Term Sheet For Series A Preference Shares In Page 6
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16Company.
Drag Along:
Shareholders shall be required to vote their shares in favor of a
Deemed Liquidation Event or transaction in which [75]% or more of
the voting power of the Company is transferred and which is
approved by the holders of [75]% of the Series A Preference Shares,
on an as-converted basis], so long as the liability of each shareholder
in such transaction is several (and not joint) and does not exceed the
shareholder's pro rata portion of any claim and the consideration to be
paid to the shareholders in such transaction will be allocated as if the
consideration were the proceeds to be distributed to the Company's
shareholders in a liquidation under the Company's then-current
Shareholders’ Agreement and Constitution.
The exercise of the Drag-Along right shall be subject to approval by
the Board, including each of the Founders.
Lock-up:
Subject to customary exceptions, the Founders may not sell, transfer,
or otherwise dispose of
any
shares
representing more than [15]% of
such Founder’s total shareholdering in the Company
for a period of
2[3]
years from the completion of the investment, with the exception
of any sale, transfer, or other disposal that is
either (i) related to
estate, succession or tax planning or (ii)
approved in writing by the
Series A Director.
Vesting:
At the date
of
which is 12 months from
Closing, [5025]% of the
Founders’ shareholding shall
immediately
vest. The remaining
[5075]% of the Founders’ shareholding shall vest at 3 month
intervals in equal installments over the following
23
years. In the
event that the Founder
voluntarily resigns or
hiss
employment with
the Company terminates for
Cause (to be defined in the Definitive
nd
Agreements)any reason
before the
42
anniversary of closing, he
undertakes to offer for sale the unvested portion of his shareholding
(“Unvested Shares”) first to the Company (subject at all times to
applicable law) [and then to all the other
shareholders]
(who shall
have the option, but not the obligation, to take pro-rata, adjusted for
those who decline to acquire) at a nominal price of [$1.00] per share.
Registration rights:
The Ordinary Shares issued or issuable upon conversion of the Series
A Preference Shares will be “Registrable Securities.”
Demand registration. Subject to customary exceptions, holders of at
least 50% of the Registrable Securities will be entitled to demand that
the Company effect up to two firmly underwritten registrations
(provided that each such registration has aggregate proceeds of at
least US$10,000,000) at any time following the earlier of (i) five
years following the closing of the financing and (ii) 180 days
6
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