term sheet template 2014

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PRIVATE & CONFIDENTIAL ABC Sdn. Bhd. – Investment Term Sheet This Investment Term Sheet is subject to final verification and approval by the Board of Directors of the Company (hereinafter referred to as “Promoters”). Investor Name and MyKad number (or Company Name & Co. No.): Mr. [Full Name as in MyKad] holder of MyKad No. [number] (hereinafter referred to as “[Name]”) Aggregate Amount of Investment: (“Investment Sum”) An investment of RMxxx (Ringgit Malaysia: xxx only). Valuation of the Company at time of investment: (“Valuation”) The company shall be valued at RMxxx (Ringgit Malaysia: xxx only). Issue Price per share: To be determined by the Company Secretary. Securities to be issued: Ordinary Shares of ABC Sdn. Bhd. having par value of RM1.00 each together with the rights set herein towards an enlarged equity shareholding of 10% (ten percent) of the company. Such ordinary shares to rank pari passu with the existing ordinary shares in the Company. Use of Investment: Proceeds are to be used for working capital including salaries and benefits; and marketing, advertising and promotion. Definitive Agreements:

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Term Sheet template from Investor 101 session by Dr. V. Sivapalan

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Page 1: Term Sheet Template 2014

PRIVATE & CONFIDENTIAL

ABC Sdn. Bhd. – Investment Term Sheet

This Investment Term Sheet is subject to final verification and approval by the Board of Directors of the Company (hereinafter referred to as “Promoters”).

Investor Name and MyKad number (or Company Name & Co. No.): Mr. [Full Name as in MyKad] holder of MyKad No. [number](hereinafter referred to as “[Name]”)

Aggregate Amount of Investment: (“Investment Sum”) An investment of RMxxx (Ringgit Malaysia: xxx only).

Valuation of the Company at time of investment: (“Valuation”) The company shall be valued at RMxxx (Ringgit Malaysia: xxx only).

Issue Price per share:To be determined by the Company Secretary.

Securities to be issued:Ordinary Shares of ABC Sdn. Bhd. having par value of RM1.00 each together with the rights set herein towards an enlarged equity shareholding of 10% (ten percent) of the company. Such ordinary shares to rank pari passu with the existing ordinary shares in the Company.

Use of Investment:Proceeds are to be used for working capital including salaries and benefits; and marketing, advertising and promotion.

Definitive Agreements:Contemplates the execution of a Shareholders Agreement.

Signing Date of Term Sheet and Completion:Anticipated signing of the Term Sheet by [date]. Investors must complete payment of the Investment Sum within 7 days of the signing of the Term Sheet failing which the Investment Sum becomes immediately due and payable.

Payment of Investment Amount:The entire investment of RMxxx is payable upon completion.

Conditions of Closing:

Page 2: Term Sheet Template 2014

Consents and approval from the Board of Directors and all existing shareholders of ABC Sdn Bhd accepting Investor’s participation in the shareholding of ABC Sdn Bhd.

Completion Drawdown:Complete Drawdown upon signing of the Term Sheet and approval by the Board of Directors and all existing Shareholders of the Company, completion of all necessary conditions precedent and payment of all monies due by Investors. The Company Secretary shall be instructed to issue share certificates to the Investors within 7 working days of completion of payment and bank clearance.

Voting Rights:Holders of Ordinary Shares shall be entitled to attend and vote at all general meetings and have all rights to rank pari passu with the existing shareholding in the Company.

Specific Rights of First Refusal:If any shareholder proposes to offer or transfer any of their shares, existing holders of the Ordinary Shares shall have a right of first refusal in the proportion of their existing shareholding in the Company.

Composition of the Board of Directors:The Investing Party is [entitled to x seats/ is not entitled to any seats] on the Board of Directors [but may be appointed in the future as and when necessary].

Board of Advisors:Investors shall however, subject to their consent and the consent of the Directors, be appointed as members of the Board of Advisors of ABC. Until determined otherwise, the Board of Advisors will not be paid any fee or stipend.

Compensation for Advisors & Non-Executive Members of the Team:Advisors and Non-Executive Members of the team may be compensated either financially or via a stock option scheme in the future based on their contribution to the Company and the growth of the Company.

Further covenants: Promoters and the company covenant to their best knowledge that prior to closing there is no adverse change in the prospect, business, operation or financial condition of the company.

The validity of the above tentative terms shall expire within 14 days from [date].

Kindly acknowledge the acceptance of the above said terms.

Signed for and on behalf of ABC Sdn. Bhd. :

Page 3: Term Sheet Template 2014

………………………………………Name: …………. (Director & CEO)Date:

Accepted by the Investor:

………………………………………Name: Date: