Debtor-Friendly Payment Agreement Template

In this Agreement, unless the context otherwise requires, the capitalized terms set out in this Section shall have the meanings ascribed to them below.

"Business Day" means any day other than a Saturday, a Sunday or a day on which commercial banks in [city/jurisdiction] are authorized or required by law to remain closed.

"Cure Period" means the period of [number] calendar days commencing on the date on which a Default Notice is deemed received by the Debtor in accordance with this Agreement, within which the Debtor may remedy an Event of Default.

"Default Notice" means a written notice delivered by the Creditor to the Debtor pursuant to this Agreement, identifying the Event of Default alleged to have occurred and the action required to remedy it.

"Event of Default" means any of the events or circumstances specified as such in this Agreement.

"Grace Period" means the period of [number] calendar days immediately following a Due Date, during which an Instalment may be paid without the occurrence of an Event of Default.

"Due Date" means, in respect of each Instalment, the date specified for its payment in this Agreement, being the [day] day of each calendar month, or, if such day is not a Business Day, the next succeeding Business Day.

"Instalment" means each monthly payment of the Outstanding Balance in the amount specified in this Agreement, payable on a Due Date.

"Outstanding Balance" means, at any time, the Total Indebtedness less all amounts paid by the Debtor and received by the Creditor in reduction thereof in accordance with this Agreement.

"Total Indebtedness" means the aggregate principal amount of [amount in words and figures] [currency], acknowledged by the Debtor as owing to the Creditor as of the Effective Date.

"Payment Account" means the bank account of the Creditor designated in this Agreement or in any written notice given by the Creditor in accordance with this Agreement.

Headings are for convenience only and do not affect interpretation. References to Sections are to sections of this Agreement; words in the singular include the plural and vice versa; and the words "including" and "includes" shall be construed without limitation. References to a "day" mean a calendar day unless Business Days are specified.

The Debtor hereby irrevocably and unconditionally acknowledges and confirms that, as of the Effective Date, it is justly and lawfully indebted to the Creditor in the amount of the Total Indebtedness, and that such amount is due, owing and payable to the Creditor without set-off, counterclaim or deduction, subject only to the terms of this Agreement as to the time and manner of payment.

The Debtor acknowledges that the Total Indebtedness arises from [description of underlying transaction or documents] (the "Underlying Obligation") and that the amount thereof has been verified by the Debtor and is accurate and complete.

The Debtor expressly waives, to the fullest extent permitted by applicable law, any right to dispute the existence, validity, amount or enforceability of the Total Indebtedness, and any defense, claim of set-off or counterclaim that it may have had as of the Effective Date in relation thereto, whether known or unknown.

The Debtor acknowledges that this Agreement constitutes a binding acknowledgment of debt and may be relied upon by the Creditor as evidence of the Total Indebtedness in any proceeding, and the Debtor shall not contest the admissibility of this Agreement for such purpose.

The Parties agree that this Agreement does not constitute a novation, extinguishment or replacement of the Underlying Obligation, which shall continue in full force and effect as modified solely by the payment terms set forth herein.

The Debtor acknowledges that the Creditor's agreement to accept payment by Instalments is an accommodation granted at the Debtor's request, and that no right to any further extension, reduction or indulgence arises therefrom.

The Debtor shall repay the Total Indebtedness to the Creditor in [number] consecutive monthly Instalments, each in the amount of [amount] [currency], except for the final Instalment, which shall be in the amount of the then Outstanding Balance.

The first Instalment shall fall due on [date of first Instalment], and each subsequent Instalment shall fall due on the Due Date in each succeeding calendar month thereafter until the Outstanding Balance has been paid in full.

The final Instalment shall fall due not later than [final payment date] (the "Final Payment Date"), by which date the entire Outstanding Balance shall have been paid in full.

Time is of the essence with respect to the Debtor's payment obligations under this Section, subject to the Grace Period and the Debtor's rights under this Agreement.

The Debtor shall be responsible for initiating each payment so that cleared funds are received by the Creditor in the Payment Account on or before the relevant Due Date, and the Debtor bears the risk of any delay, loss or error in the transmission of funds.

