Promissory Note Template California Word

INSTITUTIONAL-GRADE SECURED PROMISSORY NOTE

Document ID: PN-CA-2026-V1
Effective Date: [Effective Date]
Jurisdiction: State of California

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1. STATUTORY & LEGAL COMPLIANCE NOTICE

DISCLAIMER: This Promissory Note is drafted to conform with the applicable provisions of the California Civil Code, the California Commercial Code, and California usury laws (Article XV of the California Constitution). This document is an institutional-grade legal instrument. Because loan transactions involve complex financial, regulatory, and tax implications—including potential application of federal and state securities laws, usury exemptions, and real property security laws (such as California's One-Form-of-Action Rule and Power of Sale foreclosure procedures)—the Maker and Holder are advised to retain independent legal counsel and licensed financial advisors prior to execution.

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2. PARTIES & RECITALS

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

• MAKER (Borrower): [Maker Full Legal Name], a [State of Incorporation/Organization, e.g., California corporation / individual], having its principal place of business / residence at [Principal Address] (hereinafter referred to as the "Maker").
• HOLDER (Lender): [Holder Full Legal Name], a [State of Incorporation/Organization, e.g., California corporation / individual], having its principal place of business / residence at [Principal Address] (hereinafter referred to as the "Holder").

RECITALS:
WHEREAS, Maker has requested that Holder extend credit, and Holder has agreed to lend to Maker the principal sum set forth below, upon the terms and conditions set forth herein; and
WHEREAS, Maker acknowledges receipt of the full principal amount and agrees to repay the same to Holder together with interest and all other charges in accordance with the terms of this Note.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Maker covenants and agrees as follows:

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3. EXHAUSTIVE OPERATIVE CLAUSES & LEGAL TERMS

Section 1. Principal Amount and Interest Rate

1.1 Principal Sum: For value received, Maker unconditionally promises to pay to the order of Holder the principal sum of [Amount in USD] U.S. Dollars ($[Numeric Amount]) (the "Principal Balance"), together with interest thereon calculated in accordance with the terms of this Note. 1.2 Interest Rate: Outstanding principal under this Note shall bear interest at the rate of [Interest Rate, e.g., 8.5]% per annum (computed on the basis of a 365-day year and the actual number of days elapsed), or the maximum rate permitted by applicable California usury law, whichever is less. 1.3 Interest Calculation: Interest shall commence on the Effective Date and shall continue to accrue on the unpaid Principal Balance until paid in full.

Section 2. Repayment Terms and Maturity

2.1 Maturity Date: The entire unpaid Principal Balance, together with all accrued and unpaid interest and any other fees, costs, or charges owing hereunder, shall be due and payable in full on [Maturity Date] (the "Maturity Date"), unless accelerated earlier pursuant to the terms of this Note. 2.2 Installment Payments (If Applicable):

• [Select Option A (Lump Sum) or Option B (Amortized)]
• Option A (Bullet/Lump Sum): Principal and accrued interest shall be payable in a single balloon payment on the Maturity Date.
• Option B (Installments): Maker shall make consecutive monthly installments of principal and interest in the amount of [Monthly Payment Amount] U.S. Dollars ($[Numeric Amount]__) on the [Day of Month, e.g., first] day of each calendar month, commencing on [First Payment Date], and continuing until the Maturity Date, at which time the remaining indebtedness shall be paid in full. 2.3 Application of Payments: All payments made on account of this Note shall be applied first to the payment of any late charges or collection costs incurred by Holder, second to the payment of accrued and unpaid interest, and third to the reduction of the Principal Balance. 2.4 Manner of Payment: All payments of principal and interest shall be made in lawful money of the United States of America in immediately available funds, delivered to Holder at the address set forth above, or via electronic wire transfer to an account designated in writing by Holder. If any payment due date falls on a Saturday, Sunday, or legal holiday in the State of California, the payment shall be due on the next succeeding business day.

Section 3. Prepayment Privileges

3.1 Right to Prepay: Maker reserves the right to prepay this Note, in whole or in part, at any time and from time to time, without premium or penalty. 3.2 Notice of Prepayment: Any partial prepayment shall be applied against the principal installments last maturing or, if structured as a lump-sum note, shall reduce the outstanding Principal Balance without relieving Maker of its obligation to make scheduled installment payments (if applicable), unless Holder agrees otherwise in writing.

Section 4. Default, Acceleration, and Late Charges

4.1 Late Charges: If any payment required under this Note is not received by Holder within [Number, e.g., ten (10)] calendar days after its due date, Maker shall pay to Holder a late charge equal to [Late Fee Percentage, e.g., five percent (5%)] of the overdue payment, or the maximum amount permitted by applicable law, to cover the extra administrative expenses involved in handling delinquent payments. 4.2 Events of Default: The occurrence of any one or more of the following shall constitute an immediate "Event of Default" under this Note:

