Legal Proposed Default Agreement

LEGAL PROPOSED DEFAULT AGREEMENT

This Proposed Default Agreement (the Agreement) is entered into as of by and between Creditor Name: with principal address: and Debtor Name: with principal address: .

RECITALS

WHEREAS, Creditor and Debtor are parties to a written instrument identified as dated (the Original Agreement), under which Debtor incurred an obligation to Creditor; and

WHEREAS, as of the Effective Date the outstanding principal balance owing under the Original Agreement is together with accrued interest, fees, and costs; and

WHEREAS, Creditor has provided notice of default to Debtor describing the alleged breaches as: ; and the parties wish to set forth a proposed agreement to resolve the default and to define required cures and remedies.

NOW, THEREFORE

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

1. DEFINITIONS

1.1 "Default Event" means any event or condition specified in the Original Agreement that, in the reasonable judgment of Creditor, constitutes a material breach, including but not limited to failure to pay principal or interest when due, breach of affirmative covenants, or insolvency.

1.2 "Cure Period" means the period of days from receipt of the Notice (as defined below) in which Debtor may cure the Default Event in accordance with Section 4.

2. ACKNOWLEDGMENT OF DEFAULT

2.1 Debtor acknowledges that a Default Event occurred on or about and that Creditor is entitled to pursue the remedies provided in the Original Agreement and under applicable law unless the Default Event is timely cured pursuant to this Agreement.

3. PROPOSED TERMS FOR CURE AND FORBEARANCE

3.1 Forbearance. Subject to strict compliance with the terms of this Agreement, Creditor agrees to forbear from exercising remedies for the period of the Cure Period specified above, provided that Debtor executes this Agreement and performs each of the obligations specified herein.

3.2 Payment and Interest. Debtor shall pay to Creditor an amount equal to past due amounts plus a proposed additional cure payment of and interest shall accrue thereafter at a rate of per annum on the outstanding balance until paid in full.

3.3 Late Charge. If Debtor fails to make any payment required by this Agreement within days after the due date, Debtor shall pay a late charge in the amount of or the maximum permitted by applicable law, whichever is less.

4. NOTICE; OPPORTUNITY TO CURE

4.1 Notice. Notice of the Default Event and of Creditor's election to propose this Agreement shall be given in writing (the Notice) to the addresses set forth below. Notice shall be effective upon delivery by hand, by nationally recognized overnight courier, by certified mail, return receipt requested, or by electronic transmission with confirmation when provided in accordance with Section 10.

4.2 Opportunity to Cure. Debtor shall have the Cure Period to effectuate a cure by paying all amounts due and by otherwise remedying the Default Event. If Debtor timely cures the Default Event in all material respects, Creditor's forbearance shall terminate and neither party shall have further remedies arising from the cured Default Event.

5. REMEDIES UPON FAILURE TO CURE

5.1 Acceleration. If Debtor fails to cure the Default Event within the Cure Period, Creditor shall have the right to declare the entire unpaid principal balance, accrued interest, and all other sums due and payable and to exercise any remedies available under the Original Agreement or at law or equity including, without limitation, foreclosure, repossession, setoff, levy, or other enforcement proceedings.

5.2 Costs. Debtor shall be liable for all costs and expenses incurred by Creditor in enforcing its rights under this Agreement or the Original Agreement, including reasonable attorneys' fees, court costs, and collection expenses.

6. REPRESENTATIONS AND WARRANTIES

6.1 Debtor represents and warrants that: (a) the execution and delivery of this Agreement and performance of its obligations hereunder have been duly authorized by all necessary action; (b) this Agreement constitutes a legal, valid and binding obligation enforceable in accordance with its terms; and (c) there are no defenses, offsets, or counterclaims that would bar Creditor's enforcement of the Original Agreement other than those expressly disclosed in writing to Creditor prior to the Effective Date.

6.2 Creditor represents and warrants that it has full authority to propose the terms herein on behalf of its successors and assigns and that no material proceedings are pending that would impair Creditor's rights under the Original Agreement, except as disclosed in writing to Debtor.

7. COVENANTS

7.1 During the Cure Period and for a period of 90 days following cure, Debtor shall comply with all material terms of the Original Agreement and shall provide Creditor with reasonable evidence of compliance upon request.

7.2 Debtor shall not create, incur or permit to exist any lien, encumbrance, or other charge upon its assets that would materially impair Creditor's security interest without Creditor's prior written consent.

8. INDEMNIFICATION

Debtor shall indemnify, defend and hold Creditor harmless from and against any and all liabilities, losses, claims, damages, costs and expenses (including reasonable attorneys' fees) arising from Debtor's breach of this Agreement, the Original Agreement, or from any misrepresentation made by Debtor herein.

9. AMENDMENT; WAIVER

This Agreement may be amended, modified or supplemented only by a written instrument executed by both parties. No waiver of any provision or breach shall be effective unless in writing and signed by the waiving party. A waiver of any default shall not constitute a waiver of any subsequent default.

10. NOTICES

All notices, requests, consents and other communications required or permitted under this Agreement shall be in writing and delivered to the addresses set forth in Section 4 or to such other address as a party may designate by notice to the other. Notice by email shall be effective only if an acknowledgement of receipt is received from the recipient.

11. GOVERNING LAW; VENUE

This Agreement shall be governed by and construed in accordance with the laws of the state of without regard to principles of conflicts of law. Any action or proceeding arising out of or relating to this Agreement shall be brought exclusively in the state or federal courts located in the county of .

12. ATTORNEYS' FEES AND COSTS

In the event of any action to enforce this Agreement, the prevailing party shall be entitled to recover its reasonable attorneys' fees and costs, in addition to any other relief granted by the court.

13. ENTIRE AGREEMENT; SEVERABILITY

This Agreement, together with the Original Agreement and any written schedules or exhibits referenced herein, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings and agreements. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect.

14. COUNTERPARTS

This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. Signatures delivered by electronic transmission shall be binding.

15. MISCELLANEOUS

The headings in this Agreement are for convenience of reference only and shall not affect the interpretation of this Agreement. The parties acknowledge that each has had the opportunity to seek independent legal advice prior to execution.

Sign Now