SECURED DEMAND NOTE
TERMS OF NOTE
On demand, ________________________________, of
________________________ (address), referred to as maker, for value received
promises to pay to the order of ______________________________, of
____________________________________ (address), referred to as payee,
__________ (Amount) ($__________) 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:
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, default shall occur on the death, dissolution, termination of
existence, insolvency, or business failure of maker. The failure of maker to
pay __________ (his or her) 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 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 __________ (his or her) 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 __________ (his or her) 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
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.