• (a) Failure to Pay: Maker fails to pay any installment of principal, interest, or late charges within [Number] days of when due;
• (b) Breach of Covenants: Maker fails to perform or observe any other material covenant, term, or condition contained in this Note or any associated security agreement;
• (c) Insolvency & Bankruptcy: Maker makes an assignment for the benefit of creditors, files a voluntary petition in bankruptcy, is adjudicated bankrupt or insolvent, has entered against it an order for relief in any bankruptcy or insolvency proceeding, or applies for or consents to the appointment of a receiver, trustee, or liquidator for all or a substantial part of its assets;
• (d) Attachment or Judgment: Execution or attachment is levied against Maker's assets, or a final judgment in excess of [Dollar Amount] is entered against Maker and remains unstayed or unsatisfied for more than [Number] days;
• (e) Misrepresentation: Any representation or warranty made by Maker in connection with this Note proves to have been materially false or misleading when made. 4.3 Acceleration: 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 expressly provided herein), Holder may, at its sole option, declare the entire unpaid Principal Balance of this Note, together with all accrued and unpaid interest thereon and all other sums due hereunder, to be immediately due and payable without presentment, demand, protest, or notice of any kind, all of which are hereby expressly waived by Maker. 4.4 Default Interest: Upon the occurrence and during the continuance of an Event of Default, the outstanding Principal Balance shall bear interest at the lesser of [Default Interest Rate, e.g., eighteen percent (18%)] per annum or the maximum rate permitted by California law (the "Default Rate"), from the date of default until the obligation is paid in full.

Section 5. Security and Collateral (If Applicable)

5.1 Security Interest: To secure the prompt and complete payment and performance of all obligations of Maker under this Note, Maker hereby grants to Holder a security interest in [Description of Collateral, e.g., all inventory, equipment, accounts receivable, and general intangibles of Maker, whether now owned or hereafter acquired] (the "Collateral"), pursuant to a separate Security Agreement of even date herewith. 5.2 Perfection: Maker authorizes Holder to file one or more Uniform Commercial Code (UCC) financing statements in the appropriate filing offices of the State of California to perfect Holder's security interest in the Collateral.

Section 6. Waivers and Consents

6.1 Waiver of Presentment: Maker and any endorsers, guarantors, and sureties of this Note severally waive presentment for payment, demand, protest, notice of protest, notice of dishonor, 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 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 Attorneys’ Fees

7.1 Enforcement Costs: If this Note is placed in the hands of an attorney for collection, or if is enforced through any judicial proceeding, bankruptcy proceeding, arbitration, or mediation, Maker promises to pay to Holder all reasonable costs and expenses incurred by Holder, including, without limitation, reasonable attorneys’ fees, court costs, expert witness fees, and collection agency fees, whether or not litigation is actually commenced.

Section 8. Governing Law and Jurisdiction

8.1 California 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, enforced under, and construed 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 and Federal courts located in [County Name, e.g., Los Angeles County], 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 litigation in said courts and agrees not to plead or claim in any such court that such litigation has been brought in an inconvenient forum.

Section 9. Miscellaneous Provisions

9.1 Successors and Assigns: This Note shall be binding upon Maker and Maker’s heirs, legal representatives, successors, and permitted assigns, and shall insure to the benefit of Holder and Holder’s successors and assigns. Maker may not assign or transfer its obligations under this Note without the prior written consent of Holder. Holder may freely assign or transfer this Note in whole or in part. 9.2 Amendments and Waivers: No amendment, modification, discharge, or termination of any provision of this Note shall be valid unless in writing and signed by both Maker and Holder. 9.3 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, legal, and enforceable. The invalidity, illegality, or unenforceability of any provision shall not affect the validity or enforceability of any other provision of this Note, which shall remain in full force and effect. 9.4 Time of Essence: Time is of the essence with respect to every provision of this Note requiring the performance of obligations by Maker. 9.5 Entire Agreement: This Note constitutes the entire agreement between Maker and Holder with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations, and warranties, both written and oral, with respect to such subject matter.

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4. EXECUTION & FORMAL SIGNATURE BLOCKS

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

FOR MAKER ([Maker Full Legal Name]):

Signature: _____________________________________
Printed Name: [Authorized Signatory Name]
Title: [Title / Role, e.g., Chief Executive Officer]
Company: [Maker Full Legal Name]
Date: [Date]

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FOR HOLDER ([Holder Full Legal Name]):

Signature: _____________________________________
Printed Name: [Authorized Signatory Name]
Title: [Title / Role, e.g., Managing Director]
Company: [Holder Full Legal Name]
Date: [Date]

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5. STEP-BY-STEP EXECUTION & FILING GUIDE

1. Document Customization:

   • Open this document in Microsoft Word or Google Docs.
   • Locate all bracketed text fields (e.g., [Maker Full Legal Name], [Amount in USD], [Maturity Date]) and replace them with accurate, verified factual data. Ensure numerical and written dollar amounts match precisely.
   • Review Section 2.2 to confirm whether the loan is structured as a lump-sum (bullet) repayment or installment payments, and delete the unused option.

2. Signatory Authority Verification:

   • For Entities (Corporations, LLCs, Partnerships): Verify that the individual signing on behalf of Maker or Holder holds actual or apparent authority (e.g., CEO, Managing Member, or authorized corporate resolution). If the transaction involves substantial sums, obtain a formal Corporate Resolution or Certificate of Secretary authorizing the execution of this Note.
   • For Individuals: Ensure the individual signs in their personal capacity and verify government-issued identification if required by internal compliance protocols.

3. Digital Execution (DocuSign / Adobe Sign):

   • Upload the finalized document into an institutional-grade e-signature platform compliant with the federal ESIGN Act and California Uniform Electronic Transactions Act (UETA).
   • Configure signing fields for electronic signatures, printed names, titles, and dates. Ensure audit trails are retained.

4. Security & Record Retention:

   • If a security interest is granted (Section 5), immediately prepare and file a UCC-1 Financing Statement with the California Secretary of State.
   • Store the fully executed PDF of this Note in a secure, encrypted corporate legal repository or vault. Retain original wet-ink signed copies (if applicable under institutional policy) for the statutory limitations period following full repayment.