants contained in the Credit Agreement (the "Identified Defaults").
 
   F.   Request for Certain Forbearance and Loan Modifications.  Borrower has requested that, notwithstanding the existence of the Identified Defaults, Agent and the Banks forbear from exercising their rights and remedies with respect to the Identified Defaults through ______, or, if extended pursuant to the terms of this Forbearance Agreement, through ______.  In addition, Borrower has requested that Banks modify certain terms and conditions of the Credit Documents.  Although Banks are under no obligation to do so, Banks are willing to provide Borrower with limited forbearance, and Banks are willing to provide limited modification of the Credit Documents in the form of permanent amendments to the Credit Agreement in certain respects as set forth more particularly herein upon the terms and conditions set forth herein.  The forbearance is being provided by Banks to allow Borrower to secure replacement financing to satisfy indefeasibly the entire amount of the Obligations owing to Banks under the Credit Documents.
 
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
 
Provisions
 
1.   Accuracy of Recitals
 
Borrower acknowledges that the Recitals set forth above are true, accurate and correct.  The Recitals are incorporated into these Provisions without any difference or distinction between the two (2) segments of this Forbearance Agreement.
 
2.   Capitalized Terms
 
Unless otherwise indicated, all capitalized terms used in this Forbearance Agreement will correspond to the defined terms used in the Credit Agreement.
 
3.   Reaffirmation of Loans
 
Except as modified by this Forbearance Agreement, Borrower reaffirms all of its Obligations under the Credit Documents.
 
4.   Forbearance
 
Provided that Borrower satisfies all of the conditions set forth in paragraph 5 below, Banks hereby agree to forbear from exercising their rights and remedies with respect to the Identified Defaults from the effective date of the Forbearance Agreement through ______, unless extended further through ______ (the "Forbearance Period") by the payment by Borrower of the Extension Fee (defined below) and by the further modification of the Credit Agreement to provide for an additional 100 basis points increase in the nondefault interest rate and in the Default Rate.  In addition, the forbearance provided by Banks to Borrower is limited as follows:
 
4.1   Forbearance Limited to Identified Defaults
 
Banks' forbearance is limited solely to the suspended exercise of their respective rights and remedies arising under the Credit Documents as a result of the Identified Defaults, and Banks shall not be deemed to have suspended or waived any rights or remedies they may have with respect to any other existing breach, default or Event of Default under the Credit Documents, any new breach, default or Event of Default occurring thereunder during the Forbearance Period, or any breach of this Forbearance Agreement.
 
 
4.2   No New Events of Default
 
During the Forbearance Period, there shall occur no new Event of Default or an event which, with the passage of time or the giving of notice or both, would constitute an Event of Default under any one or more of the Credit Documents or this Forbearance Agreement, nor shall there be a breach or failure of any warranty, representation or covenant as described in this Forbearance Agreement.
 
4.3   Agreement in the Nature of Forbearance Only
 
Borrower hereby acknowledges that Banks' obligations under this Forbearance Agreement are in the nature of a conditional forbearance only, and that Banks have made no agreement or commitment to provide additional forbearance, to modify further or to extend the Credit Documents beyond the Forbearance Period.  Borrower also acknowledges that the Identified Defaults are not cured as a result of this Forbearance Agreement.
 
4.4   Termination of the Forbearance Period
 
The Forbearance Period shall end on the first to occur of the following:
 
(a)   ______, unless the Forbearance Period is extended through ______ as provided above.
 
(b)   A breach by Borrower of any of the covenants, representations and/or warranties set forth in this Forbearance Agreement.
 
(c)   The occurrence of any new Event of Default under any of the Credit Documents, or the occurrence of any event which, with the passage of time or giving of notice or both, would constitute an Event of Default thereunder.
 
(d)   Any bankruptcy petition is filed by or against Borrower.
 
(e)   Borrower makes any assignment for the benefit of its creditors, or a receiver is appointed for Borrower's business.
 
4.5   Exercise of Rights and Remedies Upon Termination of Forbearance Period
 
Upon termination of the Forbearance Period, Banks are free to exercise all of their rights and remedies under the Credit Documents, including but not limited to, the rights and remedies available to the Banks as a result of the Identified Defaults.
 
5.   Conditions to Forbearance
 
In addition to all other conditions set forth in Section 4 above, the forbearance provided by Banks under this Forbearance Agreement is strictly conditioned upon satisfaction by Borrower of the following:
 
5.1   No New Defaults
 
During the Forbearance Period, there will occur no new event which would allow Banks with or without notice to accelerate Obligations, to discontinue extending credit to Borrower under applicable Credit Documents, or to exercise any rights or remedies against any collateral for Obligations owed to any Bank or an event which, with the passage of time or the giving of notice or both, would constitute an Event of Default under any one or more of the Credit Documents, or a default occurs under the Forbearance Agreement (collectively, an "Incipient Default"), and there will be no breach or failure of any warranty, representation or covenant contained in this Forbearance Agreement.
 
