Promissory Note Template California Pdf

SECURED PROMISORY NOTE

Document ID: PN-CA-202X-01
Effective Date: [Effective Date]
Governing Jurisdiction: State of California

---

1. STATUTORY & LEGAL COMPLIANCE NOTICE

CLINICAL DISCLAIMER: This Promissory Note is drafted to conform with the applicable provisions of the California Civil Code, the California Commercial Code, and relevant California usury laws. Promissory notes involve complex legal, financial, and tax obligations. The user must verify all inputs and ensure that the interest rates and terms comply with both California state law and applicable federal lending regulations, including the Truth in Lending Act (TILA) and the Dodd-Frank Wall Street Reform and Consumer Protection Act, if applicable. Parties are strongly advised to retain independent legal counsel and licensed financial advisors prior to executing this instrument.

---

2. PARTIES & RECITALS

This Secured Promissory Note (the "Note") is entered into as of [Effective Date] (the "Effective Date"), by and between:

MAKER (Debtor):
[Debtor Full Legal Name], with a principal place of business / residence located at [Debtor Principal Address] (hereinafter referred to as the "Maker"), and

HOLDER (Creditor):
[Creditor Full Legal Name], with a principal place of business / residence located at [Creditor Principal Address] (hereinafter referred to as the "Holder").

RECITALS:
WHEREAS, the Maker desires to borrow the principal sum from the Holder, and the Holder is willing to lend the same to the Maker, upon the terms and conditions set forth herein; and
WHEREAS, to secure the prompt and complete payment and performance of all obligations of the Maker under this Note, the Maker has agreed to grant the Holder a security interest in certain collateral pursuant to a separate Security Agreement (if applicable) and the terms of this Note.

NOW, THEREFORE, for value received, the receipt and sufficiency of which are hereby acknowledged, the Maker covenants and agrees as follows:

---

3. EXHAUSTIVE OPERATIVE CLAUSES & LEGAL TERMS

Section 1. Principal Amount and Interest Rate

1.1 Principal Sum: For value received, the Maker promises to pay to the order of the Holder the principal sum of [Amount in USD] United States Dollars ($[Numeric Amount]), together with interest thereon calculated in accordance with the terms of this Note.
1.2 Interest Rate: The unpaid principal balance of this Note shall bear interest at the rate of [Interest Rate Percentage]% per annum, calculated on the basis of a 365-day year and the actual number of days elapsed, or the maximum rate permitted by applicable California law, whichever is less.
1.3 Usury Savings Clause: It is the intention of the Maker and the Holder to conform strictly to applicable usury laws. If any provision of this Note would cause the interest rate charged, or any other charges levied, to exceed the maximum rate permitted by California law, then such provision shall be automatically construed as being reduced to the maximum legal rate, and any excess amount collected shall be automatically applied to the reduction of the principal balance of this Note or refunded to the Maker.

Section 2. Payment Terms, Maturity Date, and Prepayment

2.1 Maturity Date: The entire outstanding principal balance of this Note, together with all accrued and unpaid interest and any other fees or charges hereunder, shall be due and payable in full on [Maturity Date] (the "Maturity Date"), unless accelerated earlier in accordance with the default provisions of this Note.
2.2 Installment Payments (If Applicable): The Maker shall pay the principal and interest in installments as follows: [Insert payment schedule, e.g., Monthly installments of $X.XX commencing on [Date], and continuing on the same day of each month thereafter until paid in full].
2.3 Application of Payments: All payments made under this Note shall be applied first to any collection costs, expenses, or late charges then due, second to accrued and unpaid interest, and third to the reduction of the principal balance.
2.4 Prepayment: The Maker shall have the right to prepay the principal amount of this Note, in whole or in part, at any time without penalty or premium. Any partial prepayment shall be applied against the principal installments in the inverse order of their maturity and shall not postpone the due date of any subsequent installment payments unless agreed upon in writing by the Holder.

