...THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED, OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION IS NOT REQUIRED UNDER SUCH ACT OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SUCH ACT. CONVERTIBLE PROMISSORY NOTE Date of Issuance $XXXX (Date), 2015 FOR VALUE RECEIVED, (XXXX), an Indonesian Company (the “Company”), hereby promises to pay to the order of XXXX.(the “Lender”), the principal sum of $XXXXX, together with interest thereon from the date of this Note. Interest shall accrue at a rate of six percent (X%) per annum, compounded annually. Unless earlier converted into Conversion Shares pursuant to Section 2.2 of that certain Note Purchase Agreement dated XXXX among the Company, Lender and certain other investors (the “Purchase Agreement”), the principal and accrued interest shall be due and payable by the Company on demand by the Majority Note Holders at any time after the Maturity Date. This Note is one of a series of Notes issued pursuant to the Purchase Agreement, and capitalized terms not defined herein shall have the meaning set forth in the Purchase Agreement. 1. Payment. All payments shall be made in lawful money of the United States of America at the principal...
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...in this scenario is a promissory note. When a promissory note is present, this is a written promise which involves two parties (Clark, Miller & Cross, 2014). The two parties that are present in a promissory note is the maker (payer) and the payee and the note may be made with a specific date mentioned or on demand-when the payee requests the money (Clark, Miller & Cross, 2014). In the scenario above, the maker is Phoebe and the payee is Quint and it the note is written to indicate that when Quint asks for the $600, Phoebe is to pay it at that time. In order for a note (or any other instrument) to be negotiable it must meet all six of the following requirements. These requirements are (Clark, Miller & Cross, 2014): 1. The instrument must be in writing-Phoebe wrote the promissory note on the back of an envelope. 2. It must be signed by the maker (payer) or the drawer-Phoebe signed the note 3. It must be an unconditional promise to pay-there were no conditions set by Phoebe that may hinder Quint from requesting payment (i.e.-I, Phoebe, will pay Quint the $600 if he calls me no later than noon on the day he requests payment) 4. The note must state a fixed amount of money-Phoebe’s promissory note listed $600. 5. The note must be payable on demand or at a definite amount of time-Phoebe’s note stated “payable on demand”. 6. The note must be payable to order or to bearer unless it is a check-Quint is the named bearer on the promissory note. As the note that was written by...
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...Bill of Exchange 8 G LEARNING OBJECTIVES After studying this chapter, you will be able to : • state the meaning of bill of exchange and a promissory note; • distinguish between a bill of exchange and a promissory note; • state the advantages of bill of exchange; • explain the meaning of different terms involved in the bill transaction, • record bill of exchange transactions in journal; • record transactions relating to dishonour, retirement and renewal of bill; • describe the uses of bill receivable and bill payable book; • state the meaning and use of accommodation bill. oods can be sold or bought for cash or on credit. When goods are sold or bought for cash, payment is received immediately. On the other hand, when goods are sold/bought on credit the payment is deferred to a future date. In such a situation, normally the firm relies on the party to make payment on the due date. But in some cases, to avoid any possibility of delay or default, an instrument of credit is used through which the buyer assures the seller that the payment shall be made according to the agreed conditions. In India, instruments of credit have been in use since time immemorial and are popularly known as Hundies. The hundies are written in Indian languages and have a large variety (refer box1). Box 1 Hundies and its Types There are a variety of hundies used in our country. Let us discuss some of the most common ones. Shahjog Hundi: This is drawn by one merchant on another, asking the latter...
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...Wilkes Mgmt 597 Chapter 22.10 In the case of Holly Hill Acres, Ltd. V Charter Bank of Gainsville, Holly Hill purchased land from Rogers and Blythe giving them a promissory note and purchase money mortgage. The note stated, “this note with interest is secured by a mortgage on real estate, of even date herewith, made by the maker hereof in favor of the said payee, and shall be constructed and enforced according to laws of the State of Florida” (HOLLY HILL ACRES, LTD., a Limited Partnership, Appellant, v. CHARTER BANK OF GAINESVILLE, a Banking Corporation, et al., Appellees., 1975). The promissory note was issued to Rogers and Blythe, Rogers and Blythe later took a loan from Charter Bank, in order to secure the loan, they transferred the promissory note they had created with Holly Hill. After Holly Hill defaulted, Charter Bank sued to recover on Holly Hill’s promissory note, the question being if the reference to the mortgage in the note makes it non-negotiable. First, it would have to be determined if Charter Bank was a holder in due course, they do fit the books description “a holder who takes a negotiable instrument for value, in good faith, and without notice that is defective or overdue” (Cheeseman, 2010). Which according the case the lower court did agree with. Although the court on appeal found the note was non-negotiable because it incorporated the terms of the purchase money mortgage. Now the bank was not a holder in due course, therefore was subject to any defenses...
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...PROMISSORY NOTE Principal Amount owed: R____________ DATE: _____________ I, ___________________________________ (Borrower) promise to pay __________________________________ (Lender) the sum of _____________________________ Rands (R_______________). The form of payment shall be direct deposit to Lender’s personal account or EFT. No cash or personal checks will be accepted. Borrower will pay one lump payment of R________ in lawful money of the Republic of South Africa on: _____/_____/_____ and the principal is paid in full. If the Borrower fails to make this payment when due or fails to comply with any other term of this promissory note, the loan will be considered in default. Borrower agrees that until the principal owed under this promissory note are paid in full, this note will be secured by ______________________________ Payment will only be applied to principal. The Borrower must promptly inform the Lender of any change in name or address. If the Lender prevails in a lawsuit to collect on this note, Borrower will pay Lender's court costs, collection agency costs, and attorney's fees in an amount the court finds to be reasonable. Lender retains the right to take the borrower to small claims court or a court of higher without notice at any time the loan is in default. IN WITNESS WHEREOF, I set my hand under seal this ____th day of _______________, 20___ and I acknowledge receipt of a completed copy of this instrument. Borrower’s Signature: ____________________________ ...
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...| | | | | Definition | | | | A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time. Under section 13 of the Negotiable Instruments Act, “a negotiable instrument” means a promissory note, bills of exchange or chequ payable either to order or to bearer”. According to Judge Willis: “A negotiable instrument is one the property in which is acquired by every person who takes it bonafide and for value, not withstanding any defect of title in the person from whom he took it.” It is a document contemplated by a contract, which (1) warrants the payment of money, the promise of or order for conveyance of which is unconditional; (2) specifies or describes the payee, who is designated on and memorialized by the instrument; and (3) is capable of change through transfer by valid negotiation of the instrument. As payment of money is promised subsequently, the instrument itself can be used by the holder in due course as a store of value; although, instruments can be transferred for amounts in contractual exchange that are less than the instrument’s face value (known as “discounting”). Types of Negotiable instruments a) Promissory note: A written, dated and signed two-party instrument containing an unconditional promise by the maker to pay a definite sum of money to a payee on demand or at specified future date. b) Bill of exchange: Bills of exchange are financial documents that require the...
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...Promissory Note (Lump-Sum Payment) 1. Names. Borrower: ________Shayne Ward____________________________________________ Address: ________Suite 1173 Sacramento, CA 95814, USA_______________________ Lender: _________Kelly Clarkson____________________________________________ Address: _________PO Box 309. Hickory, NC 28603. USA_______________________ 2. Promise to Pay. For value received, Borrower promises to pay Lender $___10,000___ and interest at the yearly rate of ___8__% on the unpaid balance as specified below. 3. Payment Date. [X] Borrower will pay the entire amount of principal and interest on or before ________04/20/2018___________. [ ] Borrower will pay the entire amount of principal and interest on or before the earlier of (1) the occurrence of ___________________________________________, or (2) _______________________________________________________________. 4. Prepayment. Borrower may prepay all or any part of the principal without penalty. 5. Security. [ ] This is an unsecured note. [ ] Borrower agrees that until the principal and interest owed under this promissory note are paid in full, this note will be secured by a security agreement and Uniform Commercial Code Financing Statement giving Lender a security interest in certain equipment, fixtures, inventory, or other assets, as described in the security agreement, of the business known as __________ Je T’aime Inc._________________________ ____________________________________________________________________...
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...THE NEGOTIABLE INSTRUMENTS ACT AND THE NEGOTIABLE INSTRUMENTS (AMENDMENT AND MISCELLANEOUS PROVISIONS) ACT, 2002 Negotiable instruments are of great importance in the business world and by extension in banking. They are instruments for making payments and discharging business obligations What is a Negotiable Instrument? The Negotiable Instruments Act does not define a negotiable instrument but merely states, “ a negotiable instrument means a promissory note, bill of exchange or cheque payable either to order or bearer.” (Section 13). This section does not prohibit any other instrument that satisfies the essential features of portability. Justice K. C. Willis defines these as, “ one the property in which is acquired by anyone who takes it bonafide and for value notwithstanding any defect in title in the person from whom he took it.” Thomas defines it in his book “Commerce, Its theory and Practice “A negotiable instrument is one which is, by a legally recognized custom of trade or by law, transferable by delivery in such circumstances that (a) the holder of it for the time being may sue on it in his own name and (b) the property in it passes, free from equities, to a bona-fide transferee for value, notwithstanding any defect in the title of the transferor.” It : (1) entitles a person to a sum of money (2) is transferable (by customs of trade) by delivery, like cash, or by Endorsement and delivery and delivery, and (3) ...
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...NEGOTIABLE INSTRUMENTS ACT,1881 Definition of a Negotiable Instrument. The law relating to negotiable instruments is contained in the Negotiable Instruments Act, 1881. It is an Act to define and amend the law relating to promissory notes, bills of exchange and cheques. The Act does not affect the custom or local usage relating to an instrument in oriental language i.e., a Hundi. The term "negotiable instrument" means a document transferable from one person to another. However the Act has not defined the term. It merely says that "A .negotiable instrument" means a promissory note, bill of exchange or cheque payab1e either to order or to bearer. [Section 13(1)] A negotiable instrument may be defined as "an instrument, the. property in which is acquired by anyone who takes it bona fide, and for value, notwithstan~ing any defect of title in the person from whom he took it, from which it follo~s that an instrument cannot be negotiable unless it is such and in such a state that the true owner could transfer the contract or engagement contained therein by simple delivery of instrument" (Willis- The Law of Negotiable Securities, Page 6). According to this definition the following are the conditions of negotiability: (i) The instrument should be freely transferable. An instrument cannot be negotiable unless it is such and in such state that the true owner could transfer by simple delivery or endorsement and delivery. (ii) The person who takes it for value...
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...and promissory notes. They can be drawn by individuals or banks and are generally transferable by endorsements. The difference between a promissory note and a bill of exchange is that this product is transferable and can bind one party to pay a third party that was not involved in its creation. If these bills are issued by a bank, they can be referred to as bank drafts. If they are issued by individuals, they can be referred to as trade drafts. ADVANTAGES OF USING BILL OF EXCHANGE * Bill of exchange fixes the date of payment. The creditor knows when to expect his money and the debtor also knows when he will be required to make payment. * A bill of exchange is a negotiable instrument and can be used in settlement of debts. * it is a written and signed acknowledgement of debt and affords conclusive proof of indebtedness. * A debtor is free from worries and enjoys full period of credit, as he can never be called upon to pay the amount of the bill before the due to date. * A creditor can convert the bill into cash by getting it discounted with the bank. SHIPMENT INVOICE This a general accounting of items sent from one individual or company to another. Standard information includes the name and location of the person or organization sending the goods as well as the name and location of the receiving party. PRO FORMA INVOICE An abridged or estimated invoice sent by a seller to a buyer in advance of a shipment or delivery of goods. It notes the kind...
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...HOLDER IN DUE COURSE The phrase ‘Holder in Due Course’ shortens considerable the heavy English equivalent ‘bona fide holder for value without notice’ and both the Indian and English Acts have adopted this phrase. Sec. 9 of the Negotiable Instruments Act stresses on a more stringent condition on a Holder in Due Course as compared to one under Section 29 (1) (b) of the Bills of Exchange Act, 1882. HE must not only have acquired the bill, note or cheque for valid consideration but should have acquired the instrument without having sufficient cause to believe that any defect existed in the title of the person from whom he received the instrument. This condition requires that he should act in good faith and with reasonable caution. However, just failure to prove bona fides, or absence of negligence on his part would adverse his claim. Section 9 of the Negotiable Instrument deals with the concept of Holder In Due Course. It is essential that a person who claims to be a holder in due course must show that he collected the instrument for valuable and lawful consideration, but Court cannot look into such lawful and valuable consideration. However, where the bona fides of the transaction is impeached, the extent of the consideration given is a factor that the court will consider in determining the question of bona fides. Consideration is something which not only party regards but the law can regard as having some value. It can be either positive in that, it requires doing of something...