5.2   Forbearance from Other Lenders
 
During the Forbearance Period, no other lender, creditor, or lessor will enforce its rights or remedies in relation to any default committed by Borrower under any loan agreement, lease agreement, security agreement, or other financial agreement.  In addition, and consistent in scope and time with the forbearance provided by the Banks, Borrower will obtain and maintain at least through the Forbearance Period forbearance for defaults of obligations owing to its other major lenders (the "Other Forbearance Agreements"), including direct lenders and conduit lenders that provide financing for Borrower and its Subsidiaries and Affiliates.  Copies of the Other Forbearance Agreements will be delivered to the Banks.
 
5.3   Delivery of Outstanding Items
 
By the time of execution of the Forbearance Agreement, and except for the delivery of certain stock certificates identified on Exhibit "A", Borrower will have delivered to Banks any outstanding property or documents relating to the Collateral and Obligations presently covered by the Credit Agreement, including, but not limited to, the delivery of Stock pledged as security for repayment of the Obligations.
 
5.4   Delivery of Consents
 
As evidenced by its signature below, any Guarantor which has guaranteed repayment of the Obligations expressly consents to the terms and conditions of this Forbearance Agreement, and confirms that its guarantee remains in full force and effect.  Likewise, Borrower will deliver to Banks the consent to the Forbearance Agreement by any holder of Subordinated Debt and by any party to any inter-creditor agreement with any of the Banks.
 
5.5   Delivery of Financing Term Sheets
 
By ______, Borrower will deliver to Banks signed term sheets or similar evidence to confirm that Borrower is pursuing from a lending source (or sources) financing in an amount sufficient to pay by ______ the entire amount of the outstanding Obligations (or such other amount of the Obligations acceptable to Banks in their sole and absolute discretion).  In this regard, Borrower will provide Banks by ______ copies of the term sheets or such other documents which reflect the terms, conditions, and amount of the financing sought by Borrower.
5.6   Pursuit of Certain Sales and Financings
 
Upon execution of the Forbearance Agreement, Borrower will seek financing or sales of certain of its domestic and Foreign Affiliates and assets.  Each of the Banks will have the right to approve the financing and sales of Borrower's domestic and foreign Affiliates and assets.  In the event of an Incipient Default, Borrower will not have the right to sell or refinance its domestic or Foreign Affiliates or assets.  Borrower will deliver to the Banks ______% of the net proceeds of any asset sales, new financing, equity sales, or equity infusions obtained by Borrower (other than the cash infusion referred to in Section 5.9 below), and such proceeds will be used to pay down permanently the Obligations owing to the Banks.
 
5.7   Full Cooperation with Consultants
 
During the Forbearance Period, Borrower will cooperate fully with representatives of ______, consultants engaged by Banks to assess and address matters germane to Borrower's performance under the Credit Documents.  Without limiting the generality of the foregoing, Borrower acknowledges and agrees that ______ will do the following during the Forbearance Period:  (a) assist in the preparation, evaluation and revisions of the Borrower's business plans, cash flow forecasts (including a 13week cash flow forecast) and financial projections, test the Borrower's critical assumptions, identify opportunities for improvement in the planning process and, as appropriate, assist management in the implementation and control of such programs; (b) assist in projecting and managing the Borrower's cash position and trade credit on an ongoing basis and in preparing such projections, reports, budgets, and analyses as may be reasonably required by the Borrower's lenders or investors; and (c) develop processes and procedures to ensure that the Banks' information needs are met in a timely manner according to this Forbearance and Credit Documents including borrowing base certificates and all financial reporting requirements.
 
5.8   Minimum Accounts and Inventory Levels
 
During the Forbearance Period, Borrower will maintain Eligible Accounts Receivable in an amount of at least $______ tested weekly, and Borrower will maintain a combined level of Eligible Accounts and Eligible Inventory in an amount of at least $______ tested monthly.
 
5.9   Cash Infusions
 
Within [spelled number of days] (______) business days of the execution of the Forbearance Agreement, Borrower will obtain from [names of shareholders] a cash infusion of at least $______ (the "Principal Shareholder[s'/'s] Cash Infusion") which may be used for working capital.  The Principal Shareholder[s'/'s] Cash Infusion may take the form of an equity infusion, or the Principal Shareholder[s'/'s] Cash Infusion may take the form of subordinated unsecured debt.  In all events, the Principal Shareholder[s'/'s] Cash Infusion will be subordinated in all respects to the Obligations owing to the Banks, and the Principal Shareholder[s'/'s] Cash Infusion may not be repaid by Borrower unless and until all of the Obligations owing to the Banks are repaid indefeasibly and in full.
 