The Instalment amounts and schedule set forth in this Section shall not be varied except by a written amendment executed by both Parties in accordance with this Agreement.

All payments under this Agreement shall be made in [currency], by wire transfer or other method of immediately available funds, to the Payment Account: [account holder name], [bank name], [account number/IBAN], [bank identification code], or such other account as the Creditor may designate by written notice.

Each payment shall be made by the Debtor in full, without set-off, counterclaim, withholding or deduction of any kind, except as required by applicable law, in which event the Debtor shall promptly provide the Creditor with evidence of the amount withheld and its remittance to the competent authority.

Each payment shall include a reference to this Agreement and to [payment reference], and the Debtor shall, upon the Creditor's reasonable request, furnish proof of payment, such as a bank transfer confirmation.

Each payment received shall be applied first to any costs reasonably incurred by the Creditor in connection with the enforcement of this Agreement and then due and unpaid, and thereafter to the Instalment then due or overdue in chronological order, and finally to the Outstanding Balance.

A payment shall be deemed made only when the corresponding amount is received in cleared funds in the Payment Account. Any payment received after [time] on a day that is not a Business Day, or on a day that is not a Business Day, shall be deemed received on the next Business Day.

Upon each payment, the Creditor shall, within [number] Business Days of the Debtor's written request, provide a statement of account showing payments received and the Outstanding Balance, which statement shall be prima facie evidence of such matters absent manifest error.

The Parties agree that no interest, fee, surcharge, administrative charge or other financial charge shall accrue or be payable on the Total Indebtedness or the Outstanding Balance by reason of the deferral of payment or the payment of the Total Indebtedness by Instalments.

The Parties acknowledge that the absence of interest under this Section reflects the Creditor's accommodation to the Debtor and is conditional upon the Debtor's due and punctual performance of its obligations under this Agreement.

Nothing in this Section shall prevent the Creditor from recovering, following an Event of Default that remains uncured, the reasonable and documented costs of enforcement and collection to the extent expressly provided in Section [Consequences of Default and Acceleration] of this Agreement.

No interest, late fee or penalty shall be charged in respect of any Instalment paid within the Grace Period.

The Debtor shall not be liable for any charge in respect of the administration of the Instalment arrangement, including the preparation of statements of account or the processing of payments received in accordance with this Agreement.

Any interest that may be imposed by operation of mandatory law upon judgment or otherwise shall apply only to the extent that such law cannot be waived by the Parties.

The Debtor may, at any time and from time to time, prepay all or any part of the Outstanding Balance without premium, penalty, fee or charge of any kind.

The Debtor shall give the Creditor not less than [number] Business Days' prior written notice of any prepayment exceeding [amount] [currency], specifying the amount and the proposed date of prepayment. Failure to give such notice shall not invalidate the prepayment.

Any partial prepayment shall be applied to the Instalments in [inverse order of maturity / order of maturity / as the Debtor directs in writing], and, unless the Debtor otherwise directs in writing, shall not relieve the Debtor of the obligation to pay the next Instalment due, until the Outstanding Balance has been paid in full.

Where a prepayment is applied in reduction of future Instalments, the Creditor shall, upon request, issue a revised payment schedule reflecting the reduced Outstanding Balance, without any change to the other terms of this Agreement.

Upon prepayment of the entire Outstanding Balance, this Agreement shall be satisfied in accordance with the Section governing release and satisfaction upon full payment.

The Creditor shall accept any prepayment made in accordance with this Section and shall not be entitled to refuse, delay or condition its acceptance.

If the Debtor fails to pay any Instalment on its Due Date, such failure shall not constitute an Event of Default, and no consequence of default shall arise, provided that the Instalment is paid in full within the Grace Period of [number] calendar days following the Due Date.

No interest, late fee, penalty or other charge shall accrue or be payable in respect of any Instalment paid within the Grace Period.

The Grace Period shall apply to each Instalment independently, and the Debtor's use of the Grace Period in respect of one Instalment shall not shorten or otherwise affect the Grace Period applicable to any other Instalment.

