Example of Promissory Note

1. Promise to Pay
For the value received,                                                                                 (Borrower’s name)
promises to pay                                                                        (Lender’s name) the amount of
$                                            and interest at the yearly rate of                              % on the
unpaid balance as specified below.

2. Payment Terms
  [ ] Borrower agrees to pay $                                   each month on the                         day of
     the month for a total of                     payments.
  [ ] Borrower agrees to pay one lump sum on                                                                  date.
  [ ] Borrower agrees to pay $                                  each month on the                        day
      of the month and will make a final balloon payment of                     on at the end of loan
      on this date                             .

3. Application of Payment
Payments will be applied to interest first, and then to the principal balance.

4. Prepayment Terms
Borrower may prepay any or all of the principal amount without penalty.

5. Loan Acceleration.
If the Borrower is more than                      days late in repayment, the Lender has the right to
request the entire balance of the unpaid principal immediately, with the interest that has accrued.


6. Security
[ ] This is loan is an unsecured note.
[ ] The Borrower agrees that this note will be secured under a security agreement and Uniform
Commercial Code Financing statement giving the Lender a security interest in any equipment,
fixtures, inventory and accounts receivable until the principal amount and interest owed are paid
in full.
[ ] The Borrower agrees that until the principal amount and interest owed are paid in full, this
      note will be secured by a
     [ ] Mortgage
     [ ] Deed of trust covering the real estate known as                                                                  

7. Collection Costs.
If the Lender wins in a lawsuit on the collection of this loan, the Borrower will pay the Lender’s
legal costs and lawyer fees in an amount decided by the court.

The undersigned and all parties to this note, whether as endorsers, guarantors or sureties, agree
to remain fully bound until this note is fully paid and waive demand, protest of all notices hereto `
and further agree to remain bound to this note notwithstanding any extension, modification,
waiver, discharge or release of any obliging party hereunder or exchange, substitute, or release
of any collateral granted as security for this note. No modification or indulgence by any holder
shall be binding unless presented in writing; and any indulgence allowed on any one occasion
shall not be an indulgence for any other or future occasions. Any modification or change in these
contract terms; will be valid and binding upon each of the undersigned parties, notwithstanding
the acknowledgement of any of the undersigned, and each of the undersigned does hereby
irrevocably grant to each of the others a power of attorney to enter into any such modification on
their behalf. The rights of any holder hereof shall be cumulative and not necessarily successive.
This note shall take effect as a sealed instrument and shall be construed, governed and enforced
in accordance with the laws of the State of                 .

Witnessed by                                                                      Date                                   

Witnessed by                                                                      Date                                   

Borrower                                                                            Date                             __  

Borrower                                                                            Date _________________

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