Section 3. Default, Acceleration, and Late Charges

3.1 Events of Default: The occurrence of any one or more of the following events shall constitute an "Event of Default" under this Note:
(a) Failure of the Maker to pay any principal, interest, or other sum due under this Note within [Number, e.g., 10] calendar days of its due date;
(b) The filing of a petition under any bankruptcy, insolvency, or debtor relief law by or against the Maker, or the appointment of a receiver, trustee, or liquidator for all or a substantial part of the Maker’s assets;
(c) The making of a general assignment for the benefit of the Maker’s creditors;
(d) Any material breach, misrepresentation, or default by the Maker under any security agreement, guaranty, or other document executed in connection with this Note.
3.2 Acceleration of Maturity: Upon the occurrence of any Event of Default, and at any time thereafter (unless such Event of Default is cured within any applicable cure period), the Holder may, at its option, declare the entire unpaid principal balance of this Note, together with all accrued interest thereon and all other sums due, immediately due and payable without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived by the Maker.
3.3 Late Charges: If any payment is not received by the Holder within [Number, e.g., 10] calendar days after its due date, the Maker shall pay to the Holder a late charge equal to [Late Charge Percentage, e.g., 5]% of the overdue payment, or the maximum amount permitted by applicable California law, to cover the extra expense involved in handling delinquent payments.
3.4 Default Interest Rate: Upon the occurrence and during the continuance of an Event of Default, the outstanding principal balance of this Note shall bear interest at the rate of [Default Interest Rate, e.g., 18]% per annum, or the maximum rate permitted by California law, from the date of default until the obligation is paid in full.

Section 4. Security and Collateral (If Applicable)

4.1 Grant of Security Interest: To secure the full and punctual payment of all obligations of the Maker under this Note, the Maker hereby pledges, assigns, and grants to the Holder a continuing security interest in all right, title, and interest of the Maker in the property described in Exhibit A attached hereto (the "Collateral").
4.2 Further Assurances: The Maker agrees to execute and deliver to the Holder such financing statements (including UCC-1 financing statements), security agreements, and other documents as the Holder may reasonably request to perfect, protect, and maintain the priority of the Holder's security interest in the Collateral under the California Commercial Code.

Section 5. Representations and Warranties

The Maker represents and warrants to the Holder that:
5.1 Authority: The Maker has full power, legal capacity, and authority to enter into this Note and to perform all obligations hereunder. The execution and delivery of this Note have been duly authorized by all necessary corporate, partnership, or organizational action.
5.2 Enforceability: This Note constitutes a legal, valid, and binding obligation of the Maker, enforceable against the Maker in accordance with its terms, subject to bankruptcy, insolvency, and equitable principles.
5.3 No Conflicts: The execution, delivery, and performance of this Note do not and will not violate any provision of the Maker's organizational documents, any applicable law, or any material agreement to which the Maker is a party.

Section 6. Waivers and Consents

6.1 Waiver of Presentment: The Maker, and all endorsers, sureties, and guarantors hereof, jointly and severally waive presentment, demand, protest, notice of dishonor, notice of intent to accelerate, notice of acceleration, and all other notices or demands in connection with the delivery, acceptance, performance, default, or enforcement of this Note.
6.2 No Waiver by Holder: No failure or delay on the part of the Holder in exercising any right, power, or privilege under this Note shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, power, or privilege.

Section 7. Collection Costs and Attorney’s Fees

If any Event of Default occurs or if this Note is placed in the hands of an attorney for collection, or if suit or legal action is instituted to collect any sums due hereunder, the Maker promises and agrees to pay to the Holder all reasonable costs and expenses of collection, including, without limitation, reasonable attorneys’ fees, court costs, and related legal expenses, whether incurred before trial, at trial, upon appeal, or in any bankruptcy proceedings, to the maximum extent permitted by California law.

