Sample Open-Ended Promissory Note

The undersigned (the Borrower) promises to pay to the order of

______________________________ (the Lender) the sum of _______ ($ ) Dollars,
together with interest thereon at the rate of ____ % per annum on the unpaid
alan!e"
This #ote is e$e!uted in return for the following e$tension of !redit from the Lender
to the Borrower%
The Borrower and Lender agree that this #ote shall automati!ally go&ern any
future e$tension of !redit, in any form, from the Lender to the Borrower, if su!h
future e$tension of !redit e$pressly states that it is su'e!t to this #ote"
The prin!ipal and interest shall e payale as follows (state whether payment is (n
Demand, or state payment terms)%
)ll payments shall e *rst applied to interest and late !harges, and the alan!e to
prin!ipal" This note may e prepaid, at any time, in whole or in part, without
penalty" This note shall e at the option of any holder thereof immediately due and
payale upon the o!!urren!e of any of the following% +ailure to ma,e any payment
due hereunder within on or efore its due date- rea!h of any !ondition of any
se!urity interest, mortgage, loan agreement, pledge agreement or guarantee
granted as !ollateral se!urity for this note- rea!h of any !ondition of any loan
agreement, se!urity agreement or mortgage, if any, ha&ing a priority o&er any loan
agreement, se!urity agreement or mortgage on !ollateral granted, in whole or in
part, as !ollateral se!urity for this note- upon the death, in!apa!ity, dissolution or
li.uidation of any of the undersigned, or any endorser, guarantor or surety hereto-
upon the *ling y any of the undersigned of an assignment for the ene*t of
!reditors, an,rupt!y or other form of insol&en!y, or y su/ering an in&oluntary
petition in an,rupt!y or re!ei&ership not &a!ated within thirty (01) days"
2n the e&ent this note shall not e in default and pla!ed for !olle!tion, then the
undersigned agree to pay all reasonale attorney fees and !osts of !olle!tion"
3ayments not made within *&e (4) days of the due date shall e su'e!t to a late
!harge of _____% of said payment" )ll payments hereunder shall e made to su!h
address as may from time to time e designated y any holder"
The undersigned and all other parties to this note, whether as endorsers,
guarantors or sureties, agree to remain fully ound until this note shall e fully
paid and wai&e demand, presentment and protest and all noti!es hereto and
further agree to remain ound notwithstanding any e$tension, modi*!ation,
wai&er, or other indulgen!e or dis!harge or release of any oligor hereunder or
e$!hange, sustitution, or release of any !ollateral granted as se!urity for this
note" #o modi*!ation or indulgen!e y any holder hereof shall e inding unless in
writing- and any indulgen!e on any one o!!asion shall not e an indulgen!e for any
other or future o!!asion" )ny modi*!ation or !hange in terms, hereunder granted
y any holder hereof, shall e &alid and inding upon ea!h of the undersigned,
notwithstanding the a!,nowledgment of any of the undersigned, and ea!h of the
undersigned does herey irre&o!aly grant to ea!h of the others a power of
attorney to enter into any su!h modi*!ation on their ehalf" The rights of any
holder hereof shall e !umulati&e and not ne!essarily su!!essi&e" This note shall
ta,e e/e!t as a sealed instrument and shall e !onstrued, go&erned and enfor!ed
in a!!ordan!e with the laws of the 5tate of _________________________"
The Borrower may prepay this #ote in whole or in part without penalty" 2n the
e&ent any payment due hereunder is not paid when due, the entire alan!e shall e
immediately due and payale upon demand of the holder" 6pon default, the
undersigned shall pay all reasonale attorney fees and !osts ne!essary for the
!olle!tion of this #ote"
5igned under seal this _____day of _________, 71__"
____________________________________________________________________________________
By%_________________________________________________________________________________
_
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