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Promissory Note - Lump Sum

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Promissory Note - Lump Sum Powered By Docstoc
					This is an agreement between a lender and a borrower, whereby the borrower promises
to pay the lender a predetermined sum of money at some point in the future. The
agreement sets forth the annual 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 property.
Additionally, this note can become immediately due at the election of the lender. This
document should be used by individuals or entities that want to enter into a loan
agreement using certain assets as security for the repayment of the loan.
                     PROMISSORY NOTE—LUMP SUM—SECURED

AMOUNT: $_______________                                             DATE: ________________

INTEREST RATE: _________                                             DUE: _________________
[Instruction: Insert applicable terms.]

        FOR VALUE RECEIVED, ______________ [Instruction: Insert Borrower name] (the
“Borrower”) hereby promises to pay to the order of _____________________ [Instruction:
Insert Lender name] (the “Lender”) at _____________________________ [Instruction: Insert
Lender address] the principal sum of _______________ dollars ($___________) [Instruction:
Insert principal amount], payable on demand, with interest thereon at the rate of __________
percent (_____ %) annually. [Instruction and Comment: Insert interest rate. Parties may
customize to different computation period, for example, monthly interest rate. Further, if
the interest rate is to be variable, remove the word “fixed” and insert variable, and state
initial percentage rate and attach rate change schedule] Payment shall be due on
______________ [Instruction: Insert payment due date.] and shall be delivered to Lender’s
address, as set forth in this Promissory Note, or at such address as Lender shall direct in writing.

        THIS PROMISSORY NOTE is secured by an additional agreement executed by the
parties hereto on _______________ [Instruction: Insert date of separate agreement], whereby
the undersigned has pledged its/his/her interests in certain assets and undertaken certain
additional obligations, as are fully set forth in Schedule “A” attached hereto.

        NO COURSE OF DEALING between Borrower and Lender or any delay on the part of
Lender in exercising any rights hereunder 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 Borrower shall bind his or her heirs, executors, administrators, successors, or
assigns, whether or not so expressed.

        BORROWER MAY, at any time, without notice, bonus, or penalty, prepay or cause to be
prepaid the whole or any part of the principal amount 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 by the laws of the State of
________________ [Instruction: Insert state], which laws shall be applicable to the
interpretation, construction, and enforcement hereof.

       [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, it can be modified to state which party is permitted to assign] Borrower
covenants and agrees not to assign any of the obligations under this Note, except by
express, written consent of Lender. Borrower shall, however, be permitted to assign its
rights to receive money under this Note without the consent of Lender. An assignment


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without the prior written consent of Lender shall be absolutely null and void and shall, at
Lender’s option, terminate this Note. In the event of same, at Lender’s option in its sole
discretion, all principal and interest due under this Note may become immediately due and
payable in full. Lender shall have the right to assign its rights and obligations under this
Note without any consent by Borrower.

       IN THE EVENT OF payment of interest or any other amounts secured by this
Promissory Note, upon the bankruptcy or insolvency of Borrower, the filing of a petition in
bankruptcy against Borrower, or the making of a proposal in bankruptcy by Borrower, 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.

        ANY CHANGE TO THIS AGREEMENT, other than a change in Lender’s address, shall
be in a writing signed by both Parties.

        DATED this _____ day of ____________________, _______.
        [Instruction: Insert applicable information]




Witness:                                          Debtor
or if Debtor is a Company

                                                  (COMPANY)
                                                  Per:


                                                  Name:
                                                  Title:
                                                  I have authority to bind the Company.

        [Comment: Lender should consult a tax professional and attorney licensed and
experienced 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]




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                                         SCHEDULE “A”




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DOCUMENT INFO
Description: This is an agreement between a lender and a borrower, whereby the borrower promises to pay the lender a predetermined sum of money at some point in the future. The agreement sets forth the annual 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 property. Additionally, this note can become immediately due at the election of the lender. This document should be used by individuals or entities that want to enter into a loan agreement using certain assets as security for the repayment of the loan.
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