Promissory Note Template North Carolina

PROMISSORY NOTE (SECURED/UNSECURED)

DOCUMENT ID: PN-NC-2024-001
EFFECTIVE DATE: [Effective Date]
VERSION: 1.0
GOVERNING JURISDICTION: State of North Carolina

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LEGAL DISCLAIMER

This document is a template provided for informational purposes by legal counsel and does not constitute an attorney-client relationship. This Promissory Note is drafted to comply with general principles of North Carolina law (Chapter 25, Article 3 of the North Carolina General Statutes regarding Negotiable Instruments). Users are strongly advised to consult with local North Carolina counsel to ensure compliance with specific usury laws (N.C. Gen. Stat. § 24-1 et seq.), security interest perfection (UCC Article 9), and specific lending disclosure requirements.

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1. PARTIES

This Promissory Note (the "Note") is made and entered into as of the Effective Date by and between:

BORROWER: [Borrower Full Legal Name], an individual/entity with a principal address at [Borrower Address] ("Borrower").

LENDER: [Lender Full Legal Name], an individual/entity with a principal address at [Lender Address] ("Lender").

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2. PRINCIPAL SUM AND INTEREST

2.1 Principal Amount. Borrower promises to pay to the order of Lender the principal sum of $[Amount in USD] (the "Principal Amount").

2.2 Interest Rate. The unpaid principal balance of this Note shall bear interest at the rate of [Interest Rate]% per annum, calculated on the basis of a 365-day year, until the Principal Amount and all accrued interest are paid in full.

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3. REPAYMENT TERMS

3.1 Payment Schedule. Borrower shall pay the total sum of Principal and accrued interest in [Number of Installments] consecutive [monthly/quarterly] installments of $[Installment Amount], commencing on [Start Date] and continuing on the [Day] of each subsequent month until [Maturity Date] (the "Maturity Date"), at which time the entire remaining balance shall be due and payable.

3.2 Method of Payment. All payments shall be made in lawful money of the United States by wire transfer, certified check, or other immediately available funds to the account designated in writing by Lender.

3.3 Prepayment. Borrower reserves the right to prepay the principal balance in whole or in part at any time without penalty. Any prepayment shall first be applied to accrued interest and then to the principal.

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4. DEFAULT AND ACCELERATION

4.1 Events of Default. An "Event of Default" shall occur if: (a) Borrower fails to make any payment when due and such failure continues for [Number, e.g., 10] days after written notice; (b) Borrower files for bankruptcy or insolvency; or (c) Borrower breaches any other material term of this Note.

4.2 Acceleration. Upon the occurrence of an Event of Default, the Lender may, at its option, declare the entire unpaid principal balance and all accrued interest immediately due and payable, without presentment, demand, protest, or further notice of any kind.

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5. LATE CHARGES AND COLLECTION COSTS

5.1 Late Fee. If any payment is not received within [Number] days of the due date, Borrower shall pay a late fee equal to [Percentage]% of the overdue amount to compensate for administrative costs.

5.2 Collection Costs. In the event of default, Borrower agrees to pay all reasonable attorney fees and costs of collection incurred by Lender, to the extent permitted by N.C. Gen. Stat. § 6-21.2.

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6. GOVERNING LAW AND DISPUTE RESOLUTION

6.1 Governing Law. This Note shall be governed by and construed in accordance with the laws of the State of North Carolina, without regard to its conflict of law principles.

6.2 Jurisdiction. Any legal action or proceeding arising under this Note shall be brought exclusively in the courts of [County Name] County, North Carolina. Borrower and Lender hereby consent to the personal jurisdiction and venue of such courts.

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7. MISCELLANEOUS

7.1 Entire Agreement. This Note constitutes the entire agreement between the parties regarding the subject matter hereof and supersedes all prior agreements.

7.2 Severability. If any provision of this Note is held to be invalid or unenforceable, the remaining provisions shall continue to be valid and enforceable to the fullest extent permitted by law.

7.3 Amendment. No amendment or waiver of any provision of this Note shall be effective unless in writing and signed by both parties.

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8. EXECUTION

FOR [BORROWER NAME]:
Signature: _____________________________________
Printed Name: [Authorized Signatory Name]
Title: [Title / Role]
Date: [Date]

FOR [LENDER NAME]:
Signature: _____________________________________
Printed Name: [Authorized Signatory Name]
Title: [Title / Role]
Date: [Date]

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STEP-BY-STEP EXECUTION & FILING GUIDE

1. Drafting: Replace all bracketed [ ] text with verified legal information. Ensure the "Principal Amount" and "Interest Rate" comply with North Carolina usury limits; generally, contracts for loans under $25,000 may be subject to stricter interest caps under N.C.G.S. § 24-1.1.
2. Verification: Confirm the legal status of the entity (LLC, Corp, etc.) via the North Carolina Secretary of State’s "Business Registration Search" to ensure the correct legal name is used.
3. Authority: Verify that the signatory has the actual authority (via Board Resolution or Operating Agreement) to bind the entity to a debt instrument.
4. Digital Signature: Utilize an e-signature platform (e.g., DocuSign, Adobe Sign, or HelloSign) that provides a digital audit trail and "Certificate of Completion."
5. Record Retention:
   • Originals: The physical or electronically signed original should be retained by the Lender in a fireproof or secure digital vault.
   • Perfection: If this note is secured by collateral, the Lender must file a UCC-1 Financing Statement with the North Carolina Secretary of State to perfect the security interest. Failure to do so may result in the loss of priority over other creditors.