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Arrangement With Creditors
1. Introduction. Agreement dated [date] among [names and
addresses] (Creditors) and [name and address] (Debtor).
2. Purpose of Agreement. Debtor owes Creditors various sums
that Debtor, because of business reverses, is unable to pay in full.
Creditors prefer not to institute insolvency proceedings against Debtor
either in a State court or in the U.S. Bankruptcy Court and, therefore,
are willing to accept less than the full amount owing to each of them.
3. Compromise of Indebtedness. Creditors agree with each
other and with Debtor to accept from Debtor ---------- cents
($0----------) for each dollar Debtor owes each of them.
4. Method of Payment. Debtor shall pay each of Creditors the
sum set out in Paragraph 3 in the following manner:
a. Cash Payment ---------- percent (----------%) in cash no
later than [date].
b. Promissory Notes. The balance in promissory notes dated
[date] due on [date] with interest at the rate of ---------- percent
(----------%) per annum, payable at the [bank] located at [address].
The notes are to be delivered together with the cash payment provided
for in this Paragraph.
5. Creditors Not to Sue or Interfere With Debtor. No Creditor
will sue Debtor or proceed against Debtor's property to satisfy any debt
owed by Debtor to any Creditor. However, any Creditor may enforce any
remedy that Creditor has against Debtor's sureties or guarantors or
against any of Debtor's property in which Creditor has a security
6. Events That Would Make This Agreement Void. This Agreement
shall be void and of no effect if any of the following events occur:
a. Debtor's Failure to Make Cash Payment. Debtor's failure
to make the cash payment by [date], as provided in Paragraph 4(a).
b. Debtor's Failure to Deliver Promissory Notes. Debtor's
failure to deliver the promissory notes to Creditors by [date], as
provided in Paragraph 4(b).
c. Creditor's Failure to Accept Agreement. The failure of
all of Debtor's Creditors to accept and sign this Agreement by [date].
7. Agreement Binding on Representatives, Assigns, Etc. This
Agreement is binding upon Debtor's and Creditors' executors,
administrators, transferees, and assigns.
8. Controlling Law. This Agreement is governed by the law of
ACKNOWLEDGEMENT BY NOTARY PUBLIC
State of ________)
On ________, before me, ________, Notary Public, personally appeared ________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies) and that by his/her/their signatures on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under the PENALTY OF PERJURY under the laws of the State of _________ that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Name of Notary
My Commission Expires