Difference between revisions of "Loans"
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<center><u>UNSECURED PROMISSORY NOTE</u></center>
<center><u>UNSECURED PROMISSORY NOTE</u></center>
Revision as of 00:30, 25 April 2014
How does your collective feel about good-faith loans toward this deposit?
Yet to be determined by consensus. Some folks are strongly opposed to loans, while others feel small or good-faith loans (interest-free, no set timeline to pay back by though concerted effort made to pay back over time) are acceptable.
- The priority for fundraising at this point should be donations and contributions from memeber collectives
- The terms of any loan must be consented on by the collectives. If loans require payments to be made then an opperating agreement must be in place to clearly describe how money will flow through the collectives and back to creditors.
Provisional Loan Terms (Unsecured Promissary Note)
- Any loan and its terms must be agreed to by all collectives.
- The following document contains the language we would use to contractually represent the loan.
- The main aspects are:
- A 2-year, no-interest, unsecured loan (the prospective duration of the lease)
- after 2 years, an interest rate of 6% levied on any amount unpaid. This aspect is up to us - we can set it to whatever we want - lawyers have advised us that this aspect is normally written into these documents in order to provide an obvious motivation for the borrower to pay the loan back.
Omni Oakland Collective, a California public benefit corporation (“Borrower”), for value received, promises to pay to ______________ (“Lender”) the principal sum of $_________ and 0/100s, all as hereinafter provided, and on the following agreements, terms, and conditions:
1. Interest Accrued and Principal Payment. Except as provided herein, no interest shall accrue or be due on this Note.
2. Timing and Manner of Payment. The unpaid principal balance shall be due and payable on May 5th, 2016 (“Maturity Date”) unless such Maturity Date is accelerated or extended as provided herein. All principal shall be paid in lawful money of the United States of America and in immediately available funds. Borrower shall have the right to prepay this Note in part or in full anytime before the Maturity Date.
3. Default and Acceleration. In the event of any Default, Lender may, in its sole discretion, declare all sums owed and to become owing on this Note immediately due and payable irrespective of any Maturity Date expressed herein. All such sums shall bear interest from the date of Default until paid at 6% percent per annum ("Default Rate"). For purposes of this Note, a "Default" shall mean:
(a) a breach or default in payment when due of any indebtedness evidenced by this Note; or a breach or default in the performance of any other term, covenant, condition or agreement under this Note, which breach or default is not cured within thirty (30) days after notice of such breach or default or, if such breach or default is not reasonably capable of being cured within such thirty (30) day period, if Borrower has not commenced in good faith the curing of such breach or default within such thirty (30) day period or does not thereafter prosecute to completion with diligence and continuity the curing thereof, which cure must in any event be completed within sixty (60) days after such notice to Borrower; or
(b) if Borrower applies for or consents to the appointment of a receiver, liquidator, custodian or trustee for it or any portion of its property, or if such receiver, liquidator, custodian or trustee is appointed for Borrower or its property and is not discharged within thirty (30) days after the date of such appointment, or Borrower makes an assignment for the benefit of creditors, or Borrower admits in writing its inability to pay its debts as they become due, or Borrower becomes insolvent, or a petition is filed by Borrower pursuant to any of the provisions of the Bankruptcy Code, 11 U.S.C. Section 101 et seq., as amended, or any similar or successor statute, or such a petition is filed against Borrower and is not dismissed or vacated within thirty (30) days after the date of such filing.
4. Liability. Borrower waives diligence, presentment for payment, protest, and demand with respect to this Note. Borrower further waives notice of protest, demand, dishonor, non-payment, and acceleration of this Note. Borrower further waives the right to any and all statutes of limitations as a defense to this Note. Borrower agrees that any modification or extension of the terms of payment of this Note that may be permitted from time to time by Lender with or without notice to Borrower, shall not diminish or impair Borrower's liability for the payment of this Note.
5. Costs of Collection. Borrower agrees to pay all costs and expenses which Lender may incur by reason of any Default including, without limitation, actual attorneys' fees and costs incurred with respect to legal services in connection with any Default, or the determination of any rights or remedies of Lender under this Note, whether or not a suit is actually commenced. The amount of such costs and expenses shall be added to the principal sum due hereunder and shall bear interest as provided herein from the date on which Lender incurs such costs and expenses.
6. General Provisions. Time is of the essence of this Note. This Note may not be charged, amended, or modified except by a further written agreement between Borrower and Lender. Lender may assign, sell or otherwise transfer this Note by providing a written notice within 30 days of the assignment to Borrower. Any failure of Lender to exercise any of its rights under this Note shall not constitute a waiver of those rights by Lender or a waiver by Lender of any other rights. This Note and the rights and duties of Borrower and Lender shall be governed by the laws of the State of California for all purposes. The terms of this Note shall inure to the benefit of and bind Borrower and Lender and their respective heirs, legatees, devisees, administrators, legal representatives, successors, and assigns.
IN WITNESS WHEREOF, the undersigned Borrower has executed the within instrument as of the date first written above.
Dated: _______, 2014