Advance Payment Agreement

ADVANCE PAYMENT AGREEMENT

This Advance Payment Agreement (the "Agreement") is made as of between Payor Name: of and Payee Name: of .

RECITALS

WHEREAS, Payee requires funds in advance to finance or secure performance of certain obligations described below; and

WHEREAS, Payor is willing to provide an advance of funds to Payee on the terms and conditions set forth in this Agreement; and

WHEREAS, the parties desire to set forth their respective rights and obligations regarding the advance, repayment, security and remedies.

NOW, THEREFORE

In consideration of the mutual covenants and promises herein contained, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. DEFINITIONS

1.1 "Advance" means the principal sum paid by Payor to Payee pursuant to Section 2.
1.2 "Maturity Date" means the date on which the Advance and all accrued obligations are due as set forth in Section 4.
1.3 Other capitalized terms used in this Agreement shall have the meanings set forth in the body of this Agreement.

2. ADVANCE

2.1 Advance Amount. Payor agrees to advance to Payee the principal sum of (the "Advance") on the terms set forth herein.

2.2 Purpose. The Advance shall be used by Payee for the following purpose:

3. DISBURSEMENT; CONDITIONS PRECEDENT

3.1 Disbursement. The Advance shall be disbursed by Payor to Payee by wire transfer or check to the account or address designated by Payee, subject to receipt of the documents and approvals set forth in Section 3.2.

3.2 Conditions Precedent. The obligation of Payor to disburse the Advance is subject to Payee's delivery of: (a) a duly executed notice of draw specifying the amount requested; (b) evidence of authority to accept the Advance; and (c) any security documents required under Section 6.

4. INTEREST; REPAYMENT

4.1 Interest Rate. The unpaid principal of the Advance shall bear interest at the rate of per annum, calculated on the basis of a 365-day year and actual days elapsed, unless otherwise agreed in writing.

4.2 Repayment. Payee shall repay the Advance in accordance with the following schedule: Principal repayment on or before with interim payments (if any) as follows:

4.3 Prepayment. Payee may prepay the Advance in whole or in part at any time without premium or penalty, provided that any prepayment shall be accompanied by payment of accrued interest on the amount prepaid through the prepayment date.

5. SECURITY

5.1 Secured Status. The Advance shall be secured: Check if secured

5.2 Collateral. If secured, Payee grants to Payor a security interest in the following collateral described below to secure repayment and performance:

6. REPRESENTATIONS AND WARRANTIES

6.1 Payee Representations. Payee represents and warrants to Payor that: (a) it is duly organized and validly existing under the laws of its jurisdiction of organization; (b) it has full power and authority to enter into and perform this Agreement; (c) the execution, delivery and performance of this Agreement do not violate any material agreement or law; and (d) the funds advanced will be used only for the purposes set forth in Section 2.2.

6.2 Payor Representations. Payor represents that it has the full right, power and authority to make the Advance and that the Advance does not violate any material agreement or law to which Payor is subject.

7. EVENTS OF DEFAULT; REMEDIES

7.1 Events of Default. Each of the following shall constitute an Event of Default: (a) failure by Payee to pay any principal or interest within five (5) business days of its due date; (b) default in the performance of any material covenant or obligation under this Agreement; (c) any representation or warranty made by a party in this Agreement proves to have been false or misleading when made; or (d) insolvency, bankruptcy or similar proceeding by or against a party.

7.2 Remedies. Upon the occurrence and continuation of an Event of Default, Payor may, at its election, declare the entire unpaid principal and accrued interest immediately due and payable and exercise any rights and remedies available at law or in equity, including foreclosure or enforcement of any security interest, and recovery of costs and expenses, including reasonable attorneys’ fees.

8. COVENANTS

8.1 Affirmative Covenants. Payee shall: (a) use the Advance only for the stated purpose; (b) maintain records and provide Payor with periodic statements upon request; and (c) comply with all material laws applicable to its business and operations.

8.2 Negative Covenants. Payee shall not, without Payor’s prior written consent, incur any liens, transfer material assets, or enter into any transaction that would impair the security for the Advance or materially adversely affect Payee’s ability to repay the Advance.

9. NOTICES

Notices to Payor:

Notices to Payee:

All notices required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally, by nationally recognized overnight courier, or three (3) business days after deposit in the United States mail, postage prepaid, addressed to the party at its address set forth above or such other address as either party may designate by written notice to the other.

10. MISCELLANEOUS

10.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state specified below without regard to conflict of laws principles.

Governing Law State:

10.2 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings and negotiations, whether written or oral.

10.3 Amendments; Waiver. No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by both parties. The failure of a party to exercise any right shall not operate as a waiver of such right.

10.4 Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall continue in full force and effect and the offending provision shall be reformed to the extent necessary to make it valid and enforceable.

10.5 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Electronic signatures shall be binding and deemed original signatures for all purposes.

11. EXECUTION

The parties have executed this Agreement as of the date first written above.

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