 
5.10   Additional Guaranties
 
As a condition precedent to the Forbearance Agreement, each of [names of shareholders] shall execute and deliver to the Agent a credit guaranty of the Obligations in form and substance satisfactory to the Agent and the Banks (the "Additional Guaranties"), which Additional Guaranties shall provide for joint and several liability of [names of shareholders] in the amount, collectively, of $______.  From and after the effective date of this Forbearance Agreement, as used in the Credit Agreement and the other Credit Documents:  (a) the term "Subsidiary Guaranty" shall be deemed to include each of the Additional Guaranties, and (b) the terms "Subsidiary Guarantor" and "Loan Parties" shall be deemed to include [names of shareholders].
 
5.11   Account Control Agreements
 
No later than ______, the Borrower shall execute and deliver, and shall cause each financial institution with which the Borrower maintains deposit accounts in the United States (including, without limitation, demand deposits, time deposits and, savings accounts) to execute and deliver, to the Agent a deposit account control agreement in form and substance acceptable to the Agent and the Banks (the "Account Control Agreements").  The Borrower hereby represents and warrants to the Agent and the Banks that Schedule ______ hereto sets for an accurate and complete list of all such deposit accounts at and as of the date hereof and the Borrower covenants and agrees that it will not open any additional deposit accounts with any financial institution other than those listed on Schedule ______ without at least 30 days prior written notice to the Agent, and that it will, concurrently with the opening of such account, execute and deliver, and will cause such financial institution to execute and deliver, an Account Control Agreement relating to all deposit accounts of the Borrower maintained with such financial institution.
 
6.   Modifications
 
The Credit Documents are hereby modified and amended as described below.  In the event of any conflict between the terms of the Credit Documents and the terms of this Forbearance Agreement, this Forbearance Agreement shall control.
 
6.1   Increase in Certain Interest Rates
 
Effective as of ______, the nondefault interest rate on the RLC is Prime Rate plus ______% per annum, the Default Rate on the RLC is Prime Rate plus ______% per annum, and all interest and related charges are based on the Prime Rate and not on any LIBOR Based Rate.  In the event that the Forbearance Period is extended beyond ______, then, effective as of ______, the nondefault interest rate on the RLC is Prime Rate plus ______% per annum, the Default Rate on the RLC is Prime Rate plus ______% per annum.
 
6.2   Elimination of RLC Borrowing Base Exclusion
 
The RLC Borrowing Base Exclusion is eliminated.
 
 
6.3   Reduction of RLC Commitment
 
The RLC Commitment is limited to the lowest amount of Obligations owing from Borrower to Banks during the Forbearance Period.
 
6.4   Liquidation of Marketable Securities
 
Banks may immediately liquidate the approximately $______ of Marketable Securities in the possession of ______ as Agent, and the net proceeds of the Marketable Securities will be applied to reduce permanently the Obligations owing from Borrower to Banks.
 
6.5   No New Advances
 
No new advances will be made under the RLC.  During the Forbearance Period, Borrower's cash requirements will be satisfied out of collections of Accounts, the Principal Shareholder[s'/'s] Cash Infusion, and the portion of proceeds made available to Borrower under this Forbearance Agreement from the approved sale or financing of domestic or Foreign Affiliates or assets.
 
6.6   Sequestration of Excess Cash Flow
 
Upon the execution of the Forbearance Agreement, Borrower will establish and maintain at ______ as Agent for the Banks a sequestered cash collateral account (the "Sequestered Account").  ______, as Agent for Banks, is hereby granted a security interest in the Sequestered Account. ______, as Agent for Banks, will have sole and exclusive dominion and control over the Sequestered Account, including, but not limited to, the sole and exclusive right to withdraw funds from the Sequestered Account.  Beginning with the week of ______, and at the end of each week during the Forbearance Period which corresponds to a payroll period for Borrower, and after reserving for a rolling cash reserve of $______, Borrower will deposit into the Sequestered Account ______% of all cash actually collected in excess of cash actually disbursed.  In addition, Borrower is limited to payment of the expenses (in kind and in amount) listed on the Cash Flow Forecast attached as Exhibit "C", along with the payment of the Obligations, the Forbearance Fee, the Extension Fee, and the Reimbursable Costs as set forth herein.  From time to time, Bank may apply the funds in the Sequestered Account to reduce permanently the amount of the Obligations owing from Borrower.
 
6.7   Capital Expenditures
 
From ______, through the end of the Forbearance Period, and unless otherwise agreed to in writing by Banks, Borrower will not incur any liability or expend cash for capital expenditures over and above the $______ in capital expenditures incurred and to be paid during the ______.
 
