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					                                              TERM SHEET
                                              OF
                                       [NAME OF COMPANY]
                                                April 2010

THIS TERM SHEET SUMMARIZES THE PRINCIPAL TERMS OF THE PROPOSED FINANCING OF THE
COMPANY AND IS NON-BINDING. NO LEGALLY BINDING OBLIGATIONS ARE CREATED UNTIL
DEFINITIVE AGREEMENTS ARE EXECUTED AND DELIVERED BY ALL PARTIES. THIS TERM SHEET IS
NOT A COMMITMENT OF THE COMPANY TO ISSUE ANY SECURITIES, AND IS CONDITIONED ON THE
COMPLETION OF DUE DILIGENCE, LEGAL REVIEW AND DOCUMENTATION THAT IS SATISFACTORY TO
THE INVESTORS AND THE COMPANY.



  Issuer:              [NAME OF COMPANY], a [STATE OF INCORPORATION] Corporation (the
                       "Company").

  Aggregate            Up to an aggregate offering of $[ENTER THE AMOUNT OF THE OFFERING]
  Offering:            USD, ( the “Maximum Offering”) representing the sale of [NUMBER OF
                       SHARES] of the Company.

  Type of              [SERIES A PREFERRED STOCKi [of the Company (the “Series A Preferred”)] or
  Security:            [COMMON STOCK [of the Company (the “Common Stock”)].

  Valuation:           The price of the [[SERIES A PREFERRED] [OR] [COMMON STOCK]
                       (the“Purchase Price”), shall be based upon a pre-money valuation of $[PRE
                       MONEY VALUATION AMOUNT] so that the Maximum Investment will represent
                       %[PERCENTAGE OWNERSHIP ON CLOSING] ownership of the Company
                       immediately following the financing.

    [Traunches]        [The investment amounts (the “Traunches”) shall be divided into three increments,
                       known herein as the “First Traunches”, the “Second Traunches”, and the “Third
                       Traunches”, and shall be taken down upon the conditions precedent set forth below]:

  [First]              [OPTION 1: INITIAL CLOSINGS AND TIMEFRAME]
  Traunches:           At the initial closing, the Company shall sell at least [NUMBER OF SHARES] of
                       [SERIES A PREFERRED [OR] [COMMON STOCK] of Series A Preferred to
                       investors (the "Initial Closing"). The target date for the Initial Closing is within
                       [NUMBER OF DAYS, USUALLY 30, 60 or 90 DAYS] days after execution of this
                       Term sheet. Subsequent closings may occur within [NUMBER OF DAYS
                       USUALLY 90, 120, OR 180] days of the Initial Closing until the Maximum
                       Investment has been sold.

      [Second          [OPTION 2: SECOND TRAUNCHES BASED ON MILESTONES]
    Traunches]:        [NUMBER OF SHARES] are to be purchased by investors based upon the
                       reasonable demonstrations that the following milestones have been achieved:
                       [LIST MILESTONES] (collectively, the “Milestones”) and shall be prepared for
                       investors for demonstration no later than [DATE].

      [Third           [NUMBER OF SHARES] are to be purchased on or before [DATE], conditioned
    Traunches]:        upon the successful purchase of shares in the first two Traunches.



OHS West:260885801.2
  Rights and           Dividends: The [[SERIES A PREFERRED] OR [COMMON STOCK]] will be
  Preferences:         entitled to receive non-cumulative dividends in preference to any dividend on the
                       Common Stock at the rate of [DESIGNATE 7-10%] per annum, if, when and as
                       declared by the Board of Directors. The [SERIES A PREFERRED OR COMMON
                       STOCK] Preferred participates pari passu in additional dividends with the Common
                       Stock.

                       Liquidation Preference: In the event of any liquidation, dissolution or winding up
                       of the Company, including an Acquisition (as defined below):

                       (1) the holders of [SERIES A PREFERRED] will be entitled to receive in preference
                       to the holders of Common Stock, the amount equal to the [SERIES A PREFERRED]
                       [the PURCHASE PRICE][OR][TWO, THREE, FOUR or FIVE] times the Purchase
                       Price] plus declared and unpaid dividends (the "Liquidation Preference"); and

                       (2) then, after the distribution described in clause (1) above has been made, the
                       remaining proceeds shall be distributed ratably to the holders of Common Stock.

                       The holders of [SERIES A PREFERRED] may elect to forgo the Liquidation
                       Preference and convert their shares of [SERIES A PREFERRED] into Common
                       Stock (see "Voluntary Conversion" section below).

                       A sale, conveyance or other disposition of all or substantially all of the property or
                       business of the Company, or a merger or consolidation with or into any other
                       corporation as a result of which stockholders immediately prior to the transaction
                       hold less than a majority of the voting interests of the Company (or successor) after
                       the transaction (taking account only of stock of the Company held by such
                       stockholders prior to the transaction) (collectively, an “Acquisition”), other than (i) a
                       consolidation with a wholly-owned subsidiary of the Company or (ii) a merger
                       effected exclusively to change the domicile of the Company.

                       Voluntary Conversion: Each holder of [SERIES A PREFERRED] will have the
                       right, at the option of the holder at any time, to convert shares of [SERIES A
                       PREFERRED] into shares of Common Stock at an initial conversion ratio of
                       [NOTE: FOR PURPOSES OF THIS TERM SHEET GENERATOR, ALL
                       VOLUNTARY CONVERSIONS WILL BE ONE-TO-ONE] one-to-one.

                       Automatic Conversion: The Series A Preferred will be automatically converted
                       into Common Stock, at the then applicable conversion rate, in the event of either
                       (i) the election of holders of a majority of the Series A Preferred or (ii) the closing of
                       an underwritten initial public offering of the Company’s Common Stock pursuant to
                       a Registration Statement under the Securities Act of 1933, as amended.

                       Voting Rights: The Series A Preferred shall vote together with the Common Stock
                       on an as-converted basis, and not as a separate class, except as set forth in the
                       following sentence or as required by law. Without the approval of a majority of the
                       Series A Preferred, the Company will not take any action that would alter or change
                       the rights, preferences or privileges of the Series A Preferred so as to materially and
                       adversely affect such shares.


                                                       2
OHS West:260885801.2
                       Information Rights: The Company will deliver to each investor annual unaudited
                       financial statements.

  Registration         Standard piggyback and Form S-3 registration rights.
  Rights:

  Financing            The financing agreements shall be drafted by counsel to the Company.
  Documents:

                                         [Signature Page Follows]




                                                     3
OHS West:260885801.2
THIS TERM SHEET SUMMARIZES THE PRINCIPAL TERMS OF THE PROPOSED FINANCING OF THE COMPANY
AND IS NON-BINDING. NO LEGALLY BINDING OBLIGATIONS ARE CREATED UNTIL DEFINITIVE AGREEMENTS
ARE EXECUTED AND DELIVERED BY ALL PARTIES. THIS TERM SHEET IS NOT A COMMITMENT OF THE
COMPANY TO ISSUE ANY SECURITIES, AND IS CONDITIONED ON THE COMPLETION OF DUE DILIGENCE,
LEGAL REVIEW AND DOCUMENTATION THAT IS SATISFACTORY TO THE INVESTORS AND THE COMPANY.



COMPANY:

(YOUR COMPANY NAME)

By:

Name:

Title:

Date:



INVESTOR:

______________________

By:

Name:

Title:

Date:

Investment Amount: $




ii


i
“ STOCK” and “SHARES” will need to be adjusted based upon jurisdiction.
ii




OHS West:260885801.2

				
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