Promissory Note - Installment Payment - Alaska

INSTALLMENT PROMISSORY NOTE

State of Alaska

Date of Note: [__/__/____]

Principal Amount: $[________________________________]

Annual Interest Rate: [____]% per annum

Number of Installments: [________________________________]

Installment Amount: $[________________________________]

First Payment Date: [__/__/____]

Final Maturity Date: [__/__/____]

Payment Frequency: ☐ Monthly ☐ Bi-Weekly ☐ Quarterly ☐ Other: [________________]

PARTIES

Maker (Borrower):

Full Legal Name: [________________________________]

Address: [________________________________]

City, State, ZIP: [________________________________]

Telephone: [________________________________]

Email: [________________________________]

Social Security Number (last 4 digits for identification): XXX-XX-[____]

Payee (Lender):

Full Legal Name: [________________________________]

Address: [________________________________]

City, State, ZIP: [________________________________]

Telephone: [________________________________]

Email: [________________________________]

ARTICLE I. PROMISE TO PAY

1.1 Unconditional Promise. FOR VALUE RECEIVED, the undersigned Maker ("Borrower") unconditionally promises to pay to the order of Payee ("Lender"), or to any subsequent holder of this Installment Promissory Note (this "Note"), the Principal Amount stated above, together with all accrued and unpaid interest thereon, in lawful money of the United States of America, in consecutive installment payments as set forth in Article III below.

1.2 Negotiability. This Note is intended to be a negotiable instrument within the meaning of the Uniform Commercial Code as adopted in Alaska under AS 45.03.104. This Note contains an unconditional promise to pay a fixed amount of money, is payable at a definite time pursuant to AS 45.03.108, is payable to order, and does not state any other undertaking or instruction by the Borrower except as permitted under AS 45.03.104(a)(3).

1.3 Consideration. The Borrower acknowledges receipt of the Principal Amount from the Lender as a loan, constituting good and valuable consideration for this Note. The Borrower further acknowledges that no portion of the loan proceeds has been retained by the Lender.

ARTICLE II. INTEREST

2.1 Contract Interest Rate. The unpaid Principal Amount shall bear interest from the date of this Note at the annual rate of [____]% per annum (the "Contract Rate"). Interest shall be computed on the actual unpaid principal balance, on the basis of a 365-day year and actual days elapsed.

2.2 Alaska Usury Law Compliance.

(a) The legal rate of interest in Alaska is 10.5% per annum pursuant to AS 45.45.010(a).

(b) Under AS 45.45.010(b), the Contract Rate shall not exceed five (5) percentage points above the annual rate charged member banks for advances by the 12th Federal Reserve District on the date this Note is executed, unless the Principal Amount exceeds $25,000, in which case the contractual rate limitation does not apply pursuant to AS 45.45.010(b).

(c) The parties represent that the Contract Rate stated in this Note complies with the foregoing limitations as of the date of execution.

2.3 Usury Savings Clause. Notwithstanding any provision of this Note to the contrary, the total amount of interest paid or agreed to be paid to the Lender shall not exceed the maximum rate permissible under applicable Alaska law. If any excess interest is charged or collected: (a) the amount of such excess shall be applied first to reduce the unpaid Principal Amount; (b) any remaining excess shall be refunded to the Borrower; and (c) pursuant to AS 45.45.030, the Borrower retains the right to recover double the amount of any excess interest within two (2) years of such payment.

2.4 Default Interest Rate. Upon the occurrence and during the continuance of any Event of Default (as defined in Article VI), the outstanding balance shall bear interest at the lesser of: (a) the Contract Rate plus [____] percentage points; or (b) the maximum rate permitted under Alaska law (the "Default Rate"). Default interest shall accrue from the date of default until the default is cured or the Note is paid in full.

2.5 Interest Accrual After Maturity. After the Final Maturity Date, any remaining unpaid balance shall continue to bear interest at the Default Rate until paid in full.

ARTICLE III. PAYMENT SCHEDULE

3.1 Installment Payments. The Borrower shall make [________________________________] consecutive installment payments of $[________________________________] each (or as set forth in the Amortization Schedule attached hereto as Exhibit A, if applicable), commencing on [__/__/____] and continuing on the same day of each [month/period] thereafter until the Final Maturity Date.

3.2 Final Payment (Balloon, if applicable). ☐ Check here if the final payment differs from regular installments. If checked, the final payment due on the Final Maturity Date shall be in the amount of $[________________________________], representing all remaining unpaid principal plus accrued interest.