6.8   Additional Collateral
 
As additional security for satisfaction of the Obligations, Borrower hereby grants to Banks Liens and security interests in all assets and Stock owned by Borrower which do not currently serve as Collateral (including, but not limited to, all equipment and intellectual property owned by Borrower), as well as Liens and security interests in all of the assets and Stock of each of Borrower's Subsidiaries and Affiliates, including the Foreign Affiliates which were not originally parties to the Credit Agreement (collectively, the "Additional Collateral").  In this regard:  (a) upon execution of the Forbearance Agreement:  (1) Banks are hereby granted a Lien and security interest on all equipment in the schedule delivered to Banks on ______ by Borrower, (2) and Banks are hereby granted a Lien and security interest on intellectual property (including, but not limited to, all patents, patent applications, trademarks, trademark applications, copyrights, and copyright applications) owned by the Borrower; and (b) effective as of ______, Banks will receive (and are hereby granted) Liens on the balance of the Additional Collateral.  In addition, by ______, Borrower will obtain credit insurance (the "Credit Insurance") for the accounts receivable pledged by ______.  The Credit Insurance will name as an additional insured ______ as Agent for the Banks, and the Credit Insurance will be in form and substance reasonably satisfactory to the Banks.  Borrower and its Affiliates and Subsidiaries will execute such security agreements, financing statements, and other documents reasonably requested by Banks to cause the Obligations owing to Banks to be secured by valid and enforceable first priority Liens and security interests in the Additional Collateral.  In addition, Banks are granted the same rights and remedies with respect to the Additional Collateral as Banks were granted with respect to the Collateral under the Credit Documents.
 
6.9   Financial Information
 
In addition to any reports or financial information required under the Credit Documents, Borrower will furnish to each of the Banks on a monthly basis the following covering the months of ______ and each succeeding month during the Forbearance Period:
 
(a)   Borrower prepared consolidating and consolidated financial statements broken down by divisions of Borrower (balance sheet and income and expense statement) due within 15 business days of each month end.
 
(b)   An RLC Borrowing Base Certificate every month due within 16 business days of each month end.
 
(c)   Compliance Certificate due within 16 business days of each month end.
 
(d)   Weekly Accounts Receivable and Payable Agings (broken down by divisions of Borrowers) due within 2 business days of each week's end.
 
(e)   Weekly domestic sales reports (broken down by divisions of Borrower) and monthly consolidated sales reports due within 3 business days of each week's or month's end.
 
(f)   Inventory listings (broken down by divisions of Borrower) due for domestic assets and for Foreign assets within 16 business days of each month end; and, with respect to Inventory, listings will be broken down by location and Borrower will specify whether Inventory located at leased locations is subject to landlord lien waivers.
 
(g)   Rolling 13 Week Cash Flow Reports (in summary form consistent with the Cash Flow Report attached as Exhibit "C") due within 2 business days of each week end.
 
(h)   Backlog reports due within 20 days of each month end.
 
(i)   On ______, Borrower will deliver to Banks a statement reflecting Borrower's compliance with the financial covenants under the Credit Agreement for the quarter ending on ______.
 
(j)   Without limiting any other rights of Banks under the Credit Documents, during the Forbearance Period, and upon 48 hours' telephonic or written notice from any of the Banks, Borrower will provide Banks and their consultants with access to the books, records, and property of Borrower.
 
6.10   Negative Covenants
 
During the term of the Forbearance Period:
 
(a)   Other than trade credit incurred in the ordinary course of business, and except as otherwise provided in this Forbearance Agreement, Borrower will not incur any additional debt in excess of the Obligations; provided, however that Borrower may incur debt from Affiliates, Subsidiaries, or shareholders ("Affiliate Debt") so long as:  (a) the Affiliate Debt is on terms acceptable to Banks; (b) the Affiliate Debt is subordinated in priority and payment to the Obligations; and (c) no payments are made by Borrower with respect to the Affiliate Debt unless and until all of the Obligations are paid in full and the RLC Commitment is terminated.  In addition, Borrower will not make any capital contributions, loans, or other advances to any of its other Subsidiaries or Affiliates outside of the ordinary course of business.
 
(b)   Borrower will not make any payments of any kind (including principal, interest, or other amounts owed) on any existing or future loans from shareholders.
 
(c)   Except for Liens arising under the Credit Documents, and except for purchase money liens or security interests agreed to in writing by Banks for newly acquired or leased equipment, Borrower will not allow any new liens to be secured by property which is presently owned or hereafter acquired by Borrower or any of its Subsidiaries or Affiliates.
 
(d)   Borrower will not enter into any acquisitions without the prior approval of Banks.
 
(e)   Borrower will not declare or pay any dividends, Borrower will not pay any bonuses, and Borrower will not repurchase any of its stock.
 
6.11   Limitation on Borrowing Base Default
 
During the Forbearance Period, the failure of the Borrower to maintain a certain level of assets in its Borrowing Base will not constitute an Incipient Default so long as Borrower complies with the terms and conditions of Section 5.8 above.
 
