TERM LINEN FOR POTENTIAL
IN [NAME OF CORPORATION] /
AND STRATEGIC CONNECTIONS
This term sheet summarizes the principal terms with respect to a potential private placement of equity investments of [NAME OF CORPORATION] (the " CompanyвЂќ) by [NAME OF INVESTOR] (" InvestorвЂќ) and related tactical alliance. This term sheet is intended only as a basis for further discussion and is certainly not intended to be and constitute a legally holding obligation. No legally holding obligations will probably be created, intended, or deduced until a document in final contact form entitled " Series Stock Purchase Agreement, вЂќ is definitely executed and delivered by all parties. Without limiting the generality in the foregoing, is it doesn't parties intention that, till that event, no agreement shall can be found among them and there shall be no requirements whatsoever based upon such things as parol evidence, extended negotiations, " handshakes, вЂќ oral understandings, or methods of conduct (including reliance and changes of position). / The Company as well as the Investor will be discussing a private placement of shares of Desired Stock within the following conditions: Amount of Investment: dollar[N] /
Valuation of the Business: $[N] Pre Money / on a totally diluted basis $[N] Content Money over a fully diluted basis
Sort of Security: Shares of the Company's Series Recommended Stock (" PreferredвЂќ), descapotable into stocks of the Provider's Common Stock (" CommonвЂќ).
Price Every Share: $[N] (" First Purchase PriceвЂќ).
Capitalization of the Company: The current capitalization in the Company is placed forth in Exhibit 1, and the capitalization of the Organization after this suggested financing is defined forth in Exhibit installment payments on your / Privileges, Preferences, Privileges and Constraints of Preferred Stock: (1) Dividend Provisions: [Starting on [DATE]], the holders of the Preferred will be eligible for receive payouts [at the rate of [N]% from the Original Buy Price] whenever funds are lawfully available so when and as reported by the Table. No gross shall be paid out on the Prevalent at a rate greater than the rate at which dividends will be paid on Preferred (based on the number of shares of Common in to which the Favored is descapotable on the particular date the dividend is declared). Dividends about Preferred will be in preference to payouts paid on the Common. Returns on the Favored will be noncumulative. /
(2) Liquidation Desire: In the event of virtually any liquidation, mold or turning up of the organization, the cases of Favored will be allowed to receive instead of the owners of Common / an amount (" Liquidation PreferenceвЂќ) equal to the Original Price plus any kind of dividends announced on the Favored but not paid out [and then to share with the slots of the Prevalent in the staying assets with an as if converted basis]. as well as At the accessibility to the owners of Favored, the implementation by the Organization or alternative party acquirers of the transaction or perhaps series of deals in which much more than [50%/ 80%] of the voting power of the Company is discarded to a sole person or group of associated persons or perhaps the consolidation or merger from the Company with or in any other corporation or businesses or the sale of all or considerably all of their assets should be deemed as a liquidation, grave or winding up for uses of the liquidation preference.
(3) Conversion: A holder of Preferred will have the right to convert Preferred, with the option of the holder, without notice, into stocks and shares of Prevalent. The total range of shares of Common into which Desired may be transformed initially will be determined by dividing the Original Cost by the transformation price. Your initial conversion cost will be the First Purchase Price. The conversion cost will be the subject matter of modification to echo stock dividends, stock divides and identical events as provided in paragraph (5) below.
(4) Automatic Change: / The most well-liked will be automatically converted into Common, at the in that case applicable change price, after...