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...THE NEGOTIABLE INSTRUMENT LAW SECTION . 5. Additional provisions not affecting negotiability. - An instrument which contains an order or promise to do any act in addition to the payment of money is not negotiable. But the negotiable character of an instrument otherwise negotiable is not affected by a provision which authorizes the sale of collateral securities in case the instrument be not paid at maturity; or (b) Authorizes a confession of judgment if the instrument be not paid at maturity; or (c) Waives the benefit of any law intended for the advantage or protection of the obligor; or (d) Gives the holder an election to require something to be done in lieu of payment of money. But nothing in this section shall validate any provision or stipulation otherwise illegal. Acts in addition to payment of money A negotiable instrument must be payable in “a sum certain in money.” (1) General Rule. – As a general rule, the instrument is non-negotiable if it contains a promise or order to do any act in addition to the payment of money. (par. 1.) The prohibition is based on the fact that while one could be indorsed, the other would have to be assigned. (see Sec. 30) EXAMPLES: “I promise to pay or order P1,000.00 and to deliver a horse.” (2) Exceptions. – The law, however, gives exceptions (Sec. 5 [a to d.] to the general rule. a. Sale of collateral securities. EXAMPLE: “I promise to pay P or order the sum of P10,000.00 on November 25,2004...
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...collect the sum due PROMISSORY NOTE •unconditional promise in writing made by one person to another signed by the maker •engaging to pay on demand, or at a fixed or determinable future time a sum certain in money to order or to bearer •where a note is drawn to the maker’s own order, it is not complete until indorsed by him Parties: 1. Maker—one who makes a promise and signs the instrument 2. Payee—party to whom the promise is made or the instrument is payable BILL OF EXCHANGE •unconditional order in writing addressed by one person to another signed by the person giving it •requiring the person to whom it’s addressed to pay on demand or at a fixed or determinable future time a sum certain in money to order or to bearer Parties: 1. Drawer—one who gives the order to pay money to a 3rd party 2. Drawee—person to whom the bill is addressed and who is ordered to pay 3. Payee—party in whose favor the bill is drawn or is payable When bill may be treated as promissory note. 1. Where the drawer and the drawee are the person such as, in a draft drawn by an agent on his principal by authority of the principal. 2. Where the drawee is a fictitious person. 3. Where the drawee has no capacity to contract. Referee in case of need – is the person whose name was inserted by the drawer of the bill and any indorser to whom the holder may resort in case of need – that is in case the bill is dishonored by non-acceptance or by non-payment. Note: It is the option...
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...Acres, Ltd. Holly Hill Acres, Ltd. used a promissory note and a purchase money mortgage as consideration for the transaction. The note contained language “This note with interest is secured by a mortgage on real estate made by the maker in favor of said payee. The terms of said mortgage are by reference are made a part hereof.” Subsequently, Rogers and Blythe used the note and mortgage to secure their own loan from Charter Bank of Gainesville. Within a few months, Rogers and Blythe stopped paying their loan to Charter. Charter sued to recover from Holly Hill’s note and mortgage. Negotiable instruments are an important component of transactions between unrelated parties when doing business. Negotiable instruments are regulated by Article 3 of the UCC. Article 3 requires a document must meet certain criteria in order to be classified as a negotiable instrument. The instrument must be in writing, permanent and portable, signed by the maker, and it must be an unconditional promise to pay. It has to state a fixed sum of money and not require any additional undertaking besides the payment. It also has to be payable on demand or at a definite time and be payable to order or bearer. If these conditions are met, the holder of the negotiable instrument can transfer their interest in the instrument to a third party. The third party taking the negotiable instrument from the holder becomes the holder in due course. The promissory note in this case stated above contained language...
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...Money Market Products | | | | | Money market products (T-bills, Commercial Paper and Banker’s Acceptances) are short-term fixed-income products that are sold at a discount and then mature at face value. The difference between your purchase price and par value is your return.Learn more about: * T-Bills * Banker’s Acceptances (BAs) * Commercial Paper * Crown Corporate PaperT-Bills * What are they? Treasury Bills (T-bills) are short-term debt instruments issued by both the US and Canadian governments. Similar to Federal T-bills, Provincial T-bills and promissory notes are backed in full by the issuing province. Their many attractive features make T-bills popular investment vehicles for individual, institutional, and corporate investors. T-bills offer the highest possible level of financial security. * Term/Liquidity T-bills have a maturity of one year or less and are issued in maturity terms of 30 days, 60 days, 90 days, 6 months, or one year. T-bills are highly liquid and many investors choose to hold them instead of holding cash. They may be sold at any time. * Risk/Return T-bills are considered very safe because they are fully guaranteed by the issuing government, however; they offer considerably lower returns than most other securities. * Minimum Investment Amount The minimum Par Value for purchasing a T-Bill is $10,000.00, trading in increments of $1,000.00. * Income The difference between your purchase price and par value is your return, and is...
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