3.3 Fixed vs. Variable Payments. ☐ Fixed installments (equal periodic payments of principal and interest) ☐ Interest-only payments with principal due at maturity ☐ Variable payments per attached Amortization Schedule (Exhibit A)

3.4 Application of Payments. Each installment payment shall be applied in the following order of priority: (a) first, to any late charges, costs, fees, and expenses then due under this Note; (b) second, to accrued and unpaid interest; and (c) third, to the unpaid Principal Amount.

3.5 Method of Payment. All payments shall be made by one or more of the following methods:

☐ Personal check or cashier's check payable to Lender

☐ ACH electronic fund transfer to Lender's account

☐ Wire transfer to Lender's designated account

☐ Automatic bank draft from Borrower's account at [________________________________]

☐ Other: [________________________________]

3.6 Place of Payment. All payments shall be delivered or transmitted to the Lender at the address stated above, or at such other place as the holder of this Note may designate by written notice to the Borrower at least ten (10) days before the next payment date.

3.7 Business Day Convention. If any installment payment date falls on a day that is not a Business Day (any day other than a Saturday, Sunday, or legal holiday observed in the State of Alaska), the payment shall be due on the next succeeding Business Day, and additional interest shall accrue through such extended payment date.

3.8 Grace Period. The Borrower shall have a grace period of [____] calendar days following each installment due date before a late charge is assessed. The grace period does not excuse or delay the obligation to make timely payments, and interest shall continue to accrue during the grace period.

ARTICLE IV. PREPAYMENT

4.1 Right to Prepay. The Borrower may prepay this Note, in whole or in part, at any time without premium, penalty, or prior notice.

4.2 Application of Prepayment. Any partial prepayment shall be applied first to accrued interest and then to the Principal Amount in the inverse order of maturity (i.e., to the latest-maturing installments first), unless the Borrower directs otherwise in writing and the Lender consents.

4.3 Effect of Partial Prepayment. A partial prepayment shall not excuse or delay the Borrower's obligation to make subsequent scheduled installment payments, unless the Lender agrees in writing to reamortize the remaining balance.

4.4 No Reborrowing. Any amount prepaid under this Note may not be reborrowed.

ARTICLE V. LATE CHARGES

5.1 Late Payment Fee. If any installment payment is not received by the Lender within [____] calendar days after its scheduled due date, the Borrower shall pay a late charge equal to the greater of: (a) $[____]; or (b) [____]% of the overdue installment amount.

5.2 Not a Waiver. Assessment or non-assessment of a late charge shall not constitute a waiver of the Lender's right to declare an Event of Default or to exercise any other remedy under this Note.

5.3 Insufficient Funds Fee. If any check or electronic payment is returned for insufficient funds, the Borrower shall pay a returned payment fee of $[____] in addition to any applicable late charges.

ARTICLE VI. DEFAULT AND REMEDIES

6.1 Events of Default. Each of the following shall constitute an "Event of Default" under this Note:

(a) Payment Default. The Borrower fails to make any installment payment, or any other payment due under this Note, within [____] calendar days after the date such payment becomes due and payable.

(b) Covenant Default. The Borrower fails to observe or perform any other covenant, obligation, or condition contained in this Note or in any related agreement, and such failure continues for thirty (30) days after written notice from the Lender.

(c) Insolvency. The Borrower (i) files a voluntary petition in bankruptcy under Title 11 of the United States Code; (ii) is adjudicated bankrupt or insolvent; (iii) makes a general assignment for the benefit of creditors; (iv) consents to the appointment of a receiver, trustee, or liquidator of all or a substantial part of the Borrower's assets; or (v) is the subject of an involuntary bankruptcy petition that is not dismissed within sixty (60) days.

(d) Misrepresentation. Any material representation or warranty made by the Borrower in connection with this Note, the underlying loan transaction, or any financial statement furnished to the Lender was materially false, misleading, or incomplete when made.

(e) Death or Incapacity. If the Borrower is a natural person, the death, legal incapacity, or incompetency of the Borrower.

(f) Cross-Default. The Borrower defaults under any other promissory note, loan agreement, or obligation payable to the Lender.

(g) Judgment. A final, non-appealable judgment is entered against the Borrower in an amount exceeding $[________________________________] and remains unsatisfied, unstayed, or unbonded for a period of thirty (30) days.

(h) Material Adverse Change. A material adverse change occurs in the financial condition, business, or prospects of the Borrower that, in the Lender's reasonable judgment, impairs the Borrower's ability to pay this Note.

