Complete all fields marked with [BRACKETS] before use.
Promissory Note (Simple / Unsecured)
Principal Amount: $[PRINCIPAL AMOUNT]
Date of Issuance: [DATE]
Borrower: [BORROWER NAME], a [STATE] [ENTITY TYPE] with its principal place of business at [BORROWER ADDRESS] (the “Borrower”)
Lender: [LENDER NAME], a [STATE] [ENTITY TYPE / individual] with an address at [LENDER ADDRESS] (the “Lender”)
FOR VALUE RECEIVED, the Borrower hereby unconditionally promises to pay to the order of the Lender the principal sum of [PRINCIPAL AMOUNT] Dollars ($[PRINCIPAL AMOUNT]) (the “Principal Amount”), together with accrued interest thereon, in accordance with the terms and conditions set forth in this Promissory Note (this “Note”).
1. Interest
The outstanding Principal Amount shall bear simple interest at the rate of [INTEREST RATE]% per annum, calculated on the basis of a 365-day year and the actual number of days elapsed. Interest shall accrue from the Date of Issuance and shall be computed on the outstanding Principal Amount from time to time remaining unpaid.
2. Payment Terms
The Principal Amount, together with all accrued and unpaid interest thereon, shall be due and payable in full on [MATURITY DATE] (the “Maturity Date”). [OPTIONAL: Principal and interest shall be payable in [monthly / quarterly] installments of $[INSTALLMENT AMOUNT] each, commencing on [FIRST PAYMENT DATE] and continuing on the [DAY] day of each [month / quarter] thereafter until the Maturity Date, at which time the entire remaining unpaid Principal Amount and all accrued interest shall be due and payable in full.]
All payments under this Note shall be made in lawful money of the United States by [wire transfer / check / ACH] to the Lender at such account or address as the Lender may designate in writing from time to time. Payments shall be applied first to any fees or charges due, then to accrued interest, and then to the outstanding Principal Amount.
3. Prepayment
The Borrower may prepay the outstanding Principal Amount, in whole or in part, at any time without premium or penalty, upon [NUMBER] days’ prior written notice to the Lender. Any partial prepayment shall be applied to the Principal Amount in inverse order of maturity.
4. Late Payment
If any payment of principal or interest is not received by the Lender within [NUMBER, e.g., 10] calendar days after the date on which such payment is due, the Borrower shall pay a late charge equal to [LATE CHARGE PERCENTAGE, e.g., 5]% of the overdue amount (the “Late Charge”). The Late Charge shall be in addition to, and not in lieu of, any other rights or remedies available to the Lender.
5. Default
Each of the following shall constitute an “Event of Default” under this Note: (a) the Borrower’s failure to pay any amount of principal or interest when due and such failure continues for [NUMBER, e.g., 10] business days after written notice thereof from the Lender; (b) the Borrower’s breach of any other material term, covenant, or condition of this Note that remains uncured for [NUMBER, e.g., 30] days after written notice; (c) the Borrower becomes insolvent, makes a general assignment for the benefit of creditors, or files or has filed against it a petition in bankruptcy or for reorganization; (d) the dissolution, liquidation, or winding up of the Borrower; or (e) any material representation made by the Borrower in connection with this Note proves to have been false or misleading in any material respect when made.
6. Acceleration
Upon the occurrence of an Event of Default, the Lender may, at its option, by written notice to the Borrower, declare the entire unpaid Principal Amount, together with all accrued and unpaid interest and any other amounts due under this Note, to be immediately due and payable, without demand, presentment, protest, or further notice of any kind, all of which are hereby expressly waived by the Borrower. Upon such acceleration, the outstanding Principal Amount shall bear interest at the Default Rate of [DEFAULT RATE, e.g., the lesser of 18% per annum or the maximum rate permitted by applicable law] from the date of such Event of Default until paid in full.
7. Security
This Note is unsecured. The Borrower’s obligations under this Note are general unsecured obligations of the Borrower and rank pari passu with all other unsecured and unsubordinated indebtedness of the Borrower, subject to any obligations given priority by mandatory provisions of applicable law.
8. Waivers
The Borrower hereby waives presentment for payment, demand, notice of demand, notice of nonpayment or dishonor, protest, notice of protest, and all other notices in connection with the delivery, acceptance, performance, default, or enforcement of this Note, except as otherwise expressly provided herein. No failure or delay by the Lender in exercising any right, power, or remedy under this Note shall operate as a waiver thereof, nor shall any single or partial exercise of any right preclude any other or further exercise thereof or the exercise of any other right.
9. Attorneys’ Fees
If the Lender retains an attorney to collect any amount due under this Note or to enforce any of the Lender’s rights or remedies hereunder, the Borrower shall pay all reasonable attorneys’ fees, costs, and expenses incurred by the Lender in connection therewith, whether or not any legal proceeding is commenced.
10. Governing Law
This Note shall be governed by and construed in accordance with the laws of the State of [GOVERNING LAW STATE], without regard to its conflict-of-laws principles. The parties consent to the exclusive jurisdiction of the state and federal courts located in [COUNTY, STATE] for any dispute arising out of or relating to this Note.
11. Amendments
This Note may not be amended, modified, or waived except by a written instrument signed by both the Borrower and the Lender.
12. Severability
If any provision of this Note is held to be invalid, illegal, or unenforceable, the remaining provisions shall continue in full force and effect.
13. Notices
All notices under this Note shall be in writing and shall be deemed duly given when delivered personally, sent by nationally recognized overnight courier, or sent by certified or registered mail, return receipt requested, postage prepaid, to the addresses set forth above or to such other address as either party may designate in writing.
SIGNATURES
IN WITNESS WHEREOF, the Borrower has executed this Promissory Note as of the Date of Issuance first written above.
BORROWER:
[BORROWER NAME]
By: _________________________
Name:
Title:
Date:
ACKNOWLEDGED AND AGREED:
LENDER:
[LENDER NAME]
By: _________________________
Name:
Title:
Date: