Promissory Note
PROMISSORY NOTE
$300,000.00
Date: January 9, 2025
FOR VALUE RECEIVED, the undersigned Borrower, [your Trust account, or other]
(hereinafter referred to as the
"Borrower"), with its principal place of business at [Insert Address], promises
to pay to the order of
Federal Credit Union (hereinafter referred to as the "Lender"), with its
principal place of business
at [Insert Address], the principal sum of Three Hundred Thousand Dollars
($300,000.00), subject to the
following terms and conditions:
1. PAYMENT TERMS AND INTEREST
1.1 Principal and Interest: The Borrower shall repay the principal sum, together
with interest at the rate
of [Insert Interest Rate]% per annum. Payments shall be made in equal
monthly installments
commencing on [Insert Start Date] and continuing until [Insert Maturity Date].
1.2 Grace Period: The Borrower is entitled to a grace period of 30 calendar days
from the due date for
each payment before any late fees or penalties apply.
1.3 Interest Rate Cap: The interest rate on this Note shall never exceed the
maximum rate permitted by
applicable law, ensuring the Borrower is not subject to usury.
2. PREPAYMENT AND EARLY TERMINATION
2.1 Prepayment Rights: The Borrower may prepay all or part of the outstanding
principal at any time
without penalty or additional fees. Prepayments shall first be applied to
accrued interest and then to
the principal balance.
2.2 Early Termination: In the event of prepayment of the full balance, the
Borrower shall receive a refund
of any unearned interest calculated on a pro-rata basis.
3. PLACE AND METHOD OF PAYMENT
Payments shall be made to the Lender at [Insert Payment Address] or through
electronic transfer as
designated in writing by the Lender. Payments are deemed received on the date
they are postmarked or
electronically submitted.
4. BORROWER PROTECTIONS (UCC ARTICLE 3)
4.1 Non-Negotiability: This Note is not negotiable without prior written consent
from the Borrower,
ensuring that no third party may become a holder in due course without the
Borrower's approval.
4.2 Limited Remedies: The Lender's enforcement rights are limited to those
expressly stated herein,
protecting the Borrower from undue or excessive collection efforts.
5. SECURITY INTEREST (UCC ARTICLE 9)
5.1 Conditional Security: If collateral is required, the Borrower grants a security
interest in [Insert
Collateral Description]. However, the Lender agrees to release the security
interest once the Borrower
has paid 50% of the outstanding balance.
5.2 Limitation on Repossession: The Lender may only repossess collateral after
providing the Borrower
with a minimum of 60 days' written notice, during which the Borrower may
cure any default.
6. DEFAULT TERMS
6.1 Events of Default: Default occurs only if the Borrower fails to make a
payment within 60 days of the
due date or violates another material term of this Note.
6.2 Right to Cure: The Borrower shall have 30 days after receiving written
notice of default to cure any
breach before the Lender may accelerate the balance or take enforcement
action.
6.3 No Acceleration Without Cause: The Lender shall not declare the entire
outstanding balance due
unless a default has occurred and remains uncured.
7. WAIVERS
7.1 Limited Waivers: The Borrower waives presentment and protest but does
not waive any rights to notice
or the ability to assert defenses or counterclaims against the Lender.
7.2 Rights Retained: The Borrower retains all rights under UCC § 3-305 to assert
claims or defenses
against enforcement.
8. GOVERNING LAW
This Note shall be governed by and construed in accordance with the laws of
the State of Delaware and
applicable provisions of the UCC, with any ambiguities resolved in favor of the
Borrower.
9. MODIFICATION AND AMENDMENTS
No modifications or amendments shall be effective unless made in writing and
signed by both the
Borrower and the Lender. The Borrower reserves the right to negotiate
reasonable adjustments to
payment terms without penalty.
10. DISPUTE RESOLUTION
10.1 Mediation First: In the event of a dispute, the parties agree to engage in
good faith mediation prior
to initiating litigation.
10.2 Borrower's Forum: Any legal action shall be brought exclusively in a court
located in the Borrower's
principal place of business to minimize the Borrower's litigation costs.
IN WITNESS WHEREOF, the undersigned Borrower and Lender have executed
this Promissory Note as of
the date first written above.
Borrower:
[your Trust account, or other]
By: ___________________________
Name: your name or trustee name
Title: Trustee
Lender:
Federal Credit Union
By: ___________________________
Name: [Insert Name]
Title: [Insert Title]