Promissory Note and Security Agreement: Definition, Example
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What is a Promissory Note And Security Agreement?
A promissory note and security agreement are legal documents often used to secure loans. For example, if a borrower defaults on their loan, the lender can claim their secured asset. This is an example of how a promissory note and security agreement work.
The use of something as collateral for debt repayment is common practice in lending. For example, a bank may hold a borrower’s car as collateral to ensure repayment of the loan. In addition, a promissory note and security agreement outline how long and under what terms a borrower must repay the loan and what will happen if they default on those payments.
Promissory Note Templates
Promissory Note And Security Agreement Sample
PROMISSORY NOTE AND SECURITY AGREEMENT
FOR VALUE RECEIVED, the undersigned, Kunekt Corporation (the "Debtor") promises to pay to the order of Mark Bruk or his assigns (the "Secured Party"), at such place as Secured Party may designate in writing, in lawful money of the United States of America and in immediately available funds, up to the full principal amount of $450,000 with interest at the rate of the Fed (U.S.) Prime Rate as set forth by the Wall Street Journal on its Web site at http://www.wsjprimerate.us/.
Principal and interest due hereunder shall be payable on demand. The unpaid principal balance of this note at any time shall be the total amount loaned hereunder by the Secured Party less the amount of prepayments of principal made hereon by or for the account of Debtor. Debtor shall have the right to prepay this note, in whole or in part, at any time without penalty.
The entire unpaid principal balance of this note shall immediately become due and payable, at the option of Secured Party with thirty days written notice to Debtor.
In the event Debtor fails to pay the unpaid principal balance of this note and interest due hereunder within thirty days after receipt of written notice by Secured Party ("Event of Default"), Secured Party may proceed to protect and enforce its rights by suit in equity and/or by action at law or by other appropriate proceedings. No delay on the part of Secured Party in the exercise of any power or right under this note, or under any other instrument executed pursuant thereto shall operate as a waiver thereof, nor shall a single or partial exercise of any other power or right preclude further exercise thereof. Notwithstanding anything to the contrary contained herein, if an Event of Default shall occur, all payments thereafter made hereunder shall be applied, at the option of Secured Party, first to costs of collection, and then to principal.
It is hereby specially agreed that if this note is placed into the hands of an attorney for collection, or if proved, established, or collected in any court, Debtor agrees to pay to Secured Party an amount equal to all expenses incurred in enforcing or collecting this note, including court costs and reasonable attorneys’ fees.
Except for the notice expressly provided herein, Debtor hereby waive presentment for payment, notice of nonpayment, demand, notice of demand, protest, notice of protest, diligence in collection, grace and without further notice hereby consents to renewals, extensions, or partial payments either before or after maturity.
All agreements between Debtor and Secured Party, whether now existing or hereafter arising and whether written or oral, are expressly limited so that in no contingency or event whatsoever shall the amount paid, or agreed to be paid, to Secured Party hereof for the use, forbearance, or detention of the money advanced to Debtor, or for the performance or payment on any covenant or obligation contained herein, exceed the maximum amount permissible under applicable federal or state law.
This note shall be governed by and construed in accordance with the laws of the State of Nevada and the United States of America. In the event any one or more of the provisions contained herein shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected thereby.
Grant of Security Interest
As a condition for Secured Party to agree to lend Debtor the funds contemplated herein, Debtor grant to Secured Party, a security interest in its property, tangible and intangible, including but not limited to: all accounts, now existing or subsequently arising; all contract rights of Debtor, now existing or subsequently arising; all accounts receivable, now existing or subsequently arising; all chattel paper, documents, and instruments related to accounts; all intellectual property, inventory, furniture, fixtures, equipment, and supplies now owned or subsequently acquired; and the proceeds, products, and accessions of and to any and all of the foregoing (the "Collateral").
This security interest is granted to secure the debt evidenced by this note and agreement and all costs and expenses incurred by Secured Party in the collection of the debt.
Secured Party, in its discretion, may file one or more financing statements under the Nevada Uniform Commercial Code, naming Debtor as a debtor and Secured Party as secured party and indicating the Collateral specified in this Promissory Note and Security Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate originals by their duly authorized officers or representatives.
BRUK /s/ MARK BRUK Signed: Name: Mark Bruk Date: September 24, 2009 | KUNEKT /s/ MARK BRUK Signed: Name: Mark Bruk Title: President Date: September 24, 2009 |
Reference:
Security Exchange Commission - Edgar Database, EX-10 2 ex10-1.htm PROMISSORY NOTE AND SECURITY AGREEMENT, Viewed January 27, 2022, View Source on SEC.
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Kenneth E. Gray, Jr. is a business and tax attorney who advises entrepreneurs, investors, and closely held companies on transactions, tax planning, disputes, and long-term wealth structuring. He focuses on helping clients make legally sound decisions that also make business sense. Ken’s practice includes business formation and restructuring, mergers and acquisitions, private investments and fundraising transactions, contract drafting and negotiation, and cross-border matters. He also maintains a significant tax practice, advising on federal and state structuring, specialty filings (including partnership, corporate, and non-resident matters), and representing clients in disputes before the U.S. Tax Court and other federal and state tribunals. In addition to his transactional work, Ken handles commercial and business litigation, including tax controversies, financial disputes, and partnership matters. His litigation experience informs how he structures deals and governance documents, with an eye toward preventing disputes before they arise. Ken also advises individuals and families on estate planning, trust formation, tax-efficient wealth transfer strategies, and probate administration, including planning involving closely held businesses and foreign assets. Before practicing law, Ken worked in banking and private equity, including managing a $5 billion emerging markets fund-of-funds portfolio at the U.S. Overseas Private Investment Corporation (OPIC) and serving in equity research at ABN AMRO. That financial background allows him to understand transactions from both the legal and capital perspective. He holds a J.D. from Georgetown University Law Center and an MBA from Yale University. He practices before the U.S. Tax Court, various state courts, and other federal courts.
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Attorney licensed and in good standing in the State of Ohio. Worked in the corporate division of a large law firm (Squire, Sanders & Dempsey), and as inside counsel for a technology company (America Online). Lived in 6 different states in a 12 year period. Took some time off of legal work to raise 4 kids. During that time kept active as a volunteer - Houston Volunteer Lawyers Program, Legislative chair of school board for 3 years, President of school PTA, PADS and local food pantry. Currently working as a Consultant for a health care company (Fast Pace Health). Looking to get back to transaction legal work. Can work remotely and travel to Ohio when necessary. Thank you.
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