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Unsecured Promissory Note - Lump Sum

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Unsecured Promissory Note - Lump Sum Powered By Docstoc
					This Promissory Note is an agreement between two parties where one party agrees to
repay the other for a loan. This agreement requires the borrower to pay one lump sum
payment at a specified date. Additionally, this note is unsecured, which means that the
borrower does not provide the lender with a security interest in any property as collateral
for repayment. This agreement can be used by individuals or small businesses that
want to provide a lender an unsecured promissory note for the repayment of a loan with
one lump sum payment.
              PROMISSORY NOTE—LUMP SUM—UNSECURED
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 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 date] and shall be delivered to the address of Lender.

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
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.


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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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DOCUMENT INFO
Description: This Promissory Note is an agreement between two parties where one party agrees to repay the other for a loan. This agreement requires the borrower to pay one lump sum payment at a specified date. Additionally, this note is unsecured, which means that the borrower does not provide the lender with a security interest in any property as collateral for repayment. This agreement can be used by individuals or small businesses that want to provide a lender an unsecured promissory note for the repayment of a loan with one lump sum payment.
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