 
7.   Conditions Precedent
 
Before this Forbearance Agreement becomes effective and Banks become obligated under it, and in addition to any other conditions stated in this Forbearance Agreement, all of the following conditions shall have been satisfied at Borrower's sole cost and expense in a manner acceptable to Banks:
 
7.1   Receipt of Documents
 
Banks will have received fully executed originals of this Forbearance Agreement, the Additional Guarantees and any other documents that Banks may require or request in accordance with this Forbearance Agreement and the Credit Documents, all in such form as Banks may require in their reasonable discretion.  Without limiting the generality of the foregoing, Borrower acknowledges and agrees that it shall be obligated to deliver to the Agent, duly executed by all parties thereto as applicable and in form and substance satisfactory to the Agent, the Banks and their respective counsel each of the following:  (a) such corporate resolutions, incumbency certificates, trust certifications and other authorizing documentation as the Agent may request; (b) an opinion of counsel to the Borrower, which counsel shall be satisfactory to the Agent, covering, as to the Borrower only, the following matters:  ______
 
7.2   Reimbursement of Banks' Costs and Expenses
 
Banks will have received reimbursement, in immediately available funds, of all reasonable costs and expenses incurred by Banks in connection with this Forbearance Agreement, including charges for legal fees and expenses of Banks' counsel ("Reimbursable Costs").  Reimbursable Costs will include the allocated costs for services for each Lender's outside counsel and inhouse staffs, such as legal and appraisal, and Reimbursable Costs will be paid upon the execution of this Forbearance Agreement and thereafter as provided below.  Upon execution of this Agreement, Borrower will pay Banks their current Reimbursable Costs in the aggregate amount of $______, payable as follows:  (a) $______ to ______ for services rendered through ______ as counsel for the Banks as a group; (b) $______ to ______, for services rendered through ______ as financial consultants for the Banks; and (c) ______  Thereafter, Borrower will pay all additional Reimbursable Costs incurred by Banks during the course of the Forbearance Period within seven (7) business days of delivery of any invoice for payment of Reimbursable Costs.
 
7.3   Payment of Forbearance Fee and Past Due Interest
 
Banks will have received from Borrower payment of the Forbearance Fee provided in paragraph 10 below, along with any past due interest owing with respect to the Obligations, including, but not limited to interest owing as a result of Section 6.1 below.
 
8.   Borrower's Representations and Warranties
 
Borrower represents and warrants to Banks as follows:
 
 
8.1   Accuracy of Representations in Forbearance Agreement and Credit Documents
 
All representations and warranties made and given by Borrower in this Forbearance Agreement and in the Credit Documents are accurate and correct.
 
8.2   No Default
 
Other than the Identified Defaults, no Event of Default has occurred and is continuing under the Credit Documents, and no event has occurred and is continuing which, with notice or the passage of time or both, would be an Event of Default.
 
8.3   Property
 
To the extent applicable, Borrower lawfully possesses and holds a 100% ownership interest in all of the Collateral for the Obligations.  Borrower owns all of the Collateral for the Obligations free and clear of any defects, reservations of title and conditional sales contracts, and free and clear of any Liens and security interests other than the Liens and security interests in favor of Banks.  There is no financing statement affecting any Collateral for the Obligations on file in any public office except for financing statements in favor of Banks.
 
8.4   Borrowing Entity
 
Each Borrower entity is a corporation which is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation.  There have been no changes in the organization, composition, ownership, structure or formation documents of Borrower since the inception of the Obligations.  In each state and country in which Borrower does business, it is properly licensed, in good standing, and, where required, in compliance with fictitious name statutes.
 
8.5   Authorization
 
This Forbearance Agreement, and any instrument or agreement required hereunder, are within Borrower's powers, have been duly authorized, and do not conflict with any of its organizational papers.
 
8.6   Enforceable Credit Documents/No Conflicts
 
The Credit Documents and this Forbearance Agreement, are legal, valid and binding agreements of Borrower, enforceable in accordance with their respective terms, and any instrument or agreement required hereunder or thereunder, when executed and delivered, is (or will be) similarly legal, valid, binding and enforceable.  This Forbearance Agreement does not conflict with any law, agreement, or obligation by which Borrower is bound.
 
 
 
 
8.7   Financial Information
 
All financial and other information (including, but not limited to the Cash Flow Reports) that has been or will be supplied to Banks is (a) sufficiently complete to give Banks accurate knowledge of Borrower's financial condition; (b) in form and content required by Banks; and (c) in compliance with all government regulations that apply.
 
9.   Borrower Acknowledgments
 
Borrower hereby acknowledges and agrees that:
 
9.1   No Breach By Banks
 
Each of the Banks (including all of its predecessors) has not breached any duty to Borrower in connection with the Obligations or the Credit Documents, and each Bank (including all of its predecessors) has fully performed all obligations it may have had or now has to Borrower.
 
