Oregon Promissory Note
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An Oregon Promissory Note is basically a fancy IOU. It's a friendly pact between two buddies, with one lending cash to the other—who swears to pay it back, of course. All the crucial scoop, like when to repay and those pesky interest costs, is laid out on the table.
What is the Usury Rate for Oregon?
In good old plain speak, a usury rate is the highest legal interest rate you can slap on a loan. If a lender tries to go beyond this mark, they're dipping their toes into "usury" territory—which is a big no-no. Now, these rates jiggle and wiggle across the states, so getting savvy about your area's rules is crucial. By keeping the usury rate on the front burner, you're padding your business loan with responsibility and dodging anything that could trip you up. So, it's definitely a handy piece of knowledge to pocket when you're mulling over a business loan.
For Oregon, the legal interest rate is 9%, but the parties may agree to different rates in a written agreement. Business and agricultural loans have a maximum of 12% or 5% greater than the 90-day discount rate of commercial paper. (Or. Rev. Stat. § 82.010)
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Read on to learn more about Oregon Promissory Notes, including:
What's included in a Oregon Promissory Note?
Here are some key components that are typically included in an Oregon Promissory Note:
- Amount and Terms of the Loan
- Closing and Delivery
- Representations, Warranties the Company
- Organization, Good Standing and Qualification
- Corporate Power
- Authorization
- Compliance with Laws
- Use of Proceeds
1. Amount and Terms of the Loan
"The Loan" lays out the exact cash value you're lending your buddy's company. This part is the bees-knees since it nails down transparency and safeguards both parties. To wrap it up, simply add the loan numbers in the blank space. Oh, and don't forget to peek at "Exhibit A." It's the promissory note's best friend, serving as the written vow and proof of the loan.
In a nutshell—this star player in the agreement lights up the money you're putting on the line, setting a crystal-clear base for your promissory note pact.
The Loan. Subject to the terms of this Agreement, Purchaser agrees to lend to the Company at the Closing $_________ (“Loan Amount”) against the issuance and delivery by the Company of a promissory note for such amount, attached as EXHIBIT A (“Note”).
2. Closing and Delivery
"CLOSING AND DELIVERY" sets the game rules for bringing the curtains down on your promissory note agreement. In the Closing bit, you'll pinpoint a finish line for the transaction. It's a date you and your fellow borrower can choose together—it doesn't have to be the contract's birthday.
Delivery is all about the swapping: the borrower sends the loan money to the company, then the company hands them a fully-quipped promissory note as proof of their promise to repay. This one-for-one exchange enforces clarity and dedication from everyone around the table.
CLOSING AND DELIVERY
Closing. The closing of the sale and purchase of the Notes (the “Closing”) will be held on the Effective Date, or at such other time as the Company and Purchasers may mutually agree (such date is referred to as the “Closing Date”).
Delivery. At the Closing (i) Purchaser will deliver to the Company a check or wire transfer funds in the amount of the Loan Amount; and (ii) the Company will issue and deliver to Purchaser a Note in favor of Purchaser payable in the principal amount of Purchaser’s Loan Amount.
3. Representation, Warranties The Company
This part packs in the company's honest-to-goodness statements about certain specifics. Legal ties mean they've got to keep their story straight here to sidestep any legal hiccups. Tuck in the need-to-knows about the company's money matters, day-to-day running, or any legal fluff. It's key for building trust and keeping things crystal clear in your agreement.
a. Organization, Good Standing and Qualification
This cozy little piece called Organization, Good Standing, and Qualification gives a thumbs-up to the company's legal standing. Toss in the state where the company's put together, guaranteeing it runs like clockwork and fosters trust among everyone involved.
Organization, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of [State]. The Company has the requisite corporate power to own and operate its properties and assets and to carry on its business as now conducted and as proposed to be conducted. The Company is duly qualified and is authorized to do business and is in good standing as a foreign corporation in all jurisdictions in which the nature of its activities and of its properties (both owned and leased) makes such qualification necessary, except for those jurisdictions in which failure to do so would not have a material adverse effect on the Company or its business.
b. Corporate Power
The Corporate Power chunk gives a gold star to the company's legal oomph to swing this agreement and meet their duties. It really just says: "Hey, our company's got the legal green light to take on this deal." It's super important for building trust and making sure everything's on the up-and-up. So, double-check this little bit is in there and crystal clear.
Corporate Power. The Company has all requisite corporate power to execute and deliver this Agreement, to issue the Note and to carry out and perform its obligations under the terms of the Note.
c. Authorization
The Authorization chunk makes sure the company's key players give a thumbs-up and stamps the note's legal status. It's a cornerstone in your contract that double-checks all the must-dos in the corporate world have been checked off. This bit keeps both sides safe and lays a sturdy groundwork for your agreement.
Authorization. All corporate action has been taken on the part of the Company, its directors and its stockholders necessary for the authorization of the Note and the execution, delivery and performance of all obligations of the Company under the Note. The Note, when executed and delivered by the Company, will constitute valid and binding obligations of the Company enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency, the relief of debtors.
d. Compliance with Laws
In the Compliance with Laws bit, you're basically pinky promising your company isn't bending any rules that could put a damper on your business. By weaving this provision into your agreement, everyone's minds can rest easy—confident that your company's truly playing by the legal playbook.
Compliance with Laws. To its knowledge, the Company is not in violation of any applicable statute, rule, regulation, order or restriction of any domestic or foreign government or any instrumentality or agency in respect of the conduct of its business or the ownership of its properties, which violation would materially and adversely affect the business, assets, liabilities, financial condition or operations of the Company.
e. Use of Proceeds
The Use of Proceeds part pinpoints that the loan's solely for company matters, not for personal splurges. It's a must-have for keeping things crystal clear and holding on to that trust with those lending you the moolah.
Use of Proceeds. The Company will use the proceeds of the Note for the operations of its business, and not for any personal, family or household purpose.
Can a promissory note be used without a mortgage?
Absolutely, a promissory note can fly solo, no mortgage needed. Think of a promissory note like your playbook—it's a legal proof that outlines all the ins and outs of a loan, while a mortgage is like your safety net, securing the loan against a beefy asset, say a piece of property. Promissory notes are flexible—they can be joined at the hip with both secured and unsecured loans. So, indeed, you can have a promissory note without a mortgage, treating your loan as an unsecured one. But remember, you typically can't snag a mortgage without a promissory note, since this little playbook spells out how the bucks get repaid and holds the borrower's promise to pay up.
How do you collect from a promissory note?
To gather the dues from a promissory note, tally up all the dollars owed, don't forget about those pesky interest and fees. Drop a line in writing to the person who owes you. If they don't loosen their purse strings, think about getting the courts involved. Make sure all your paperwork is squared away and look for some legal wisdom, because every area plays by its own rulebook. Steer clear of pestering the debtor, that could land you in hot water. Always have a chat with a lawyer to dodge those oops moments.