Senior Debt Term Sheet

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I. Introduction

This Senior Debt Financing Term Sheet (the "Term Sheet") sets forth the basic terms and conditions of the proposed senior debt financing arrangement between [Your Company Name] (the "Lender") and [Borrower Name] (the "Borrower"). This document is not a legally binding agreement but serves as a preliminary understanding between the parties regarding the key terms of the loan.

II. Loan Amount and Purpose

1. Loan Amount: The Lender agrees to provide a senior debt financing facility in the amount of [$Loan Amount] to the Borrower.

2. Purpose: The loan proceeds will be utilized by the Borrower for [Describe Purpose], as outlined in the Borrower's business plan.

III. Term and Repayment

1. Term: The term of the loan shall be [Loan Term] from the date of closing.

2. Repayment Schedule:

   • Principal Repayment: The principal amount shall be repaid in [Number of Installments] equal installments.

   • Interest Payments: Interest shall accrue at a fixed rate of [Interest Rate]% per annum and shall be payable [Monthly/Quarterly/Annually].

IV. Security and Collateral

1. Security Interest: The loan shall be secured by a priority security interest in the following collateral:

   • [List of Collateral]: (e.g., accounts receivable, inventory, equipment).

2. Guarantees: The Borrower's obligations under the loan shall be guaranteed by [Guarantor Name], subject to negotiation and approval.

V. Covenants and Conditions

1. Financial Covenants: The Borrower shall maintain certain financial ratios and meet specified financial benchmarks, including but not limited to:

   • Debt Service Coverage Ratio

   • Leverage Ratio

2. Operational Covenants: The Borrower shall adhere to certain operational restrictions and requirements, including:

   • Restrictions on Capital Expenditures

   • Limits on Dividend Payments

VI. Events of Default

The occurrence of any of the following events shall constitute an event of default under the loan agreement:

• Non-payment of Principal or Interest

• Breach of Covenants

• Insolvency or Bankruptcy

VII. Fees and Expenses

1. Origination Fee: The Borrower shall pay to the Lender an origination fee equal to [Origination Fee]% of the loan amount.

2. Legal Expenses: Each party shall bear their respective legal expenses incurred in connection with the negotiation and documentation of the loan agreement.

VIII. Governing Law and Jurisdiction

This Term Sheet shall be governed by and construed by the laws of the State of [Your State]. Any disputes arising out of or in connection with this Term Sheet shall be subject to the exclusive jurisdiction of the courts of [Your State].

IX. Confidentiality

The parties agree to keep confidential the terms of this Term Sheet and any information exchanged in connection with the negotiation of the loan agreement, except as required by law or regulatory authorities.

X. Miscellaneous

Any other terms and conditions not explicitly set forth herein shall be subject to negotiation and agreement by the parties.

By signing below, the parties acknowledge that they have reviewed and agreed to the terms and conditions outlined in this Senior Debt Financing Term Sheet.

[Your Company Name] (Lender)

[DATE SIGNED]

[BORROWER'S NAME] (Borrower)

[DATE SIGNED]

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