Angel Fund Promissory Note Term Sheet

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I. Introduction

This Angel Fund Promissory Note Term Sheet ("Term Sheet") outlines the terms and conditions of a loan agreement between [Your Company Name] ("Lender") and [Borrower's Company Name] ("Borrower"). This document serves as a preliminary agreement before the finalization of the loan. The terms herein are subject to negotiation and mutual agreement between the parties.

II. Loan Details

1. Loan Amount: The Lender agrees to provide a loan in the amount of [$50,000] to the Borrower.

2. Interest Rate: The loan shall accrue interest at an annual rate of 5.5%.

3. Term: The term of the loan shall be 36 months, commencing on the date of disbursement.

III. Repayment Terms

1. Repayment Schedule: The Borrower shall repay the principal amount and accrued interest in 60 equal installments of [$1,200] each, payable every month.

2. Prepayment: The Borrower may prepay the loan, in whole or in part, at any time without penalty.

IV. Conversion Rights

1. Conversion Option: At the Lender's discretion, the outstanding principal amount of the loan, plus accrued interest, may convert into equity of the Borrower at the next qualified financing round.

2. Conversion Terms: The conversion rate shall be determined based on the valuation of the Borrower's equity in the subsequent financing round.

V. Representations and Warranties

1. Borrower's Representations: The Borrower represents and warrants that:

   • The Borrower has the authority to enter into this agreement.

   • The information provided to the Lender is accurate.

   • The Borrower is not in default elsewhere.

2. Lender's Representations: The Lender represents and warrants that:

   • The Lender has the authority to enter into this agreement.

   • The Lender is licensed to provide loans.

   • The agreement complies with all laws.

VI. Miscellaneous

1. Governing Law: This Term Sheet shall be governed by and construed by the laws of [Jurisdiction], without regard to its conflict of law principles.

2. Confidentiality: The terms of this Term Sheet are confidential and may not be disclosed to any third party without the prior written consent of both parties.

VII. Execution

This Term Sheet is subject to negotiation and execution by authorized representatives of both parties. By signing below, the parties acknowledge their agreement to the terms outlined herein.

Lender:

[Your Name]
[Your Title]

[Date Signed]

Borrower:

[Borrower's Representative Name]
[Borrower's Title]

[Date Signed]

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