6.2 Acceleration. Upon the occurrence of any Event of Default, the Lender may, at the Lender's sole option, without further demand or notice (which are hereby waived to the fullest extent permitted by law), declare the entire unpaid Principal Amount, together with all accrued and unpaid interest, late charges, fees, costs, and other amounts due under this Note, to be immediately due and payable in full (the "Accelerated Balance").

6.3 Right to Cure. Prior to acceleration, the Lender shall provide written notice to the Borrower specifying the Event of Default and allowing the Borrower [____] calendar days from the date of such notice to cure the default (the "Cure Period"), except that no Cure Period shall apply to Events of Default under Sections 6.1(c) or 6.1(e).

6.4 Collection Costs and Attorney Fees. If this Note is placed with an attorney for collection, or if the Lender incurs legal expenses to enforce this Note, the Borrower shall pay all reasonable costs of collection, including court costs, filing fees, service of process fees, and reasonable attorney fees. In the event of litigation, attorney fees shall be awarded to the prevailing party in accordance with Alaska Civil Rule 82, which provides for mandatory fee-shifting to the prevailing party in civil actions. Under Rule 82(b)(1), if a money judgment is awarded, the prevailing party receives a scheduled percentage of the judgment (typically 20% of the first $25,000 and lower percentages of higher amounts).

6.5 Cumulative Remedies. The rights and remedies of the Lender under this Note are cumulative and in addition to any other rights and remedies available at law, in equity, or under any other agreement.

ARTICLE VII. WAIVERS BY BORROWER

7.1 Waivers. To the fullest extent permitted by law, the Borrower, and each surety, endorser, guarantor, and accommodation party of this Note, hereby waives:

(a) Presentment for payment, demand, notice of dishonor, protest, and notice of protest as provided under AS 45.03.501 through AS 45.03.505;

(b) Notice of intent to accelerate and notice of acceleration;

(c) Any right to require the Lender to proceed against any other person, to proceed against any collateral, or to pursue any other remedy before enforcing this Note;

(d) Any defense arising by reason of any extension of time for payment, modification of terms, indulgence, or release of any party or any collateral granted by the Lender;

(e) The benefit of any statute of limitations, homestead exemption, or other exemption to the extent permitted by law;

(f) Diligence in collection and any requirement that the Lender give notice of acceptance of this Note.

7.2 No Waiver by Lender. No failure or delay by the Lender in exercising any right or remedy under this Note shall operate as a waiver thereof. No single or partial exercise of any right or remedy shall preclude any further exercise thereof or the exercise of any other right or remedy. No waiver of any default shall be effective unless in writing and signed by the Lender, and no waiver shall extend to any subsequent or other default.

ARTICLE VIII. GOVERNING LAW AND DISPUTE RESOLUTION

8.1 Governing Law. This Note shall be governed by, and construed in accordance with, the laws of the State of Alaska, including the Alaska Uniform Commercial Code (AS 45.01 through AS 45.29) as applicable, without regard to conflict of laws principles.

8.2 Jurisdiction and Venue. Any action arising out of or relating to this Note shall be brought exclusively in the state or federal courts sitting in the State of Alaska, in the [________________________________] Judicial District. The Borrower irrevocably consents to personal jurisdiction and venue in such courts.

8.3 Jury Trial Waiver (Optional). ☐ If checked, EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS NOTE.

8.4 Statute of Limitations. The parties acknowledge that contract actions in Alaska are subject to a three (3) year statute of limitations under AS 09.10.053. The Lender may bring an action to enforce this Note at any time within the applicable limitations period following the Event of Default giving rise to such action.

ARTICLE IX. GENERAL PROVISIONS

9.1 Amendments. This Note may be amended, modified, or supplemented only by a written instrument executed by both the Borrower and the Lender (or the then-current holder of this Note).

9.2 Successors and Assigns. This Note shall be binding upon and shall inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, successors, and assigns. The Lender may freely assign or transfer this Note. The Borrower may not assign or delegate any obligation under this Note without the prior written consent of the Lender.

9.3 Severability. If any provision of this Note is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, such holding shall not affect the validity or enforceability of any other provision, and this Note shall be construed as if the invalid provision had not been included.

9.4 Entire Agreement. This Note, together with any related security agreement, guaranty, or other documents executed in connection herewith, constitutes the entire agreement between the parties regarding the subject matter hereof and supersedes all prior or contemporaneous agreements, negotiations, representations, and understandings.

