Legal Set Off Agreement

LEGAL SET OFF AGREEMENT

This Legal Set Off Agreement (the "Agreement") is made and entered into as of by and between Party A: and Party B: .

Recitals

WHEREAS, Party A asserts certain claims, obligations, credits, or other amounts due from Party B arising out of transactions, contracts or other dealings between the parties as more particularly described in Schedule A attached hereto; and

WHEREAS, Party B holds certain obligations, credits, or amounts due from Party A that may be applied against Party A's claims in accordance with applicable law and the terms of this Agreement; and

WHEREAS, the parties desire to establish a binding contractual mechanism by which one party may set off mutual debts, claims and obligations against the other party in the manner and upon the conditions set forth herein.

NOW THEREFORE

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

1. Definitions

1.1 "Claims" means all debts, obligations, and liabilities (whether liquidated or unliquidated, matured or unmatured) asserted by a party against the other arising out of any contract, tort, statute or otherwise.

1.2 "Set Off" or "Set Off Rights" means the right of a party to reduce, extinguish or apply amounts otherwise payable to the other party by way of mutual offset or recoupment in accordance with this Agreement and applicable law.

1.3 "Net Amount" means the net monetary amount determined after applying allowable offsets, credits, counterclaims and adjustments in accordance with the procedures set forth in this Agreement.

2. Grant of Set Off Rights

2.1 Subject to the terms and conditions of this Agreement, each party hereby grants to the other party the right to effect a Set Off against amounts otherwise payable by such party to the other party by applying and reducing such amounts by the Net Amount of the claims set forth in Schedule A or otherwise properly asserted in accordance with this Agreement.

2.2 The exercise of Set Off Rights shall not be deemed a waiver of any other rights or remedies available at law or in equity, including the right to pursue collection, damages or injunctive relief.

3. Conditions to Exercise of Set Off

3.1 A party may exercise Set Off Rights only if: (a) the claim to be set off is due and payable or otherwise matured; (b) the claim is not subject to a bona fide dispute as to amount or validity; (c) no applicable law, contractual restriction, or third party agreement prohibits the Set Off; and (d) the party seeking Set Off has complied with the notice and documentation requirements set forth in Section 4 below.

4. Procedure; Notice; Calculation

4.1 A party intending to exercise a Set Off shall deliver written notice of intent to set off (a "Set Off Notice") to the other party specifying (i) the basis for the claim, (ii) the amount claimed, (iii) the supporting documentation and calculations, and (iv) the proposed effective date of set off, which shall be no fewer than days after delivery of the Set Off Notice, unless otherwise agreed in writing.

4.2 The receiving party shall have the right to dispute the asserted claim by delivering a written response within the notice period identifying in reasonable detail the grounds of dispute. If the parties cannot resolve the dispute within thirty (30) days, either party may pursue appropriate dispute resolution or legal remedies, and no Set Off shall be effective with respect to any portion of the claim that remains in bona fide dispute.

5. Schedule of Claims and Calculation

5.1 The parties shall use commercially reasonable efforts to reconcile the amounts set forth on Schedule A prior to any Set Off. Unless otherwise agreed, amounts shall be stated in United States dollars and rounded to the nearest cent.

6. Representations and Warranties

Each party represents and warrants to the other that: (a) it has full power and authority to enter into and perform this Agreement; (b) this Agreement constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms; and (c) the execution and performance of this Agreement will not violate any material contract, law or court order to which it is subject.

7. Indemnification

Each party shall indemnify, defend and hold harmless the other party from and against any and all claims, losses, liabilities, damages, costs and expenses (including reasonable attorneys' fees) arising out of or resulting from any breach of its representations, warranties or covenants under this Agreement or any improper exercise of Set Off Rights in violation of the terms of this Agreement.

8. Remedies; Enforcement

8.1 The rights and remedies provided by this Agreement are cumulative and in addition to any other rights or remedies available at law or in equity.

8.2 If a party improperly exercises a Set Off in violation of this Agreement, the non-breaching party shall be entitled to recover all damages, including consequential damages and reasonable attorneys' fees, and to seek injunctive relief if appropriate.

9. Notices

9.1 All notices, demands or communications required or permitted under this Agreement shall be in writing and shall be delivered personally, by certified mail (return receipt requested), overnight courier, or by internationally recognized courier service to the addresses set forth below or to such other address as a party may specify by notice in accordance with this Section.

10. Governing Law; Venue

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to conflict of laws principles. Each party irrevocably submits to the exclusive jurisdiction of the state and federal courts located in that state for resolution of disputes arising out of this Agreement.

11. Miscellaneous

11.1 Entire Agreement. This Agreement, including Schedule A, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements and understandings, oral or written, relating to such subject matter.

11.2 Amendments and Waiver. This Agreement may be amended, modified or supplemented only by a written instrument executed by authorized representatives of both parties. No failure or delay by either party in exercising any right or remedy shall operate as a waiver thereof.

11.3 Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

11.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Execution and delivery by electronic means (including facsimile or electronic signature) shall be effective as an original signature.

Execution

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date first written above.

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