Section 8. Governing Law, Jurisdiction, and Venue

8.1 Governing Law: This Note, and all claims or causes of action (whether in contract, tort, or statute) that may be based upon, arise out of, or relate to this Note, shall be governed by, and enforced in accordance with, the internal laws of the State of California, without regard to its conflict of laws principles.
8.2 Consent to Jurisdiction: Each party irrevocably and unconditionally submits to the exclusive jurisdiction of the state courts located in [County Name, e.g., Los Angeles County], California, or the United States District Court for the [District Name, e.g., Central District of California], for any action, suit, or proceeding arising out of or relating to this Note. Each party waives any objection to the laying of venue of any such action or proceeding in such courts.

Section 9. Miscellaneous Provisions

9.1 Amendments and Waivers: No modification, amendment, or waiver of any provision of this Note shall be effective unless the same shall be in writing and signed by both the Maker and the Holder.
9.2 Severability: If any provision of this Note is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it valid and enforceable, and the remaining provisions of this Note shall remain in full force and effect.
9.3 Entire Agreement: This Note constitutes the entire agreement between the Maker and the Holder with respect to the subject matter hereof and supersedes all prior oral or written negotiations, commitments, and understandings.
9.4 Successors and Assigns: This Note shall be binding upon and inure to the benefit of the Maker and the Holder and their respective heirs, legal representatives, successors, and permitted assigns. The Holder may assign or transfer this Note, in whole or in part, without the consent of the Maker. The Maker may not assign or transfer its obligations under this Note without the prior written consent of the Holder.
9.5 Notices: All notices, demands, or other communications required or permitted under this Note shall be in writing and shall be deemed duly given if delivered personally, sent by nationally recognized overnight courier service, or mailed by certified or registered mail, postage prepaid, return receipt requested, addressed to the respective addresses set forth above or to such other address as either party may designate by notice to the other.

---

4. EXECUTION & FORMAL SIGNATURE BLOCKS

IN WITNESS WHEREOF, the Maker has executed and delivered this Secured Promissory Note as of the Effective Date written above.

FOR MAKER (DEBTOR):
Signature: _____________________________________
Printed Name: [Debtor Authorized Signatory Name]
Title: [Title / Role]
Company (if applicable): [Debtor Company Legal Name]
Date: [Date]

---

FOR HOLDER (CREDITOR):
Signature: _____________________________________
Printed Name: [Creditor Authorized Signatory Name]
Title: [Title / Role]
Company (if applicable): [Creditor Company Legal Name]
Date: [Date]

---

5. STEP-BY-STEP EXECUTION & FILING GUIDE

Step 1: Document Customization

1. Open this document in Microsoft Word or Google Docs.
2. Locate all bracketed placeholder text (e.g., [Company Full Legal Name], [Amount in USD], [Effective Date]) and replace them with accurate, verified factual data. Do not leave any uncompleted bracketed fields.
3. Review Section 1.2 ([Interest Rate Percentage]) and ensure the selected interest rate complies with California usury limits (Article XV of the California Constitution and applicable statutory enactments).

Step 2: Verification of Signatory Authority

1. Verify that the individual signing on behalf of the Maker possesses proper legal capacity or corporate authorization (e.g., Board of Directors resolution, Operating Agreement authority, or valid Power of Attorney).
2. Confirm the legal spelling of both the Maker's and Holder's names against official state records (such as the California Secretary of State business registry).

Step 3: Execution via Wet Ink or Digital Signature

1. Digital Execution: Upload the finalized document into an e-signature platform compliant with the ESIGN Act and California Uniform Electronic Transactions Act (UETA), such as DocuSign or Adobe Sign.
2. Witness / Notarization (Optional but Recommended): While California law does not strictly require promissory notes to be notarized for basic validity, having the Maker’s signature acknowledged before a California Notary Public significantly deters forgery claims and simplifies judicial enforcement in the event of default.

Step 4: Collateral Perfection & Record Retention

1. If collateral is secured under Section 4, immediately prepare and file a UCC-1 Financing Statement with the California Secretary of State to perfect the Holder's security interest.
2. Retain the fully executed original Promissory Note in a secure, fireproof corporate vault or digital document management system with encrypted backups for the entire statutory limitations period under California law (typically four (4) years from the date of final maturity or breach under California Code of Civil Procedure § 337).