[COMPANY NAME]
ROUND A FINANCING
TERM SHEET
JANUARY 8th, 2013
OFFERING TERMS:
Issuer:
__________________, ACN _________, an Australian
company (the "Company")
Founder:
______________
Investors:
Various investors (as named in the Schedule A)
Amount of Financing:
up to $AUD________ (the "Investment Amount").
Minimum to close:
$AUD_______
Closing:
On 30th of March, 2013 (the “Closing Date”) or when
minimum to close is committed.
Type of Security:
Common Shares of the Company par value AUD 0.01 each
(the "Common Shares").
Valuation:
Pre-money - $AUD_______
Price per share - $AUD_____
Stock Options
The Company will increase the authorized pool of options
prior to the financing to bring the total unallocated options to
at least the following percent: 15%. New options to be issued:
________
Use of Proceeds:
The Company shall use the funds received from the Investors
to continue the development of the Company's products,
designing prototypes and new products, registration of
patents, user acquisition, sales and marketing programs and
provide general working capital, as shall be detailed in a work
plan, which shall be attached to the definitive agreements and
pursuant to a work plan approved from time to time by the
Board of Directors.
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TERMS RIGHTS AND PREFERENCES OF THE COMMON SHARES:
Liquidation Preference:
There is no liquidation preference for Common Shares.
Voting Rights:
Common Shares have standard voting rights.
Board of Directors:
The Company's Board of Directors shall consist of up to three
(3) members:
The Founder has the right to appoint (2) directors;
The Investors have the right to appoint one (1) director;
Quorum for meetings of the Board of Directors shall be a
majority of the Board of Directors.
D&O Insurance:
No later than 90 days after Closing, the company shall obtain
a Directors & Officers insurance policy for at least
$AUD1,000,000 (1million).
Founder's Stock Repurchase:
The Common Shares owned by the founder are subject to the
right of repurchase by the company at the lower of (a) the fair
market value (FMV) at the time of agreement or the FMV at
the time of repurchase; or (b) $0.01 per share (if no FMV has
been determined), if the founder leaves the company within
the first four years. Such a right expires over four years on a
monthly basis after the Initial Closing (2.083% per month for
48 months).
Drag Along Rights:
In the event that, prior to any IPO, the holders of (i) a majority
of the Common Shares, and (ii) [51%] or more of the
Company's issued and outstanding share capital agree to an
offer to sell all their shares to a third party, and such offer is
conditional upon the sale of a number of shares of the
Company exceeding the number of shares held by such
shareholders, all shareholders shall be required to participate
in such sale on the same terms and conditions. Proceeds shall
be distributed pro rata among all the shareholders.
Tag Along Rights:
Any third party offer to acquire (i) any shares of capital stock
of the Company from the founder or (ii) at least 50% of the
issued and outstanding capital stock of the Company (whether
by direct purchase, merger, share exchange or otherwise),
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must include an offer to acquire all of the outstanding capital
stock.
Rights of First Offer
Keep pro rata share. Each Investor who purchases at least
A$50,000 of Common Shares will have a right of first offer,
subject to certain limitations, to purchase its pro rata portion
of any new equity securities offered by the Company, subject
to standard exclusions. The right of first offer will terminate
immediately prior to the earliest to occur of: (i) the
Company’s initial public offering; or (ii) a Change in Control.
This right expires for any investor who does not exercise this
right at each opportunity.
Other Matters:
No Finders:
No finders' fees are owed to any third party in connection with
the transactions.
Expiration:
This Term Sheet expires on the 31st of March, 2013 if not
accepted by the Company by that date.
Due Diligence:
The transactions contemplated by this Term Sheet are subject
to the satisfactory completion of due diligence by each
Investor.
Confidentiality:
This term sheet is confidential to the parties and is for the use
of the Company’s management and their advisors.
Accordingly, the information contained in this document may
not be disclosed to any third party or used to facilitate
negotiations with any third party without Investor’s and the
Company’s prior approval.
[Signature page follows]
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[Signature page to Term Sheet for Round A Financing - The Company]
AGREED TO AND ACCEPTED AS OF JANUARY ___, 2013:
____________________________
The Company
Founder:
_______________________
By: _______________________
Title: _____________________
_________________________
Investors’ representative
By: _______________________
Title: _____________________
SCHEDULE A
Investors
SYD Ventures
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