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1. Promise to Pay. For value received, on [date], I (Debtor) promise to pay to the order of [name] (Creditor) the sum of ---------- dollars ($----------) with interest at ---------- percent (----------%) per annum. This Note is payable at the [Bank] located at [address].
2. Deposit of Collateral. Debtor has deposited with Creditor as collateral security for the payment of this debt [number] shares of the common stock of [name], having a market value on the date of this instrument of ---------- dollars ($----------) per share. Debtor has also delivered to Creditor stock powers signed by Debtor in blank.
3. Creditor's Right to Demand Further Collateral. If the total market value of the collateral security should decline to less than ---------- dollars ($----------), Creditor may demand that Debtor deposit additional collateral so that the total market value of the collateral at all times is at least ---------- dollars ($----------).
4. Acceleration of Maturity of Note Upon Debtor's Failure to Comply With Demand for Additional Collateral. Should Debtor fail to deliver additional collateral when demanded by Creditor in accordance with Paragraph 3 of this Note, this Note shall become immediately due and payable.
5. Creditor's Right to Sell Collateral. Should Debtor fail to pay this Note at maturity or at the time it becomes due and payable in accordance with Paragraph 4, Creditor may sell all or any part of the collateral without notice to Debtor.
6. Manner in Which Collateral Can Be Sold. Creditor can sell all or any part of the collateral on an open market through a broker or at public or private sale. Creditor may purchase the collateral at such sale, free of any claims that Debtor may have on it.
7. Disposition of Proceeds of Sale of Collateral. The proceeds derived from a sale of the collateral shall be distributed as follows:
(a) Costs and Expenses. The proceeds shall first be applied to the costs and expenses of selling the collateral and collecting the proceeds, including legal fees and broker's commission.
(b) Amount Due on Note. The remaining proceeds shall then be used to pay Creditor the sum due and payable on this Note.
(c) Surplus to Debtor. Should there be any balance remaining after this Note has been paid, the balance shall be turned over to Debtor.
8. Debtor Liable for Deficit. If, after the collateral has been sold and the sales proceeds distributed in accordance with Paragraph 7, the entire amount due on the Note has not been paid to Creditor, Debtor shall be liable to Creditor for the deficit.
This Section for Notary:
STATE OF -------)
) ss: [Date]
COUNTY OF ------)
On [Date] before me, [Name of Notary], notary, personally appeared [Name of Person(s) Involved], personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official seal.
[Name of Notary Public]
My commission expires: [date]