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This promissory note is a written acknowledgment of a debt owed, between two or more parties, and a promise to repay the debt. Promissory notes can be secured or unsecured. This promissory note provides for a specific due date, fixed rate of interest, and due date of the repayment of the promissory note. It also provides for the option of securing the promissory note by way of collateral as well as various options of repayment frequency of principal and interest.
Secured Promissory Note This Secured Promissory Note is an agreement between a lender and a borrower, whereby the borrower promises to repay the loan in the future. The agreement sets forth the interest rate that is added to any unpaid balance. Under this particular promissory note, the borrower provides additional security for the repayment of the loan by providing the lender with a security interest in certain assets. This document should be used by individuals or entities when entering into a loan agreement using certain assets as security for the repayment of a loan. PROMISSORY NOTE Borrower Information: [Instruction: Insert Name, Address of Borrower] Lender Information: [Instruction: Insert Name, Address of Lender] Amount: _____________ dollars ($__) Due: _____________________ Interest: _________ percent (___ %) [Instruction: Insert applicable terms] For value received, _________________ (the “Borrower”) [Instruction: Insert borrower name] the undersigned, hereby unconditionally promises to pay to the order of ____________________ (the “Lender”) [Instruction: Insert Lender name] at _______________________, [Instruction: Insert address of Lending Party] or at such other address as he/she/it in writing may direct, without any right of deduction, set-off, or abatement whatsoever, the principal sum of _________________ dollars ($_____) [Instruction: Insert principal sum] (the “Principal”), with interest accrued at the rate of __________ percent (___%) per annum [Instruction and Comment: Insert interest rate. Parties may customize to different computation period, such as, for example, a monthly interest rate. If the interest rate is to be variable, remove the word “fixed,” insert variable, state initial percentage rate, and attach rate change schedule as an Exhibit hereto], to become due and payable on the ____ day of ______________, _______. [Instruction: Insert due date] Borrower hereby promises to pay the Principal and the interest accrued thereon to Lender in equal and consecutive ___________________ (monthly/quarterly/yearly) installments in the amount of __________________ dollars ($________) (per month/per quarter/per year) commencing on the ______ day of __________, 20____ and each and every ______ day of ______________ thereafter, with the final installment of Principal and interest due and payable on the _____ day of ____________, _______. [Instruction: Insert applicable terms] The entire amount of Principal outstanding hereunder and any accrued interest thereon, is secured by way of _____________________________ [Instruction: Insert collateral being securitized. If substantial number of items, you may attach hereto as a separate schedule] (the “Collateral”) and may become due and payable, without notice or demand, in the event of any one or more following events of default: 1. Any monthly installment of Principal and interest not paid when due and remaining unpaid for a period of ___________ (___) days thereafter; 2. Any change in ownership of or in the Collateral, without the prior written consent of Lender; 3. Any default as defined in the Collateral securing this Promissory Note; or 4. Any bankruptcy or insolvency proceedings that are brought by or against the undersigned. © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 1 Should any amount(s) that become due under this Promissory Note not be paid in full in accordance with its terms and provisions, the undersigned hereby agrees to pay to Lender all reasonable associated costs, fees, and expenses (including without limitation, attorneys’ fees) incurred for the collection of same. In the event of payment of interest or any other amounts secured by this Promissory Note, upon the bankruptcy or insolvency of the undersigned, upon the filing of a petition in bankruptcy against the undersigned, or upon the making of a proposal in bankruptcy by the undersigned, the whole of the monies (or any part thereof) secured by this Promissory Note remaining unpaid shall, at the option of Lender, forthwith become due and payable and all the powers in and by the Promissory Note or by law conferred in case of default shall become exercisable. The undersigned hereby waives the benefits of division and discussion, demand and presentment for payment, notice of non-payment, and protest and notice of protest of this Promissory Note. No course of dealing between the undersigned and Lender, delay on the part of Lender in exercising any rights hereunder, or waiver of any instance of breach shall operate as a waiver of any rights of Lender. All of the covenants, stipulations, promises, and agreements contained in this Promissory Note made by or on behalf of the undersigned shall bind his/her/its heirs, executors, administrators, successors, and assigns, whether or not so expressed. The undersigned may, at any time, without notice, bonus, or penalty, prepay or cause to be prepaid the whole or any part of the Principal and interest accrued remaining unpaid hereunder. Any payments made in excess of any interest-only payment due shall be applied first to any late charges then due and owing, then to any NSF charges then due and owing, and then to any interest then due and owing. The remainder of any such excess payment shall then be applied to the Principal. This Promissory Note shall be governed and construed in accordance with the applicable laws of the State of ______________________. [Instruction: Insert state] [Option: At the parties’ option, the Agreement can be made assignable using the following language. If only one party is to be permitted to assign the rights and obligations under this Note, this can be modified to state which party is permitted to assign.] The Borrower covenants and agrees not to assign any of the obligations under this Promissory Note, except by express, written consent of Lender. Borrower shall, however, be permitted to assign its rights to receive money under this Promissory Note, without the consent of Lender. An assignment without the prior written consent of Lender shall be absolutely null and void and shall, at Lender’s option, terminate this Promissory Note. In the event of same, at Lender’s option and in its sole discretion, all principal and interest due under this Promissory Note may become immediately due and payable in full. Lender shall have the right to assign its rights and obligations under this Promissory Note without any consent by Borrower. Any change to this Promissory Note, other than a change in Lender’s address, shall be in a writing signed by both parties. © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 2 DATED: ____________________, this _____ day of _____________, 20____. [Enter Company Name, if applicable] By: Name: Title: I have authority to bind the Company. [or, if individual] By: Name: Witness Print Name: Address: [Comment: Lender should consult a tax professional and licensed attorney specializing in tax law if the loan is to be payable at 0% interest, or if any portion of the loan is to be forgiven, as these may implicate estate tax, among other tax issues] © Copyright 2013 Docstoc Inc. registered document proprietary, copy not 3
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