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This Payment Agreement Letter clearly sets forth the terms for the payment of money from a payor to a recipient. This letter is often used when a debtor is unable to meet the currently payment obligations under a loan and offers the lender a revised repayment plan. This document contains the material terms and conditions of the revised plan. The specific provisions related to the individual parties can be easily inserted into this letter to ensure a personalized result. This letter should be used by individuals or businesses that desire to avoid any confusion which may arise with the payment of money.
This Payment Agreement Letter clearly sets forth the terms for the payment of money from a payor to a recipient. This letter is often used when a debtor is unable to meet the currently payment obligations under a loan and offers the lender a revised repayment plan. This document contains the material terms and conditions of the revised plan. The specific provisions related to the individual parties can be easily inserted into this letter to ensure a personalized result. This letter should be used by individuals or businesses that desire to avoid any confusion which may arise with the payment of money. ___________________ [Instruction: insert date] To: ___________________ [Instruction: insert name of Payor] (“Payor”) ___________________ [Instruction: insert address of Payor] ___________________ From: ___________________ [Instruction: insert name of Recipient] (“Recipient”) ___________________ [Instruction: insert address of Recipient] ___________________ This letter serves to confirm our payment agreement whereby the parties shall agree as follows: 1. Payment. Subject to the terms and conditions stated herein, Payor shall pay to Recipient the sum of $_______________, in the principal amount of $_______________ and bearing _______________ percent interest per annum until maturity. [Comment: user should edit the payment scheme to reflect the agreement of the parties] 2. Prepayment. Payor may prepay the amount at any time before it becomes due. 3. Financial statements. On or before _______________ [Instruction: insert date], Payor shall furnish Recipient Payor's financial statement as of the date of this letter. Such statement shall be prepared by independent certified public accountants selected by Payor and satisfactory to Recipient in its sole discretion. If the financial statements are unsatisfactory to Recipient, Recipient, in its sole discretion, may cancel this agreement. 4. Financial condition. Until the money referred to herein, together with interest thereon, is paid in full, Payor shall maintain net current assets (meaning the excess of current assets over current liabilities, both as determined in accordance with generally accepted accounting principles) of not less than $_______________. [Comment: user may edit or remove this section in order to reflect the agreement of the parties] 5. Insurance. Payor shall maintain insurance with responsible companies in such amounts and against such risks as is customarily carried by owners of similar businesses and property. [Comment: this section anticipates that the Payor is a business. If this is not the case, then user should edit or remove this section] 6. Subordination of debentures. The principal amounts of any debenture bonds or debenture notes issued or to be issued by Payor, in default or not in default, shall at all times be subject and subordinate to the payment referred to herein and to the interest thereon. 7. Restrictions. Without Recipient's prior written approval, Payor shall not do any of the following: A. Incur any additional indebtedness for money in excess of $_______________, or incur any indebtedness which by its terms matures more than 12 months from the date of creation thereof. B. Sell or lease all or substantially all of its assets or enter into any merger or consolidation. C. ______________________________ [Instruction: insert any additional restrictions] 8. Default. If any of the following events occurs, all obligations hereunder, and all other indebtedness then owing by Payor to Recipient, shall become due on Recipient's demand without presentation, demand for payment, notice of dishonor, protest, or notice of protest of any kind, all of which Payor hereby expressly waives. A. Any default by Payor in the payment, when due, of any part of the principal of or interest on the note referred to herein. B. Any breach or failure of Payor to perform any term or condition of this agreement. C. Payor's insolvency or bankruptcy, the making by Payor of an assignment for the benefit of creditors, or Payor's consent to the appointment of a trustee or a receiver or other officer of a court or other tribunal. D. The appointment of a trustee or receiver or other officer of a court for Payor, or for a substantial part of its properties, without its consent, where no discharge is effected within 20 days. E. The institution of bankruptcy, reorganization, insolvency, or liquidation proceedings by or against Payor, and if against Payor where such proceeding is consented to by it or remains undismissed for 20 days. 9. Non-waiver. No delay or failure by Recipient to exercise any right under this letter, and no partial exercise of that right, shall constitute a waiver of that or any other right, unless otherwise expressly provided herein. 10. Headings. Headings in this letter are for convenience only and shall not be used to interpret or construe its provisions. 11. Governing law. This agreement shall be construed in accordance with and governed by the laws of the State of _______________. © Copyright 2011 Docstoc Inc. 3 12. Time of essence. Time is expressly declared to be the essence of this agreement. 13. Entire agreement. This instrument constitutes the entire agreement between Payor and Recipient. It may not be modified except in a writing signed by both parties. Sincerely, Recipient: _______________ by: _______________ its: _______________ Accepted and agreed: Payor: _______________ by: _______________ its: _______________ © Copyright 2011 Docstoc Inc. 4
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