9.2   Interest, Fees, and Other Charges
 
All interest, fees (including the Forbearance Fee under paragraph 10 below) or other charges (including the Reimbursable Costs under paragraph 7.2 above) imposed, accrued, or collected by Banks (including all their predecessors) under the Credit Documents or this Forbearance Agreement, and the method of computing the interest, fees, or other charges, were and are reasonable, proper, and agreed to by Borrower and were properly computed and collected.
 
9.3   No Waiver
 
By entering into this Forbearance Agreement, Banks do not waive any existing defaults (including the Identified Defaults) or any defaults hereafter occurring, and Banks do not become obligated to waive any condition or obligation in any agreement between or among any of the parties hereto.
 
9.4   No Future Obligations
 
Banks have no obligation to make any additional loan or extension of credit to or for the benefit of Borrower, and Banks have no obligation to provide additional forbearance or to extend further accommodations to Borrowers.
 
9.5   No Third Party Beneficiaries
 
This Forbearance Agreement is not intended for, and shall not be construed to be for, the benefit of any person not a signatory hereto.
 
9.6   Loan Balances
 
The outstanding balances owing on the Obligations, as described in this Forbearance Agreement, are true and correct.
9.7   Fair Consideration
 
All payments made and Liens granted by Borrower to Banks under the Credit Documents and this Forbearance Agreement are for fair consideration and reasonably equivalent value.
 
9.8   Notice of Identified Defaults
 
Borrower has received or waives all notice required from Banks under the Credit Documents with respect to the Identified Defaults; and, subject to the terms and conditions of this Forbearance Agreement, Banks presently are free to exercise all of their rights and remedies under the Credit Agreement as a result of the Identified Defaults committed by Borrower.
 
10.   Forbearance and Extension Fees
 
In consideration of the forbearance provided by Banks, Borrower will pay a fee of $______ (the "Forbearance Fee") which will be divided pro rata among the Banks in accordance with their respective amounts of the outstanding principal amount of the Obligations.  The Forbearance Fee is earned and will be paid upon the execution of this Forbearance Agreement.  In the event that Borrower wishes to extend the Forbearance Period beyond ______ and until ______, Borrower will pay an extension fee of $______ (the "Extension Fee") to be divided pro rata among the Banks in accordance with their respective amounts of the outstanding principal amount of the Obligations.  The Extension Fee will be paid in either two (2) or three (3) installments as follows:  (a) 20% of the Extension Fee will be paid on ______; (b) 30% of the Extension Fee will be paid on ______; and (c) in the event that Borrower delivers to Banks by ______ a binding commitment (the "Financing Commitment") reasonably acceptable to Banks for financing in amount sufficient to satisfy the Obligations in full by ______, the balance of the Extension Fee will be paid on ______.  In the event that the Financing Commitment is not delivered in a timely manner to Banks, then the balance of the Extension Fee will be payable on ______.  In the event that the Obligations are satisfied indefeasibly and in full prior to ______, the entire Extension Fee will be waived.  In the event that the Obligations are satisfied indefeasibly and in full after ______, but prior to ______, then 50% of the Extension Fee will be waived.  The Extension Fee may be paid from funds on deposit in the Sequestered Account.
 
11.   Release of Banks
 
In consideration of the agreements of Banks set forth in this Forbearance Agreement, Borrower and all of its respective heirs, personal representatives, predecessors, successors and assigns (individually and collectively, the "Releasors"), hereby fully release, remise, and forever discharge Banks, the parents of Banks and all other affiliates and predecessors of Banks, and all past and present officers, directors, agents, employees, servants, partners, shareholders, attorneys and managers of Banks, for, from, and against any and all claims, counterclaims, liens, demands, causes of action, controversies, offsets, obligations, losses, damages and liabilities of every kind and character whatsoever, including, without limitation, any action, omission, misrepresentation or other basis of liability founded either in tort or contract and the duties arising thereunder, that the Releasors, or any one of more of them, has had in the past, or now has, whether known or unknown, whether asserted or unasserted, by reason of any matter, cause or thing set forth in, relating to or arising out of, of in any way connected with or resulting from, the Loans, the Obligations, the Credit Documents, or this Forbearance Agreement.
 
12.   No Prejudice; Reservation of Rights
 
Except for the limited forbearance specifically set forth herein, this Forbearance Agreement shall not prejudice any rights or remedies of Banks under the Credit Documents.  Except for the limited forbearance specifically set forth herein, each Bank reserves, without limitation, all of its rights against any borrower, indemnitor, guarantor, or endorser of any of the Credit Documents and any other party liable in any way for satisfaction of the Obligations or other losses suffered by Banks.
 