The Creditor shall not be entitled to issue a Default Notice, accelerate the Outstanding Balance or exercise any remedy under this Agreement in respect of an Instalment that remains unpaid until the Grace Period has expired.

The Grace Period shall not extend the Final Payment Date, and any amount remaining unpaid following the expiry of the Grace Period after the Final Payment Date shall be subject to the provisions of this Agreement relating to Events of Default.

The Parties acknowledge that the Grace Period is an integral part of the payment arrangement and is not a waiver or modification of the Due Date for any other purpose.

Each of the following events shall constitute an Event of Default, subject to the notice and cure provisions of this Agreement:

the Debtor fails to pay any Instalment, or any part thereof, in full within the Grace Period following its Due Date;

the Debtor fails to pay the Outstanding Balance in full on or before the Final Payment Date;

the Debtor commits a material breach of any covenant or obligation under this Agreement, other than a payment obligation, and such breach, if capable of remedy, is not remedied within the Cure Period;

any representation or warranty made by the Debtor in this Agreement proves to have been untrue or misleading in any material respect when made;

the Debtor becomes insolvent, is unable to pay its debts as they fall due, makes a general assignment for the benefit of creditors, or has commenced against it, or commences, any bankruptcy, insolvency, liquidation, reorganization or similar proceeding, which, if involuntary, is not dismissed within [number] days; or

the Debtor ceases or threatens to cease to carry on all or substantially all of its business, or disposes of all or substantially all of its assets other than in the ordinary course of business or with the Creditor's prior written consent.

Upon the occurrence of an Event of Default, the Creditor shall, before exercising any right or remedy under this Agreement, deliver a Default Notice to the Debtor in writing and in accordance with the Section governing notices.

The Default Notice shall specify in reasonable detail the nature of the Event of Default, the amount (if any) overdue, and the steps required to remedy it, and shall state that the Debtor has the Cure Period in which to remedy it.

The Debtor shall have the Cure Period within which to cure the Event of Default, by paying all overdue amounts in full or, in the case of a non-payment default, by remedying the breach to the Creditor's reasonable satisfaction.

If the Debtor cures the Event of Default within the Cure Period, the Event of Default shall be deemed not to have occurred, this Agreement shall continue in full force and effect, and the Creditor shall not be entitled to exercise any remedy in respect of it.

The Creditor shall not be required to deliver a Default Notice or to allow a Cure Period in respect of an Event of Default arising under the insolvency provisions of this Agreement, if mandatory law prohibits such cure or if the delay would materially prejudice the Creditor's rights; in all other cases, the notice and cure provisions shall apply.

A Default Notice shall not be effective unless it complies with this Section, and a defective notice shall not start the Cure Period; the Creditor may, however, deliver a corrected Default Notice at any time.

The Debtor shall promptly notify the Creditor in writing upon becoming aware of any event that constitutes, or with the passage of time or the giving of notice would constitute, an Event of Default.

If an Event of Default has occurred and has not been cured within the Cure Period, the Creditor may, by written notice to the Debtor (an "Acceleration Notice"), declare the entire Outstanding Balance immediately due and payable, whereupon the Outstanding Balance shall become due and payable on the date specified in such notice, which shall not be earlier than [number] Business Days following delivery of the Acceleration Notice.

Upon acceleration, the Debtor shall pay the Outstanding Balance in full to the Creditor without further demand, presentment or protest, all of which are hereby waived by the Debtor to the extent permitted by law.

The Creditor shall be entitled to recover from the Debtor the reasonable and documented costs and expenses, including reasonable legal fees, incurred in enforcing its rights following an uncured Event of Default.

The Creditor may pursue any remedy available under this Agreement or applicable law for recovery of the Outstanding Balance, including the commencement of legal proceedings, and the Debtor's acknowledgment of indebtedness in this Agreement may be relied upon in such proceedings.

Acceleration shall not impose any interest on the Outstanding Balance except to the extent that such interest is imposed by mandatory law, and all amounts paid by the Debtor prior to acceleration shall be credited against the Outstanding Balance.

The remedies of the Creditor under this Section are cumulative and not exclusive of any other remedies available to the Creditor under applicable law, subject to the Debtor's rights under this Agreement.

