Standard Term Sheet – convertible preferred
stock ：标准术语表–可转换优先股
SUMMARY OF TERMS
FOR THE SERIES A PREFERRED FINANCING OF _____________ __________, 20___
This Summary of Terms (this “Summary of Terms”) sets forth the principal terms ?proposed by the Grand Angels (“Grand Angels”) for the purchase of Series A Preferred Stock
of _________________, a __________ corporation to be formed by ________________ a Michigan limited liability company (the “Company”).
GENERAL:
Type of Security: Series A Convertible Preferred Stock, $0.001 par value per
share (the “Series A Preferred”), initially convertible on a one-to-one (the “Conversions Ratio”) basis into shares of the Company’s Common Stock (the “Common Stock”).
Investors: Grand Angels, as well as other investors designated by Grand Angels and reasonably acceptable to the Company (collectively, the “Investors”). Grand Angels would itself invest not less than [$0] and would lead the investment.
Amount Invested: A minimum of [$0] and a maximum of [$0], based upon a
pre-money valuation of the Company of [$0] and the capitalization described below.
Price Per Share: [$0] per share (the “Original Purchase Price”).* Option Pool: As contemplated by the following capitalization table and
taking into account a conversion of _________________ to a _________ C-Corporation, the Company would reserve an option pool equal to [0] shares of the Common Stock prior to the Closing so that it represents approximately [0%] of the fully diluted equity of the Company.*
Capitalization: The Company’s capital structure before and after the
Closings is set forth on EXHIBIT A attached hereto. 1
Closing: As soon as practicable following the Company’s acceptance of this Summary of Terms and satisfaction of the conditions described below under the caption “Conditions to Closing” (the “Initial Closing”).
Milestones: After the Initial Closing, the Company would agree to sell,
and Grand Angels would agree to purchase: (1) $0 in additional shares of the Series A Preferred, on the certification by the Company to Grand Angels (to Grand Angels’ satisfaction) that the events specified in EXHIBIT B
attached to this Summary of Terms have occurred; (2) $0 in additional shares of the Series A Preferred, on the certification by the Company to Grand Angels (to Grand Angels’ satisfaction) that the events specified in EXHIBIT C attached to this Summary of Terms have occurred; (3) $0 in additional shares of the Series A Preferred, on the certification by the Company to Grand Angels (to Grand Angels’ satisfaction) that the events specified in EXHIBIT D attached to this Summary of Terms have occurred; and (4) $0 in additional shares of the Series A Preferred, on the certification by the Company to Grand Angels (to Grand Angels’ satisfaction) that the events specified in EXHIBIT E attached to this Summary of Terms have occurred. TERMS OF SERIES A PREFERRED:
Liquidation Preference: Upon the occurrence of any (i) liquidation, dissolution or
winding up of the Company, (ii) a merger or consolidation (other than one in which stockholders of the Company own a majority by voting power of the outstanding shares of the surviving or acquiring corporation), or (iii) a sale, lease, transfer or other disposition of all or substantially all of the assets of the Company (the events described in the foregoing clauses (ii) and (iii) are each referred to herein as a “Deemed
Liquidation Event”), the holders of the Series A Preferred would receive an amount per Series A Preferred share, in preference to the holders of the Common Stock, equal to the Original Purchase Price, plus accrued but unpaid dividends on each share of the Series A Preferred. Thereafter, the Series A Preferred would participate with the Common Stock on an as-converted to Common Stock basis.
Dividends: Dividends on the Series A Preferred would be cumulative and accrue, in preference to any dividend on shares of the Common Stock, at a rate of 0% per annum of the Original Purchase Price, compounded quarterly. Dividends on the Series A Preferred would be payable upon a Deemed Liquidation Event or upon conversion or redemption. For 2
any other dividends or distributions, participation with Common Stock on an as-converted basis.
Optional Conversion: The Series A Preferred would initially convert on a one for one basis into shares of the Common Stock at any time at the
option of the holder, subject to adjustments for stock dividends, splits, combinations and similar events and as described below under the caption “Anti-dilution
Provisions.”
Mandatory Conversion: Each share of the Series A Preferred would automatically be
converted into shares of the Common Stock at the then applicable conversion rate (i) in the event of the closing of a firmly underwritten public offering of shares of the Common Stock with a price of not less than three times the Original
Purchase Price (subject to adjustments for stock dividends, splits, combinations and similar events) and gross proceeds to the Company of not less than $____ million (a “QPO”),
or (ii) upon the written consent of the holders of a majority of the Series A Preferred.
Anti-dilution Provisions: Unless otherwise waived by the holders of at least two-thirds
of the Series A Preferred, in the event that the Company issues additional securities at a purchase price less than the current Series A Preferred conversion price, such conversion
price would be adjusted on a full ratchet basis, provided that no such adjustment would occur with respect to (i) securities
issuable upon conversion of any of the Series A Preferred, or as a dividend or distribution on the Series A Preferred;
(ii) securities issued upon the conversion of any debenture, warrant, option, or other convertible security outstanding as of the date of the Initial Closing; (iii) shares of the Common
Stock issuable upon a stock split, stock dividend, or any
Standard Term Sheet – convertible preferred stock ：标准术语表–可转换优先股