13.   No Impairment/Security
 
Except as otherwise specifically set forth herein, the Credit Documents remain unaffected by this Forbearance Agreement and all of the Credit Documents shall remain in full force and effect.  Borrower's payment and performance of Borrower's various Obligations to Banks under the Credit Documents, including all extensions, amendments, renewals or replacements thereof, continue to be and shall be secured by the Liens arising under the Credit Documents.  Nothing contained herein shall be deemed a waiver of any of the rights and remedies that any of the Banks may have against Borrower or any other party, or of any of Banks' rights and remedies arising out of the Credit Documents.
 
14.   Purpose and Effect of Banks' Approval
 
Banks' approval of any matter in connection with the Loans shall be for the sole purpose of protecting Banks' security, rights, and remedies under the Credit Documents.  No such approval shall result in a waiver of any default of Borrower.  In no event shall Banks' approval be a representation of any kind by Banks with regard to the matter being approved.
 
15.   Integration
 
The Credit Documents and this Forbearance Agreement and its exhibits:  (a) integrate all the terms and conditions mentioned in or incidental to the Credit Documents; (b) supersede all oral negotiations and prior and other writings with respect to their subject matter; and (c) are intended by the parties as the final expression of the agreement with respect to the terms and conditions set forth in those documents and as the complete and exclusive statement of the terms agreed to by the parties.  If there is any conflict between the terms, conditions and provisions of this Forbearance Agreement and the terms, conditions, or provisions of any other agreement or instrument, including any of the other Credit Documents, the terms, conditions and provisions of this Forbearance Agreement shall prevail.  No modification of this Forbearance Agreement or the Credit Documents shall be effective unless in writing and signed by the applicable parties to be bound thereby.
 
16.   Notices
 
All notices, reports, and other communications provided for herein (collectively, for purposes of this paragraph 16, "notices") will be in writing and will be delivered:  (a) in person; (b) by telecopier, telefax, or other facsimile communication; or (c) by overnight courier, postage prepaid, addressed as follows:  ______
 
17.   Counterparts
 
This Forbearance Agreement and any attached consents or exhibits requiring signatures may be executed in as many counterparts as necessary or convenient, and by the different parties on separate counterparts each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute but one and the same agreement.
 
18.   Invalidity
 
If any court of competent jurisdiction determines any provision of this Forbearance Agreement or any of the Credit Documents to be invalid, illegal or unenforceable, that portion shall be deemed severed from the rest, which shall remain in full force and effect as though the invalid, illegal or unenforceable portion had never been a part of the Forbearance Agreement or the Credit Documents.
 
19.   Governing Law, Venue, Forbearance of Jury Trial
 
This Forbearance Agreement shall be governed by and construed according to the laws of the State of ______.  Borrower hereby submits to jurisdiction and venue in ______ County, ______, and agrees that any and all pending or future litigation, arbitration, or bankruptcy proceedings relating to the Obligations shall be venued and maintained in ______ County, ______.  In the event of judicial proceedings relating to disputes arising under this Forbearance Agreement, Borrower agrees that all issues (including defenses, crossclaims and counterclaims) shall be resolved by a judge and not a jury; and, therefore, Borrower waives its rights to a jury trial which it otherwise would have had.
 
20.   Successors and Assigns
 
This Forbearance Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, Borrower may not transfer its rights under the Forbearance Agreement or the Credit Documents without the prior written consent of Banks.  Each of the Banks may transfer its rights under this Forbearance Agreement or the Credit Documents to any successor in interest.
 
21.   Construction
 
As used herein, the word "include(s)" means "include(s), without limitation", and the word "including" means "including, but not limited to".
 
22.   Default
 
The failure of Borrower to comply with any provision of this Forbearance Agreement or the failure of Borrower to comply with the terms and conditions of the Credit Documents (other than the Identified Defaults) shall constitute an Event of Default and shall entitle Banks to exercise any and all of their rights and remedies under the Credit Documents and this Forbearance Agreement.
 
23.   No Waiver
 
No failure to exercise, and no delay in exercising any right, power or remedy under any of the Credit Documents or under this Forbearance Agreement shall impair any right, power or remedy that Banks may have, nor shall such delay be construed to be a waiver of any of such rights, powers or remedies.  No waiver of any default or breach of Borrower shall be a waiver of any other default or breach or of any default or breach subsequently occurring.  Banks shall not be deemed to have waived any right, power, or remedy except in writing signed by an officer of Banks expressly stating that it is a waiver of same right, power or remedy.
 
24.   No Consent
 
Except as specifically provided in this Forbearance Agreement, no express or implied consent to any further forbearance or modifications involving any of the matters set forth in this Forbearance Agreement or otherwise shall be inferred or implied by Banks' execution of this Forbearance Agreement or any other action of Banks.  Banks' execution of this Forbearance Agreement shall not constitute a waiver, either express or implied, of the requirement that any further forbearance or modification of the Credit Documents shall require the express written approval of Banks.  Each of the Banks must provide any consent required from the Banks under this Forbearance Agreement.
 
