Promissory Note
$______[Amount] / Dated: ______
FOR VALUE RECEIVED, the undersigned, ______(“Borrower”), located at ______[address, city, state],[SC1]hereby promises to pay to the order of ______(“Lender”), located at ______[address, city, state][SC2], the principal sum of $______(the “Principal Amount”)[, together with interest on the outstanding principal amount (the “Principal Balance”),and[MY3]] in accordance with the terms set forth below.
1. Payment. The Principal Amount of this Promissory Note (this “Note”) together [with accrued and unpaid interest and[MY4]] all other charges, costs and expenses, is due and payable on or before ______[date of final payment of loan] (the “Maturity Date”). [All payments under this Note are applied first to accrued interest and thento the Principal Balance[MY5].]
2. Payment Schedule. This Note shall be payable in installments equal to $______. [amount of installment payments] The first payment is due on ______[date of first payment] and due thereafter in _____ [number of installments] equal consecutive [monthly/quarterly/semi-annual/annual] installments. Each successive payment is due on the _____ [number ie first, fifth, fifteenth] day of the [month/quarter/year].[SC6]
3. Security. Borrower agrees that until the Principal Amount of this Note [together with interest[MY7]] is paid in full, this Note will be secured by ______(the “Collateral”), and Borrower hereby grants to Lender a security interest in and to the Collateral.
4. Interest. The Principal Balance of this Note shall bear interest at the rate of ______% per annum, accruing daily from the date of this Note to and until the Maturity Date.Notwithstanding, the total interest charged on the Principal Amount shall not exceed the maximum amount allowed by law and Borrower shall not be obligated to pay any interest in excess of such amount.
5. Acceleration. In the event Borrower is more than _____ [number[MY8]] days late with a payment, Lenderin its sole discretion may demand that the entire balance of the unpaid principal amount of this Note and any accrued and unpaid interest be immediately due and payable in full.
6. Prepayment[MY9]. Borrower has the right to prepay all or any part of the Principal Amount of this Note[, together with accrued and unpaid interest thereon,] at any time without prepayment penalty or premium of any kind. If Borrower pays all of the Principal Amount[, together with accrued interest,] on or before ______[discount due date], Lender will give a discount of ____ % of the Principal Amount then due.[Borrower must provide ______days prior written notice to Lender of the prepayment and the amount of the prepayment.][SC10]
7. Events of Default.[MY11]The following shall each constitute an “Event of Default” under this Note:
(a)Borrower’s failure to make any required payment in this Note
(b)a misrepresentation or misstatement made by Borrower to Lender in securing this Note
(c)the insolvency of Borrower
(d)[user to write in own]
8. Costs and Fees. Upon the occurrence of anEvent of Default, Borrower shall pay to Lender all costs of collection, including reasonable attorney's fees.[If Borrower fails to make a payment due under this Note within ______[number] days after the payment’s due date, Borrower agrees to pay to Lender a late payment fee of ______% of the amount then due.] [SC12]
9. Waiver. Borrower and all sureties, guarantors and endorsers hereof, waive presentment, protest and demand, notice of protest, demand and dishonor and nonpayment of this Note.
10. Guaranty. ______[guarantor] located at ______, [guarantor’s address] (“Guarantor”) promises to unconditionally guarantee to Lender, the full payment and performance by Borrower of all duties and obligations arising under this Note. Guarantor agrees that this guaranty shall remain in full force and effect and be binding on Guarantor until this Note is satisfied.
11. Successors and Assigns. This Note will inure to the benefit of and be binding on the respective successors and permitted assigns of Lender and Borrower. Borrower may not assign its rights or delegate its duties under this Note without Lender’s prior written consent.
12. Joint and Several Liability. If there is more than one Borrower on this Note, the obligation of each Borrower shall be joint and several under this Note.
13. Amendment. This Note may be amended or modified only by a written agreement signed by Borrower and Lender.
14.No Waiver. Lender shall not be deemed to have waived any provision of this Note or the exercise of any rights held under this Note unless such waiver is made expressly and in writing. Waiver by Lender of a breach or violation of any provision of this Note shall not constitute a waiver of any other subsequent breach or violation.
15. Severability. In the event that any of the provisions of this Note are held to be invalid or unenforceable in whole or in part, the remaining provisions shall not be affected and shall continue to be valid and enforceable as though the invalid or unenforceable parts had not been included in this Note.
16. Notifications. Any notice or communication under this Note must be in writing and either personally delivered, sent by overnight courier service, certified or registered mail, postage prepaid, return receipt requested to the address specified above or by facsimile or electronic email transmission[SC13].
17. Governing Law. This Note shall be governed by and construed in accordance with the laws of the [State/Commonwealth] [SC14]of ______.
IN WITNESS WHEREOF, the undersigned has executed this Note as of the date first stated above.
SIGNATURES
______/ ______Borrower Signature / Guarantor Signature[MY15][MY16]
______/ ______
Borrower Full Name / Guarantor Full Name
______/ ______
Borrower Representative / Guarantor Representative Name[MY17]
______/ ______
Borrower Representative Title / Guarantor Representative Title[MY18]
______
Lender Signature[MY19]
______
Lender Full Name
______
Lender Representative
______
Lender Representative Title
[SC1]This applies when the borrower is an individual.
If borrower is an entity, then use “a ______
[corporation/partnership/limited liability company] formed under the laws of the [State/Commonwealth] of ______located at ______[address, city, state] (the ‘‘Borrower’’)
[SC2]This applies when the lender is an individual.
If lender is an entity, then use “a ______
[corporation/partnership/limited liability company] formed under the laws of the [State/Commonwealth] of ______located at ______[address, city, state] (the ‘‘Lender’’)
[MY3]include if there is interest
[MY4]Interest
[MY5]Only if there is interest
[SC6]This paragraph makes this note an installment payment.
[MY7]Interest
[MY8]Change the question – When can the lender accelerate the loan?
If Borrower is more than a certain number of days late on a payment, the lender can demand full payment of the entire balance and any accrued interest.
[MY9]Optional - Can the borrower prepay any amount of the loan without penalty?
[SC10]This is optional. We can make this a question and leave it up to the user to select whether they want to include a written notice requirement.
[MY11]Do you want to specify what constitutes an event of default under the note?
Yes
Please select which events will constitute a default under the note.
[SC12]This is optional. We can make this a question and leave it up to the user to select whether they want to include a late fee.
[SC13]The delivery methods can be made into questions and up to the user to select which methods to include.
[SC14]Most states use “State” but there are 4 that use “Commonwealth” which are Kentucky, Massachusetts, Pennsylvania and Virginia. Also District of Columbia does not need either State or Commonwealth in front of it.
[MY15]Leave blank for signature
[MY16]If there is guarantor
[MY17]If an entity
[MY18]If an entity
[MY19]Optional to have lender signature