TERM SHEET FOR PRIVATE PLACEMENT OF "A" PREFERENCE SHARES BY

[Insert Company Name] LIMITED

[Date]
The following is a summary of the principal terms with respect to the proposed "A" Preference Share
issue by [insert company name] Limited, a company incorporated in [insert state], Australia (the
Company!"# $%cept for the section entitled &inding Terms,! this summary of terms does not
constitute a legally binding obligation on the parties# Any other legally binding obligation will only be
made pursuant to definiti'e agreements to be negotiated and e%ecuted by the parties#
Offering Term
Securities to (ssue) "A" Preference Shares of the *ompany#
Aggregate (ssue
Price)
+[insert total issue proceeds] in aggregate#
(n'estors) [insert name of accredited Investors approved by the Company] (the
Investors!"#
Price Per Share) [insert issue price per share] (the Original Issue Price!", based on a pre,
money 'aluation of +[----], including a notional a'ailable option pool of
.rdinary Shares of a number that is/01 of the total issued share capital of the
*ompany from time to time, as illustrated in the table below#
Li2uidation
Preference)
.ne times the .riginal (ssue Price plus declared but unpaid di'idends on each
"A" Preference Share, balance of proceeds paid to .rdinary Shareholders#
Such preference will apply on a winding up, reduction of capital or a sale of all
of the shares or substantially all of the business of the *ompany#
*on'ersion) *on'ertible into one .rdinary Share at any time at the option of the holder#
3oting 4ights) 3otes together with the .rdinary Shares on all matters on an as,con'erted
basis# Appro'al of a ma5ority of the "A" Preference Shareholders re2uired to (i"
ad'ersely change rights of the "A" Preference Shares6 (ii" authori7e a new
class of Preference Shares ha'ing rights senior to or on parity with the "A"
Preference Shares6 (i'" redeem or buy bac8 any shares6 ('" declare or pay any
di'idend6 ('i" change the number of directors6 or ('ii" li2uidate or wind up the
*ompany, including any change of control#
9ocumentation) 9ocuments will be based on Start:ate;s standard form Subscription
Agreement, Shareholders; Agreement, *onstitution and ancillary documents#
<inancial
(nformation)
(n'estors who ha'e in'ested at least +=0,>>> (Major Investors!" will recei'e
standard information and inspection rights and management rights letter#
Participation 4ight) :a5or (n'estors will ha'e the right to participate on a pro rata basis in
subse2uent issuances of e2uity securities#
&oard of 9irectors) Two directors elected by holders of a ma5ority of .rdinary Shares, one elected
by holders of a ma5ority of "A" Preference Shares#
<uture 4ights) The "A" Preference Shares will be gi'en the same rights as any future classes
of Preference Shares (with appropriate ad5ustments for economic terms"#
<ounder :atters) $ach founder shareholder shall be sub5ect to delayed 'esting of .rdinary
Shares for a three year period beginning on the date that ;"A" Preference
Shares are first issued to (n'estor(s" ("C!mmen"ement Date""# .ne 2uarter
of each founder shareholder;s .rdinary Shares will 'est on the
*ommencement 9ate and thereafter one si%th of the balance shall 'est on the
last date of e'ery si% months (sub5ect to the founder remaining eligible to be
issued .rdinary Shares", as illustrated in the table below# <ounders will ha'e
'oting rights from the *ommencement 9ate as if />>1 of the .rdinary Shares
'ested on the *ommencement 9ate# ?pon a sale of the *ompany and
termination of the founder;s employment without cause, all founder shares will
immediately 'est# $ach <ounder shall ha'e assigned all rele'ant (P to the
*ompany prior to closing#
Date !f i#e !f
$are
N#m%er !f "A"
Preferen"e
S$are
N#m%er !f
Or&inar'
S$are
N!ti!na( !)ti!n
)!!( !f
Or&inar'
S$are !f *+,
!f i#e& $are
"a)ita(
i" [(nsert
*ommencement
9ate]
[@0] (/>>1 of "A"
Preference
Shares"
[=A/] (=01 of
.rdinary Shares"
?p to [BC] in the
aggregate
ii" D C months
from date in i"
, [//C] (/=#01 of
.rdinary Shares"
?p to [ ] in the
aggregate
iii" D /= months
from date in i"
, [//C] (/=#01 of
.rdinary Shares"
?p to [ ] in the
aggregate
i'" D /E months
from date in i"
, [//C] (/=#01 of
.rdinary Shares"
?p to [ ] in the
aggregate
i" D =B months
from date in i"
, [//C] (/=#01 of
.rdinary Shares"
?p to [ ] in the
aggregate
'i" D A> months
from date in i"
, [//0] (/=#01 of
.rdinary Shares"
?p to [ ] in the
aggregate
'ii" D AC months
from date in i"
, [//0] (/=#01 of
.rdinary Shares"
?p to [ ] in the
aggregate
T.TAL [@0] (/>>1 of A
Preference
SharesF@#01 of
issued share
capital"
[G=0] (/>>1 of
.rdinary
SharesFG=#01 of
issued share
capital"
&inding Terms) <or a period of thirty days, the *ompany agrees not to solicit offers from other
parties for any financing# Hithout the consent of (n'estors, the *ompany will
not disclose these terms to anyone other than officers, directors, 8ey ser'ice
pro'iders, and other potential (n'estors in this financing#
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