25.   Cumulative Remedies
 
The rights and remedies of Banks under this Forbearance Agreement and the Credit Documents are cumulative and not exclusive of any rights or remedies that Banks would otherwise have, and may be pursued at any time and from time to time and in such order as Banks shall determine in their sole discretion.
 
26.   Mutual Agreement
 
The parties hereto agree that the terms and provisions of this Forbearance Agreement embody their mutual intent and that such terms and provisions are not to be construed more liberally in favor, or more strictly against, any party.  This Forbearance Agreement shall not be construed as if it had been prepared by one of the parties, but rather as if it had been prepared by all of the parties.
 
27.   Time is of the Essence
 
Time is of the essence of this Forbearance Agreement and the Credit Documents.
 
28.   Headings
 
Section headings are for reference only and shall not affect the interpretation or meaning of any provisions of this Forbearance Agreement.
 
29.   Further Performance
 
Borrower, whenever and as often as shall be requested by the Banks, shall execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered such further instruments and documents and to do any and all things as may be requested by Banks in order to carry out the intent and purpose of this Forbearance Agreement and the Credit Documents.
 
30.   Survival
 
The representations, warranties, acknowledgments, and agreements set forth herein shall survive the date of this Forbearance Agreement.
 
31.   Binding Effect
 
This Forbearance Agreement shall be binding upon and inure to the benefit of Banks, Borrower, and their respective successors and assigns.
 
32.   Sharing of Information
 
Borrower authorizes each Bank (a) to disclose to other Banks any and all information which is now or hereafter in the disclosing Bank's possession concerning Borrower (the "Information "), including, without limitation, all cash deposits, account balances, financial statements, and other reports and information regarding the businesses, financial condition, operations, and creditworthiness of Borrower; and (b) to discuss with other Banks any matters which such Bank considers relevant to this Forbearance Agreement.  Borrower consents to all prior disclosures of Information between or among Banks and to all prior discussions between or among Banks regarding matters which they considered relevant to this Forbearance Agreement.  Borrower waives:  (a) any and all claims that Borrower may have against Banks based upon any prior or future communication between or among Banks; and (b) any and all rights that Borrower may now or hereafter have to require the disclosure to it of (1) the nature or contents of communication between or among Banks, (2) the date or time of such communications, or (3) the identities of Banks sharing Information or participating in such communications.  Each Bank agrees to hold and preserve any confidential Information it may receive regarding Borrower which is not already public, except for disclosure:  (a) to its affiliates and to other Banks; (b) to its attorneys and other consultants engaged to render services in connection with the Obligations and deemed by Bank to need such information; (c) to its auditors in connection with any audit of its books and records; (d) to any person as requested pursuant to or as required by law, regulation or legal process; (e) to any person in connection with any legal proceeding in which a Bank or any of its affiliates, directors, officers, employees or agents is a defendant; (f) to any person who is already in possession of such Information; (g) to any purchaser or any prospective purchaser of an interest in the Obligations and to any assignee or prospective assignee of any Bank, provided that such person agrees in advance to be bound by the terms of this section; (h) to any person to whom it is permitted pursuant to this Forbearance Agreement to disclose such Information; and (i) in any proceeding involving the exercise of the rights and remedies of any of the Banks under the Credit Documents or under this Forbearance Agreement.
 
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
 
BORROWER:
 
[Sig Block Party 1]
 
[Notary Party 1]
 
AGENT:
 
By:     
   ______, ______ of [banks party to credit agreement]
 
 
STATE OF  ____________)
 
COUNTY OF __________)
 
This instrument was acknowledged before me on this     day of          ,       by ______.
 
 
   
Notary Public
 
My Commission Expires:    
   EXHIBIT A
IDENTIFIED DEFAULTS
 
1.   The Borrower has acknowledged that it is in default of certain of the financial covenants contained in the Credit Agreement as follows (the "Identified Defaults"):
 
(a)   An Event of Default exists under Paragraph ______ of the Credit Agreement on and as of ______ by virtue of the fact that the Borrower failed to be in compliance with the Fixed Charge Coverage Ratio set forth in Paragraph ______ of the Credit Agreement at and as of ______ (required Ratio ______; actual Ratio ______);
 
(b)   An Event of Default exists under Paragraph ______ of the Credit Agreement on and as of ______ by virtue of the fact that the Borrower failed to be in compliance with the Leverage Ratio set forth in Paragraph ______ of the Credit Agreement at and as of ______ (required Ratio ______; actual Ratio ______); and
 
(c)   ________________________________
 
2.   The Borrower has further acknowledged that the Identified Defaults have not been cured, waived or excused by the Agent and the Banks in any manner or to any extent and that there are no claims, demands, offsets or defenses, at law or in equity, that would defeat or diminish the present and unconditional right of the Agent and the Banks to enforce the rights, powers and remedies available to them under the Credit Agreement and the other Credit Documents or otherwise at law or in equity.
 

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