Legal Note Packet

LEGAL NOTE PACKET

This Legal Note Packet (the Note) is made effective as of by and between Borrower Name: and Lender Name: .

RECITALS

WHEREAS, Borrower has requested financing from Lender in the principal amount of (the Principal); and

WHEREAS, Lender is willing to make the loan upon the terms and subject to the conditions set forth herein, including the borrower's execution of this Note and any related security instruments.

WHEREAS, the parties intend this document to set forth the terms of the indebtedness, remedies upon default, and ancillary covenants between Borrower and Lender.

NOW, THEREFORE

In consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. DEFINITIONS

Capitalized terms used in this Note shall have the meanings assigned to them in this Section unless the context requires otherwise. "Principal" means the outstanding principal amount set forth above. "Maturity Date" means .

2. PROMISE TO PAY

Borrower promises to pay to the order of Lender the Principal, together with interest on the unpaid Principal at the rate of per annum, computed on a 365-day year basis, until paid in full.

3. PAYMENT TERMS

Payments of principal and interest shall be due in accordance with the following schedule: . Regular periodic payment amount: . Payment due day each month: .

4. PREPAYMENT

Borrower may prepay the Principal in whole or in part at any time without penalty, except as otherwise set forth below. Optional prepayment shall be applied first to accrued interest and then to Principal. Prepayment notice required: days.

5. DEFAULT; REMEDIES; ACCELERATION

The occurrence of any of the following shall constitute an Event of Default: (a) Borrower's failure to pay any payment within days after its due date; (b) Borrower's insolvency, bankruptcy filing, or appointment of a receiver; or (c) Borrower's breach of any material representation, warranty or covenant contained herein.

Upon an Event of Default, Lender may, at its option, declare the entire unpaid Principal and accrued interest immediately due and payable, pursue all remedies at law or in equity, including foreclosure if security is granted, and charge a default interest rate of per annum on the unpaid balance.

6. SECURITY

To secure payment of the obligations under this Note, Borrower hereby grants to Lender a security interest in the following collateral:

Borrower agrees to execute and deliver such additional instruments as Lender may reasonably require to perfect and maintain the security interest, and to pay all costs associated with perfection.

7. REPRESENTATIONS AND WARRANTIES

Borrower represents and warrants to Lender that: (a) Borrower is duly organized, validly existing and in good standing under the laws of its jurisdiction; (b) the execution and delivery of this Note has been duly authorized by all necessary action; (c) this Note constitutes a valid and binding obligation enforceable in accordance with its terms; and (d) no default or event which with notice or lapse of time would constitute a default has occurred.

8. COVENANTS

Until payment in full, Borrower shall (a) maintain the collateral in good order and condition, (b) not permit any lien or encumbrance on the collateral other than as permitted by Lender, and (c) provide Lender with financial statements or other information upon reasonable request.

9. TAXES AND EXPENSES

Borrower shall pay all reasonable costs and expenses (including attorneys' fees) incurred by Lender in connection with the enforcement of this Note following an Event of Default. Borrower shall also be responsible for any taxes, filings, or recording fees required in connection with the security instruments.

10. NOTICES

Any notice required or permitted under this Note shall be in writing and shall be deemed given when delivered personally, by nationally recognized overnight courier, or three (3) business days after deposit in the United States mail, postage prepaid, addressed as follows:

11. ASSIGNMENT

Lender may assign or transfer this Note or any interest herein without Borrower's consent. Borrower may not assign its obligations under this Note without Lender's prior written consent, which consent shall not be unreasonably withheld where appropriate assurances of performance are provided.

12. MISCELLANEOUS

Governing Law: This Note shall be governed by and construed in accordance with the laws of the state of , without regard to conflict of laws principles.

Entire Agreement: This Note, together with any security instruments and other documents executed in connection herewith, constitutes the entire agreement between the parties relating to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral.

Severability: If any provision of this Note is held invalid or unenforceable, such holding shall not affect the validity of the remaining provisions, which shall remain in full force and effect.

Amendments and Waiver: No amendment or waiver of any provision of this Note shall be effective unless in writing and signed by the party against whom enforcement is sought. No failure or delay by Lender in exercising any right shall operate as a waiver.

Counterparts: This Note may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Facsimile or electronic transmission of an executed counterpart shall be treated as an original.

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