Postponement of Debt Agreement - Interest Payments Permitted

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Agreement where a creditor of a corporation agrees not to be repaid on a specific debt until another creditor is repaid.

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This agreement is to be used where a creditor (often a shareholder or investor) in a corporation agrees not to be repaid on a specific debt until a 2nd creditor is repaid. This type of agreement is usually made when the 2nd creditor refused to make a loan unless there is an assurance that it will be repaid first. This agreement does allow the periodic repayment of interest to be paid to the 1st creditor before all of the indebtedness to the 2nd creditor has been paid off.

This form includes special formatting features to assist you in completing the agreement.
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.
 
 
Postponement of Debt
(Interest Payments Permitted)

 

 

THIS AGREEMENT dated [Date (ie. July 31, 2002)]
B E T W E E N:
[NAME OF CREDITOR]
(the “Creditor”)
- and -
[NAME OF LENDER]
(the “Lender”)
WHEREAS:
(A)   [Name of Borrower] (the "Borrower") is indebted to the Creditor in the sum of [Amount of Debt owing by Borrower to Creditor (ie. $50,000.00)] (the "Debt");
(B)   In the negotiation of a loan of [Amount of Credit or Loan to be Advanced by Lender to Borrower (ie. $200,000.00)] (the "Loan") made or to be made by the Lender in favour of the Borrower, the Creditor agreed to postpone to the Lender the Debt; and
(C)   It is and was a condition of the making of the Loan that the Debt be so postponed.
NOW THIS AGREEMENT WITNESSES that in consideration of the Lender making the Loan or any part thereof to the Borrower and in consideration of the premises the Creditor agrees with the Lender as follows:
1.   Any claim of the Lender in respect of the Loan shall take precedence over and be fully paid in priority to the Debt, and repayment of the Debt is hereby expressly postponed in favour of the Lender.
2.   The Creditor, at the request of the Lender, shall postpone in favour of the Lender, all of its right, title and interest in any security in respect of the Debt postponed by this Agreement; and the Creditor will not, so long as the Borrower is indebted to the Lender in respect of the Loan, demand payment, either in whole or in part, of the Debt, nor pledge nor transfer to any person any of the rights of the Creditor in respect of the Debt.
3.   Notwithstanding anything contained in this Agreement to the contrary, so long as the Borrower is not in default under the terms of the Loan, interest on the Debt may be paid to the Creditor at a rate not exceeding [Maximum Rate of Interest Payable to Creditor under Debt (ie. 10% per annum)].
4.   The Lender may grant time, renewals, extensions, releases and discharges to, accept compositions from, and otherwise deal with the Borrower as the Lender may see fit without notice to the Creditor and without prejudice to, or in any way limiting or affecting the obligations and covenants of the Creditor under this Agreement.
5.   This Agreement shall extend to and be binding upon the parties hereto and their heirs, executors, administrators, successors and assigns.
IN WITNESS WHEREOF the parties have hereunto set their hands and seals or have affixed their corporate seals duly attested by the hand(s) of their proper officer(s) in that behalf, on the date first above written.
 
 
[NAME OF CREDITOR]
 
 
 
 
Per:
 
 
 
 
Name:   
Title:   
 
Number of Pages4
DimensionsDesigned for Letter Size (8.5" x 11")
EditableYes (.doc, .wpd and .rtf)
UsageUnlimited number of prints
Product number#28640
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.
 
 
Postponement of Debt
(Interest Payments Permitted)

 

 

THIS AGREEMENT dated [Date (ie. July 31, 2002)]
B E T W E E N:
[NAME OF CREDITOR]
(the “Creditor”)
- and -
[NAME OF LENDER]
(the “Lender”)
WHEREAS:
(A)   [Name of Borrower] (the "Borrower") is indebted to the Creditor in the sum of [Amount of Debt owing by Borrower to Creditor (ie. $50,000.00)] (the "Debt");
(B)   In the negotiation of a loan of [Amount of Credit or Loan to be Advanced by Lender to Borrower (ie. $200,000.00)] (the "Loan") made or to be made by the Lender in favour of the Borrower, the Creditor agreed to postpone to the Lender the Debt; and
(C)   It is and was a condition of the making of the Loan that the Debt be so postponed.
NOW THIS AGREEMENT WITNESSES that in consideration of the Lender making the Loan or any part thereof to the Borrower and in consideration of the premises the Creditor agrees with the Lender as follows:
1.   Any claim of the Lender in respect of the Loan shall take precedence over and be fully paid in priority to the Debt, and repayment of the Debt is hereby expressly postponed in favour of the Lender.
2.   The Creditor, at the request of the Lender, shall postpone in favour of the Lender, all of its right, title and interest in any security in respect of the Debt postponed by this Agreement; and the Creditor will not, so long as the Borrower is indebted to the Lender in respect of the Loan, demand payment, either in whole or in part, of the Debt, nor pledge nor transfer to any person any of the rights of the Creditor in respect of the Debt.
3.   Notwithstanding anything contained in this Agreement to the contrary, so long as the Borrower is not in default under the terms of the Loan, interest on the Debt may be paid to the Creditor at a rate not exceeding [Maximum Rate of Interest Payable to Creditor under Debt (ie. 10% per annum)].
4.   The Lender may grant time, renewals, extensions, releases and discharges to, accept compositions from, and otherwise deal with the Borrower as the Lender may see fit without notice to the Creditor and without prejudice to, or in any way limiting or affecting the obligations and covenants of the Creditor under this Agreement.
5.   This Agreement shall extend to and be binding upon the parties hereto and their heirs, executors, administrators, successors and assigns.
IN WITNESS WHEREOF the parties have hereunto set their hands and seals or have affixed their corporate seals duly attested by the hand(s) of their proper officer(s) in that behalf, on the date first above written.
 
 
[NAME OF CREDITOR]
 
 
 
 
Per:
 
 
 
 
Name:   
Title:   
 
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