Deferral Agreement: Definition, Terms, Example
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What is a Deferral Agreement?
A deferral agreement is a contract between a lender and company that sets the terms and conditions of an agreed-upon payment deferral. The contract terms include details about how much the payment is, when the new due date is, and what fees might apply for the deferral. The agreement is useful to give business owners more time to come up with a required payment without risking violating the terms of the agreement.
The deferral agreement offers an easy and convenient way for lenders and borrowers to come to an agreement surrounding modifying the terms of the original contract.
Common Sections in Deferral Agreements
Below is a list of common sections included in Deferral Agreements. These sections are linked to the below sample agreement for you to explore.
Deferral Agreement Sample
AMENDING AGREEMENT OF
AGREEMENT TO DEFER PAYMENT OF DEBT
This Agreement made effective the 1st day of July, 2015.
BETWEEN:
CMX GOLD & SILVER CORP., a corporation incorporated under the laws of the Province of Alberta and having its head office in Calgary, Alberta (the “Corporation”)
- and -
BRINKTON CORPORATION, a corporation incorporated under the laws of Alberta having an office in Calgary, Alberta; RANDAL SQUIRES, a resident of Novato, California; and GLEN ALSTON, a resident of Calgary, Alberta (the “Creditors”)
WHEREAS the Creditors and the Corporation entered into an Agreement to Defer Payment of Debt dated September 30, 2013 (the “Deferral Agreement”) wherein the Creditors agreed to the deferral until July 1, 2015 of payment of advances and fees for work for the Corporation of $282,176;
AND WHEREAS pursuant to the Deferral Agreement a total of $274,198 remained outstanding as at September 30, 2014, and the Creditors further agreed under an Amending Agreement dated September 30, 2014 to the deferral of payment until July 1, 2016;
AND WHEREAS pursuant to the Deferral Agreement and Amending Agreement additional interest and fees have accrued to July 30, 2015 on the Debt in the amount of $32,275 such that the total amount owed as of the date hereof by the Corporation to the Creditors is $306,473 (the “Current Debt”);
AND WHEREAS for consideration received, the Creditors have agreed to extend the payment date by the Corporation of the balance of the Current Debt by one year to July 1, 2017 in accordance with the terms of this Agreement;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), the parties agree as follows:
1.
Agreement to Defer Payment of Current Debt. Subject to the terms and conditions set forth in this Agreement and the Deferral Agreement, the Creditors hereby acknowledge and agree that the obligation of the Corporation to pay any outstanding balance of the Current Debt is deferred to July 1, 2017, and the Deferral Agreement is hereby amended to reflect the new payment date.
2.
Interest on Debt. The Corporation shall pay simple interest on the Current Debt, or any portion thereof outstanding, at the rate of six percent (6%) per annum from July 1, 2015 until payment in full.
3.
Representations, Warranties and Covenants of the Creditor. The Creditors agrees that the representations, warranties and covenants made by it in the Deferral Agreement remain in full force and effect, except as modified by this Agreement.
4.
Representations and Warranties of the Corporation. The Corporation agrees that the representations, warranties and covenants made by it in the Deferral Agreement remain in full force and effect, except as modified by this Agreement and the Corporation hereby specifically confirms its covenant to use its best efforts to raise additional funds to pay the Current Debt before July 1, 2017.
5.
Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable therein. The parties irrevocably attorn to the exclusive jurisdiction of the courts of the Province of Alberta.
6.
Entire Agreement. This Agreement and the Deferral Agreement represent the entire agreement of the parties hereto relating to the subject matter hereof, and there are no representations, covenants or other agreements relating to the subject matter hereof except as stated or referred to herein.
7.
Counterpart. This Agreement may be executed in one or more counterparts each of which so executed shall constitute an original and all of which together shall constitute one and the same agreement. The Corporation shall be entitled to rely on delivery of an electronic or facsimile executed copy of this Agreement, and acceptance by the Corporation of such electronic or facsimile copy shall be legally effective to create a valid and binding agreement between the Creditors and the Corporation in accordance with the terms hereof.
8.
Severability. The invalidity, illegality or unenforceability of any provision of this Agreement shall not affect the validity, legality or enforceability of any other provision hereof.
9.
Survival. The covenants, representations and warranties contained in this Agreement shall survive the closing of the transactions contemplated hereby, and shall be binding upon and enure to the benefit of the parties hereto and their respective heirs, executors, administrators, successors and permitted assigns.
- 2 -
(this is the signature page to an Amending Agreement made effective the 1st day of July, 2015)
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the date first written above.
CMX GOLD & SILVER CORP.
“Jan M. Alston”
Per:
Name: Jan Alston
Title: President
BRINKTON CORPORATION
“Lossie C. Alston”
Per:
Name: Lossie Alston
Title: President
RANDAL SQUIRES
“Randal Squires”
GLEN ALSTON
“Glen R. Alston”
- 3 -
Reference:
Security Exchange Commission - Edgar Database, EX1A-15 ADD EXHB 9 cmx_ex10z2.htm DEFERRAL AMENDING AGREEMENT, Viewed October 24, 2022, View Source on SEC.
Who Helps With Deferral Agreements?
Lawyers with backgrounds working on deferral agreements work with clients to help. Do you need help with a deferral agreement?
Post a project in ContractsCounsel's marketplace to get free bids from lawyers to draft, review, or negotiate deferral agreements. All lawyers are vetted by our team and peer reviewed by our customers for you to explore before hiring.
ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.
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