The Creditor may, by written notice at any time before payment in full of the accelerated Outstanding Balance, rescind an Acceleration Notice and reinstate the Instalment schedule, and no such rescission shall waive any subsequent Event of Default.

No failure or delay by the Creditor in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or remedy preclude any further exercise of it or the exercise of any other right.

Any forbearance, indulgence or extension granted by the Creditor in respect of an Event of Default or any payment obligation shall be effective only if given in writing and signed by the Creditor, and shall apply only to the specific instance and for the period expressly stated.

The Creditor's acceptance of any late or partial payment shall not constitute a waiver of any Event of Default or of the Creditor's right to require strict compliance with this Agreement for the future, subject to the Grace Period and the notice and cure provisions herein.

The Creditor expressly reserves all of its rights and remedies under this Agreement and applicable law, and no course of dealing between the Parties shall be construed as a waiver or modification thereof.

Nothing in this Section shall be construed to limit the Debtor's rights under this Agreement, including the Grace Period, the right to notice and cure, and the right of voluntary prepayment, all of which shall be honored by the Creditor in accordance with their terms.

Any waiver by the Creditor of a particular Event of Default shall not extend to any other or subsequent Event of Default, whether of the same or a different nature.

The Debtor represents and warrants to the Creditor, as of the Effective Date and on each Due Date, that it is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, and has full power and authority to enter into and perform this Agreement.

The execution, delivery and performance of this Agreement by the Debtor have been duly authorized by all necessary corporate or other action, and this Agreement constitutes the legal, valid and binding obligation of the Debtor, enforceable against it in accordance with its terms, subject to applicable insolvency laws and general principles affecting creditors' rights.

The execution, delivery and performance of this Agreement do not and will not conflict with the Debtor's constitutional documents, any law or regulation applicable to it, or any agreement or instrument by which it is bound.

The Debtor is not insolvent and no proceeding for its winding-up, bankruptcy, reorganization or similar relief is pending or, to the Debtor's knowledge, threatened against it.

All information provided by the Debtor to the Creditor in connection with this Agreement is, to the best of the Debtor's knowledge, true and accurate in all material respects.

The Creditor represents and warrants that it is duly organized and validly existing, has full power and authority to enter into this Agreement, and is the sole lawful owner and holder of the Total Indebtedness, free of any assignment, pledge or encumbrance.

The Creditor further represents that the Total Indebtedness has not been assigned or transferred to any third party and that no third party has any claim to payments under this Agreement.

For so long as any portion of the Outstanding Balance remains unpaid, the Debtor shall make all payments due under this Agreement in the amounts and at the times required.

The Debtor shall maintain its corporate existence and good standing and shall conduct its business in the ordinary course and in compliance with applicable laws in all material respects.

The Debtor shall, upon the Creditor's reasonable written request, not more often than once every [number] months, provide the Creditor with a written confirmation of its financial condition and ability to perform this Agreement, together with such summary financial information as the Creditor may reasonably request, subject to customary confidentiality.

The Debtor shall give the Creditor prompt written notice of any change in its name, registered address or contact details, and of any event that materially and adversely affects its ability to perform its obligations hereunder.

The Debtor shall not, without the Creditor's prior written consent (not to be unreasonably withheld), sell or dispose of all or substantially all of its assets or undergo a merger or reorganization in which it is not the surviving entity, unless the successor assumes in writing all of the Debtor's obligations under this Agreement.

The Debtor shall not assign or transfer any of its rights or obligations under this Agreement without the prior written consent of the Creditor.

The covenants in this Section shall apply only to the extent they are reasonable and shall be interpreted so as not to impose obligations beyond those expressly stated.

Upon receipt by the Creditor of payment in full of the Outstanding Balance, the Debtor shall be fully and finally discharged from all obligations in respect of the Total Indebtedness and the Underlying Obligation.

Within [number] Business Days following such payment, the Creditor shall deliver to the Debtor a written confirmation, signed by an authorized signatory, that the Total Indebtedness has been paid and satisfied in full (a "Release Confirmation").

