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Embed code for: GrowthPoint Series A-2 Term Sheet Oct 2016
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THIS DOCUMENT IS NOT TO BE CONSIDERED A SOLICITATION TO BUY OR SELL ANY SECURITY. THE TERMS OUTLINED ARE SUMMARY IN NATURE, AND ANY AGREEMENT MUST BE REFLECTED IN ONE OR MORE COMPREHENSIVE, LEGALLY BINDING DOCUMENTS. THE TRANSACTION IS ALSO SUBJECT TO DUE DILIGENCE PROCEDURES.
GROWTHPOINT GLOBAL INC.
MEMORANDUM OF TERMS
Convertible Series A-2 Preferred Shares
October ____, 2016
GrowthPoint Global Inc., a Delaware corporation (the “Company”).
____________________________ (the “Investor”)
Convertible Series A-2 Preferred Shares (“Series A-2 Preferred Shares”).
$______________________ Total Investment at Closing.
Price per Share
Price per share to be determined on a fully-diluted basis. Based on a $48,000,000 pre-money valuation. (approximately $5.86 per share).
Use of Proceeds
The Company will use net proceeds of the Offering to provide for general working capital purposes.
$3,727,330.00 in principal amount of convertible notes payable, with accrued interest (convertible into non-voting Series A-1 Convertible Preferred Shares) and 6,192,252 Common Shares issued and outstanding. No Convertible Series A-2 Preferred Shares issued and outstanding.
All convertible notes will be converted into Series A-1 Preferred Shares on or prior to the Closing Date as a condition to the Closing.
At any time, or upon receipt of a notice by the Company of a liquidity event, the Investor will have thirty (30) days to elect to convert Series A-2 Preferred Shares into Common Shares. The Series A-2 Preferred Shares are convertible into Common Shares of the Company on a 1 for 1 basis at the option of the Investor up and to the date of Liquidity event.
In the event the Investor wishes to convert some of the Preferred Shares they may do so in any amount from 1 to 100% of their Preferred Shares holdings up and to the date of the Liquidity Event.
A Liquidity Event is defined as the sale of a majority interest in the Company’s common stock, public offering pursuant to a registration statement under the Securities Act of 1933, as amended or upon the Company’s acquisition or merger into a publicly traded corporation.
The Company will pay a dividend on the Preferred Shares if and when the Board of Directors elects to declare dividends.
On liquidation, senior to Common Shares or any future issuance of common shares. First to the original purchase price of the Series A-2 Preferred Shares plus any declared, but unpaid dividends. Thereafter, the Series A-2 Preferred Shares shall have no right to receive any additional distributions.
Holders of Series A-2 Preferred Shares will vote with the Holders of Common Stock, on an as-converted basis.
Preferred Shares are subject to the rights of creditors of the Company.
Closing of the Offering is anticipated to occur on or about November 30, 2016 (“Closing Date”).
State of Delaware
This term sheet is confidential, and none of its provisions or terms shall be disclosed to anyone who is not a prospective purchaser of the securities contemplated herein, an officer or director of the Company or their agent, adviser or legal counsel, unless required by law.
Delivery of Certificates
Certificates for Preferred Shares will be delivered to Investor within 20 business days of Closing.
No Undisclosed Liabilities or
Event Requiring Disclosure
The Company will represent that (i) it has no undisclosed liabilities other than in the ordinary course of business (which individually or in the aggregate do not have a material adverse effect on the condition of the Company) and (ii) there are no events or circumstances requiring disclosure which have not been disclosed.
The Company will indemnify, hold harmless, reimburse and defend each Investor, and each of its officers, directors, agents, affiliates, control persons, and principal shareholders, against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Investor which results, arises out of or is based upon: (i) any misrepresentation by the Company or breach of any warranty by the Company; or (ii) any breach or default in performance by the Company of any covenant or undertaking to be performed by Company.
Each Investor will indemnify, hold harmless, reimburse and defend the Company, and each of its officers, directors, agents, affiliates, control persons, and principal shareholders, against any claim, cost, expense, liability, obligation, loss or damage (including reasonable legal fees) of any nature, incurred by or imposed upon the Investor which results, arises out of or is based upon: (i) any misrepresentation by the Investor or breach of any warranty by the Investor; or (ii) any breach or default in performance by the Investor of any covenant or undertaking to be performed by the Investor.
The Company and the Investors will each bear their own expenses in connection with the purchase and sale of the Preferred Shares.
As required by the Investors, the Transaction Documents may contain other terms not specified above that are agreed to by the Company
The offering is also subject to the negotiation and execution of definitive legal documentation, the terms of which may vary from the terms of this Term Sheet. Each Investor, alone or together with its own personal counsel or advisors, should review such documentation for itself. The terms of such final documentation will represent all of the agreements between the Company and the Investors.
Other than with respect to the Section labeled “Confidentiality” above (which section is intended to be binding upon the parties hereto), this Memorandum of Terms and the proposed terms set forth above do not constitute a binding agreement or commitment of the Investors, the Company or any of their affiliates. Any agreement or commitment will only be contained in definitive agreements (containing the usual representations, warranties, conditions and covenants for this type of transaction) to be negotiated, executed and delivered, if at all, after the completion of appropriate due diligence and approval of the Company’s Board of Directors. Either party to the negotiations may terminate negotiations at any time for any reason and each party will bear its own expenses if a definitive agreement is not signed.
As if the date written below, the undersigned hereby acknowledge and agree that the terms of this term sheet are acceptable as a basis for negotiating an investment in the Company by the Investor and additional investors, and agree to be legally bound only by the terms contained under the heading “Confidentiality”).
Name: Preston Clark, CEO
Name of Investment Entity: _______________________________
CONFIDENTIALidential, and none of its provisions or terms shall be disclosed to anyone who is not a prospective purchaser of the securities contemplated herein, an officer or director of the Company or their agent, adviser or legal counsel, unless required by law.
The Company will indemnify, hold harmless, reimburse and defend each Investor, and each of its officers, directors, agents, affiliates, control persons, and principal shareholders, against any claim, c