9.5 Notices. All notices required or permitted under this Note shall be in writing and shall be deemed delivered: (a) when personally delivered; (b) three (3) Business Days after mailing by certified or registered mail, return receipt requested, postage prepaid; or (c) one (1) Business Day after deposit with a nationally recognized overnight courier, in each case addressed to the applicable party at the address stated above or such other address as may be designated by written notice.

9.6 Electronic Signatures. Electronic signatures, facsimile signatures, and PDF copies of signatures shall be deemed original signatures for all purposes of this Note.

9.7 Headings. Article and Section headings are for convenience only and do not affect interpretation.

9.8 Time of Essence. Time is of the essence with respect to all dates and time periods specified in this Note.

9.9 Joint and Several Liability. If the Borrower consists of more than one person or entity, the obligations of each such person or entity under this Note shall be joint and several.

9.10 Construction. This Note shall be construed without regard to any presumption or rule requiring construction against the party who drafted or caused the Note to be drafted.

ARTICLE X. OPTIONAL PROVISIONS

10.1 Security Interest. ☐ Check here if this Note is secured by collateral. If checked, this Note is secured by the following collateral: [________________________________], as described in that certain Security Agreement dated [__/__/____] between Borrower and Lender. A default under this Note shall constitute a default under such Security Agreement.

10.2 Personal Guaranty. ☐ Check here if a personal guaranty has been given. If checked, this Note is guaranteed by [________________________________] pursuant to a separate Guaranty Agreement of even date herewith.

10.3 Subordination. ☐ Check here if this Note is subordinated. If checked, this Note is subordinated to the prior payment in full of [________________________________] (describe senior obligation) pursuant to the terms of a Subordination Agreement dated [__/__/____].

ARTICLE XI. EXECUTION

IN WITNESS WHEREOF, the Borrower has executed this Installment Promissory Note as of the date first written above.

BORROWER / MAKER:

Signature: [________________________________]

Printed Name: [________________________________]

Date: [__/__/____]

CO-BORROWER (if applicable):

Signature: [________________________________]

Printed Name: [________________________________]

Date: [__/__/____]

ACKNOWLEDGMENT BY LENDER / PAYEE:

The undersigned Lender acknowledges receipt of this executed Installment Promissory Note and agrees to be bound by the terms herein applicable to the Lender.

Signature: [________________________________]

Printed Name: [________________________________]

Date: [__/__/____]

NOTARY ACKNOWLEDGMENT (Optional)

STATE OF ALASKA

[________________________________] Judicial District

On this [____] day of [________________], 20[____], before me, the undersigned Notary Public in and for the State of Alaska, personally appeared [________________________________], known to me (or proved to me on the basis of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

Signature: [________________________________]

Notary Public in and for the State of Alaska

My Commission Expires: [__/__/____]

[NOTARY SEAL]

EXHIBIT A - AMORTIZATION SCHEDULE

IMPORTANT NOTICES AND DISCLOSURES

NOTICE TO BORROWER: You are signing a legally binding installment promissory note. Before signing, read the entire document carefully and consult with an attorney if you have any questions about your rights and obligations. You are committing to make regular installment payments over the term of this Note, and failure to make timely payments may result in acceleration of the entire balance, default interest, late charges, and legal action.

ALASKA USURY NOTICE: Under AS 45.45.010, the legal rate of interest in Alaska is 10.5% per annum. Parties may agree to a higher rate in writing, subject to the limitations of AS 45.45.010(b). Loans with a principal amount exceeding $25,000 are exempt from the contractual rate limitation. If excess interest is charged, the Borrower may recover double the excess amount within two years of payment under AS 45.45.030.

ATTORNEY FEE NOTICE: Alaska Civil Rule 82 provides for the award of attorney fees to the prevailing party in civil litigation. If the Lender must bring suit to collect amounts owed under this Note, and the Lender prevails, the court will award attorney fees to the Lender. Conversely, if the Borrower prevails in a dispute concerning this Note, the Borrower may be awarded attorney fees.

RIGHT TO PREPAY: You have the right to prepay this Note in whole or in part at any time without penalty. See Article IV for details.

SOURCES AND REFERENCES

• Alaska Statutes Title 45, Chapter 03 - Negotiable Instruments (AS 45.03.101 et seq.)
• Alaska Statutes Title 45, Chapter 45 - Interest and Usury (AS 45.45.010 - AS 45.45.030)
• Alaska Statutes Title 9, Chapter 10 - Limitations of Actions (AS 09.10.053)
• Uniform Commercial Code Article 3 as adopted in Alaska
• Alaska Civil Rule 82 - Attorney Fee Shifting in Civil Cases
• Alaska Court System: https://courts.alaska.gov/