COMPANY A SUMMARY OF PROPOSED TERMS AND CONDITIONS ISSUANCE OF COMMON SHARES

Transcription

1 COMPANY A SUMMARY OF PROPOSED TERMS AND CONDITIONS ISSUANCE OF COMMON SHARES This term sheet ( the Term Sheet ) summarizes the principal terms and conditions with respect to the proposed investment. Offering terms Founder(s): Founder. and Founder.. Current shareholders: Founder 1: X% Founder 2: X% Amount of financing:... Investors: (Investment Companies) Milestones: The amount of financing is payable in... tranches. Ä The 1 st tranche comprises: Ä The 1 st tranche is payable at.... The final tranche comprises: Ä... The final tranche will be payable upon the successful completion of the operational and financial milestone(s). Milestone 1:... Milestone 2:...

2 Share price and valuation:..,.. per share representing a fully diluted pre-money valuation of. [the Initial Valuation ]. In case three years after the date of the Closing a situation of clear underperformance occurs in relation to the Business Plan and Financial Plan (the Underperformance ), the stake of LEAD INVESTOR will be corrected to *****, representing a fully diluted pre-money valuation of ********. Anticipated closing date:... (the Closing ). Parties can mutually decide to postpone this date, if necessary. Exit/liquidation preference: liquidation preference? (Yes/No) carried interest (percentage) Other Rights: drag along (Yes/No) (percentage of shares, who) tag along (Yes/No) (percentage of shares, who) Board representation: At the Closing/ at first request, the Board of Directors will consist of minimal... members comprised of (i) (ii) (iii) (iv) (v) (vi)

3 Consent rights: The Company s articles of association, or any other constitutive corporate documents, will be amended to contain restrictions requiring prior approval of the Board of Directors and the Investors, as the case may be, for certain resolutions of the Management Team which have a material effect on the Company s operations or management. In addition, these documents will contain restrictions making certain resolutions of the general meeting of shareholders subject to the prior approval of the Investors. At Board level, these rights will relate to: Management, management support and employee matters Management team: At the Closing, the Management Team of the Company will consist of... (name) as Chief Executive Officer,... (name) as CTO, (name) as M&S Director and... (name) as CFO ( the Managers ). The Managers commit themselves to manage the Company for at least the coming... years under the terms and conditions of a Management Agreement to be agreed on. The Management Agreement(s) will include targets for performance and related provisions. The Company will, on a best effort basis, hire a CEO within 6 month period following the Closing. Other matters relating to management that are agreed on (e.g. badleaver clause, ) can be included hereafter.

4 Other matters Fees and Expenses: The Company will pay reasonable fees and expenses incurred by the Investors in connection with (the preparation of) the transaction contemplated by this Term Sheet, including (but not limited to) expenses in connection with the preparation of legal documentation and the conduct of due diligence investigation(s). Costs for due diligence activities and preparation of contract documentation will only be induced after a Term Sheet has been signed. For selected due diligence activities, external experts will be hired. In case no transaction takes place, the costs related to due diligence activities and the preparation of Contract Documentation will be paid by.... Executed in.. originals in.on and each party acknowledging having received one original hereof: (The Company) Founder(s)) Represented by (The Name: Title: Director Name: Title:

5 Name : Name: Title: Director Title: : Which make themselves strong for that all current shareholders of the Company agree and commit themselves with this Term Sheet and the support management support Term Sheets. (Investment company) Represented by