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Secured Demand Note
(Under the Uniform Commercial Code)
TERMS OF NOTE
On demand, [maker], of [address], referred to as maker, for value received promises to pay to the order of [Payee], of [Address], referred to as payee, [$------] at [Address], with interest from the date of this note until paid at the rate of [--%] percent per annum.
To secure payment of this note and all other obligations maker owes to payee, whether the obligations are now existing or are hereafter created, whether direct or indirect, whether absolute or contingent, and whether due or to become due, maker pledges to payee a security interest in the following property, referred to as collateral:
Market value as of description [Date]
If payee should at any time decide that the collateral is not sufficient or has declined or may decline in value, payee may call for additional collateral. Maker shall furnish the additional collateral within [--] days after payee requests the additional collateral. The call for additional collateral shall be made by [certified or registered] mail, with postage prepaid and return receipt requested, which shall be mailed to the last known address of maker.
DEFAULT; NOTICE ON DEFAULT
A default by maker shall occur on the failure of maker to comply with any of the promises contained in this note or on the failure of maker to perform any other obligation of maker to payee. Furthermore, a default shall occur on the death, dissolution, termination of existence, insolvency, or business failure of maker.
The failure of maker to pay [Name] debts as they mature shall result in a default by maker, as will the appointment of a receiver for any part of the collateral, or an assignment for the benefit of creditors of maker, or the commencement against maker or an indorser or guarantor of this note of a proceeding under the Federal Bankruptcy Act. If a default occurs, payee shall have the rights and remedies of a secured party under the [Uniform Commercial Code] of [state], including without limitation the right to sell the collateral.
Unless the collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market, payee shall send reasonable notice to maker of the time and place of any public sale or reasonable notice of the time after which any private sale or other intended disposition of the collateral is to be made. The notice requirement shall be met if notice is sent by [Certified or Registered] mail, postage prepaid with return receipt requested, to the last known address of maker at least [--] days before the time of the sale or disposition of the collateral.
TRANSFER OF TITLE OF COLLATERAL
Payee, at [Name] option, may transfer at any time to payee or payees nominee any collateral pledged under this note as security. Payee may apply the transferred property to the payment of the principal or interest due on this note or due on any obligation secured by this note.
RIGHT OF PAYEE TO DEAL WITH COLLATERAL
Payee may at [Name] option demand, sue for, collect, or make any compromise or settlement payee deems desirable with reference to collateral held under this note.
EFFECT OF WAIVER OF RIGHTS BY PAYEE
No delay on the part of payee in exercising any right under this note shall operate as a waiver of the right or of any other right under this note. The waiver of a right on any one occasion shall not be construed as the waiver of the right or remedy on any future occasion.
WAIVER OF PRESENTMENT, PROTEST, AND NOTICE OF DISHONOR
Every maker, indorser, and guarantor of this note or the underlying agreement on which this note is based waives presentment, protest, demand, notice of dishonor or default or notice of any kind with respect to this note or any guaranty of this note or the performance of the agreement on which this note is based.
EFFECT OF GRANTING EXTENSION OR RELEASE
No extension of this note, no release of any collateral given for this note or any guaranty of this note, no release of any person, primarily or secondarily liable on this note, and no delay in the enforcement of payment of this note or any guaranty of this note shall affect the liability of the maker, or any indorser or guarantor of this note.
COSTS OF COLLECTION
Maker shall pay on demand of payee all costs of collection, including reasonable attorney fees, incurred by payee in enforcing collection of this note on default.
DEFINITION OF PAYEE
The word payee shall mean the payee or other indorsee of this note who is in possession of this note or the bearer of this note, if this note is payable to bearer.
Name of Maker
Name of Payee
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]