This document establishes an official line of credit between a borrower and lender. It contains numerous of the standard clauses commonly used in these types of agreements, including terms for the amount of the credit line limit and interest rate. As drafted this line of credit promissory note is secured by a mortgage on certain property. This form also provides opportunities for optional language to allow the parties to customize the document to fit their needs.
This document establishes an official line of credit between a borrower and lender. It contains numerous of the standard clauses commonly used in these types of agreements, including terms for the amount of the credit line limit and interest rate. As drafted this line of credit promissory note is secured by a mortgage on certain property. This form also provides opportunities for optional language to allow the parties to customize the document to fit their needs. LINE OF CREDIT PROMISSORY NOTE This Line of Credit Promissory Note (the “Note”) is made and effective this __________ day of _______________, 20____ [Instruction: Insert date.]. Between: Name ________________________________ Address___________________________________ [Instruction: Insert applicable Lender information.] (the “Lender”) And: Name ________________________________ Address___________________________________ (the “Borrower”) [Instruction: Insert applicable Borrower information.] 1. It is the intent of the Borrower and Lender to create a line of credit for the benefit of the Borrower whereby Borrower may borrow up to the amount of $______________ [Instruction: Insert credit line limit.] from Lender, provided, however, that Lender has no obligation to advance any amounts to the Borrower and the Lender is advancing money hereunder at its sole and complete discretion. At any time Borrower may request the Lender to advance the amount and the Lender for any or no reason may deny such request. 2. The loan advanced under this Note shall bear simple interest at the rate of _____ % [Instruction: Insert interest rate.] per annum. Interest shall be calculated based on the principal balance as may be adjusted from time to time to reflect additional advances made hereunder. Interest shall accrue monthly on the unpaid balance under this Note but shall not be due and payable until such time as when the principal balance of this Note becomes due and payable. The principal balance and any accrued interest of this Note shall be due and payable on or before _____________. [Instruction: Insert date when payment is due.] If the Borrower fails to make any payment within _____ [Instruction: Insert number of days.] days of demand, this Note shall be turned over for collection and in such an event the Borrower agrees to pay all reasonable legal fees and costs of collection, including attorney’s fees, to the extent permitted by law. 3. The Borrower may prepay the outstanding balance under this Note in full or in part at any time without premium or penalty. In the event that any payment is returned for insufficient funds ("NSF") or if the undersigned stops payment, Borrower will pay $35 [Comment: Amount charged for NSF checks should be reasonable and Lender may want to have such dollar amount be reasonably related to the amount to be charged by Lender’s © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 2 bank for such checks.] to Lender for each such check. All prepayments shall first be applied to accrued interest and thereafter to the principal loan amount. 4. This Note shall be secured by a mortgage ("Mortgage") upon certain property owned by the Borrower located in _________ [Instruction: Insert county.] County, _____ [Instruction: Insert state.] and more particularly described as follows: _____ [Instruction: Insert property description.] 5. The occurrence of one or more of the following events shall constitute a default on part of the Borrower: (i) if the Borrower fails to make any payments of the principal or interest hereunder or if the Borrower fails to perform any liability or obligation of Borrower hereunder; (ii) if the Borrower fails to perform or to observe any of the provisions of the Mortgage, Security agreement or any other agreement evidencing or creating any security for the payment of the Note; (iii) if the Borrower is insolvent or appoints a receiver for all or part of Borrower’s property or if the Borrower makes any assignment for the benefit of creditors; (iv) if the Borrower is unable to, or admits in writing of its insolvency or inability to pay the debts as they become due; (v) if the Borrower commences any case, proceeding, or action relating to bankruptcy, insolvency, reorganization or relief of debtors, or any such action shall be commenced against the Borrower. 6. In the event of any default under this Note, Lender may declare the entire amount due and owing hereunder and ask the Borrower to pay immediately all outstanding obligations. Lender may also proceed to enforce all of the rights and remedies available in law and in equity and to enforce and collect the amount owed under this Note. 7. Borrower hereby waives demand, presentment for payment, notice of non-payment, diligence in collecting, grace and notice of protest and agrees to remain fully bound until all amounts due under this Note is fully paid. 8. This Note shall be binding upon the Borrower’s successors and shall accrue to the benefit and be enforceable by the Borrower and his/her successors, legal representatives and assigns. 9. This Note shall take effect as a sealed instrument and be enforced in accordance with the laws of the State of ________________. [Instruction: Insert state.] © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 3 10. Should any provision or provisions of this Note and/or its conditions be illegal or not enforceable, it or they shall be considered separate and severable from the Note and its remaining provisions and conditions shall remain in force and be binding upon the parties hereto as though the said provision or provisions or conditions had never been included. 11. Neither this Note nor any provision thereof may be waived, changed or cancelled except in writing. 12. Any singular word or term herein shall also be read as in the plural and the neuter shall include the masculine and feminine gender, whenever the sense of this Note may require it. BORROWER: _______________________________________ LENDER: ________________________________________ © Copyright 2011 Docstoc Inc. registered document proprietary, copy not 4
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