Upon delivery of the Release Confirmation, the Creditor, on behalf of itself and its successors and assigns, hereby releases and forever discharges the Debtor from any and all claims, demands, liabilities and causes of action arising out of or relating to the Total Indebtedness and the Underlying Obligation.

The Creditor shall return to the Debtor, or destroy at the Debtor's election, any promissory note, instrument or other evidence of the Total Indebtedness held by the Creditor, and shall take all reasonable steps to release any security or registration relating thereto, if any.

The release under this Section shall not affect any obligation of either Party that is expressly stated to survive the satisfaction of this Agreement, or any claim unrelated to the Total Indebtedness.

The Creditor shall, at the Debtor's request and at the Creditor's cost, execute any further document reasonably necessary to evidence the satisfaction and release of the Total Indebtedness.

All notices, demands, consents and other communications under this Agreement shall be in writing, in the English language, and shall be delivered personally, by internationally recognized courier, by registered mail, or by e-mail to the addresses set out in this Section.

Notices to the Creditor shall be addressed to: [Creditor name], Attention: [name/title], Address: [address], E-mail: [e-mail address].

Notices to the Debtor shall be addressed to: [Debtor name], Attention: [name/title], Address: [address], E-mail: [e-mail address].

A notice shall be deemed received: if delivered personally, upon delivery; if sent by courier, on the [number] Business Day after dispatch; if sent by registered mail, on the [number] Business Day after posting; and if sent by e-mail, on the Business Day of transmission if sent before [time] on a Business Day, or otherwise on the next Business Day, provided no delivery failure notification is received.

Any Default Notice or Acceleration Notice sent by e-mail shall also be sent by courier or registered mail, and shall be effective only upon the deemed receipt of such second form of delivery.

Either Party may change its address or contact details for notices by giving not less than [number] Business Days' written notice to the other Party.

This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with the laws of [governing law jurisdiction], without regard to its conflict-of-laws principles.

The Parties shall first attempt in good faith to resolve any dispute, controversy or claim arising out of or relating to this Agreement (a "Dispute") through negotiations between their senior representatives for a period of [number] days following written notice of the Dispute.

If the Dispute is not resolved within such period, either Party may refer the Dispute to mediation in [place] under the rules of [mediation institution], for a period of [number] days, before commencing formal proceedings.

If the Dispute is not resolved by mediation, it shall be finally resolved by [arbitration under the rules of [arbitral institution] by [number] arbitrator(s) seated in [city], conducted in the English language / the competent courts of [jurisdiction], to whose exclusive jurisdiction the Parties irrevocably submit].

Nothing in this Section shall prevent either Party from seeking urgent interim or conservatory relief from a competent court at any time.

The Debtor's payment obligations shall not be suspended during any Dispute as to matters other than the amount that is the subject of a bona fide dispute notified in good faith, and undisputed Instalments shall continue to be paid when due.

Unless otherwise determined by the tribunal or court, each Party shall bear its own costs of any Dispute, save that the costs of enforcing an uncured Event of Default shall be governed by the Section governing consequences of default.

This Agreement constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior negotiations, understandings and agreements, whether oral or written, relating to the payment of the Total Indebtedness.

No amendment, modification or supplement to this Agreement shall be effective unless made in writing and signed by duly authorized representatives of both Parties.

If any provision of this Agreement is held to be invalid, illegal or unenforceable, such provision shall be severed or modified to the minimum extent necessary, and the remaining provisions shall continue in full force and effect.

This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns. The Creditor may assign its rights hereunder only to a assignee that agrees in writing to be bound by this Agreement and upon written notice to the Debtor, and such assignment shall not worsen the Debtor's position.

Each Party shall bear its own costs and expenses incurred in connection with the negotiation, preparation and execution of this Agreement, and any taxes, duties or similar charges levied on the Creditor's income shall be borne by the Creditor.

Each Party shall keep the terms of this Agreement confidential and shall not disclose them to any third party, except to its professional advisers, auditors, financiers or as required by law or competent authority.

This Agreement may be executed in any number of counterparts, including by electronic signature or exchange of scanned copies, each of which shall be deemed an original and all of which together shall constitute one instrument.