This term sheet summarizes the principal terms with respect to a potential private placement of convertible preferred equity securities. It is not a legally binding document, but rather a basis for further discussions.
Maryland Convertible Preferred Equity Securities (MOPES) Term Sheet provides a comprehensive outline of the terms and conditions associated with the issuance and conversion of convertible preferred equity securities in the state of Maryland. This term sheet serves as a crucial document for investors and issuers to understand the rights, obligations, and preferences of these securities. The Maryland Convertible Preferred Equity Securities Term Sheet typically includes various key elements such as: 1. Identification and Description: The term sheet begins by identifying the issuer and the type of securities being offered, which in this case are convertible preferred equity securities. It describes the distinguishing characteristics and features of these securities. 2. Conversion Terms: This section outlines the conversion provisions of the preferred equity securities. It covers conversion ratios, conversion prices, conversion triggers, and any anti-dilution protections. It also details the mechanics and procedures involved in the conversion process. 3. Liquidation Preference: The term sheet specifies the rights of the preferred equity holders in case of a liquidation event, such as bankruptcy or winding up. It explains the order of priority for the distribution of proceeds, including any preferences or seniority granted to the convertible preferred equity securities. 4. Dividend or Distribution Rights: The term sheet details the rights of the preferred equity holders to receive dividends or distributions, if any, and the related terms such as frequency, rate, cumulative or non-cumulative nature, and any participation rights. 5. Voting Rights and Control: This section outlines the voting rights associated with the convertible preferred equity securities. It explains the circumstances under which the preferred equity holders are entitled to vote and the extent of their voting power, including any special voting rights or protections. 6. Redemption Terms: The term sheet may include provisions related to the redemption of the convertible preferred equity securities, such as mandatory redemption, optional redemption, or redemption at the option of the holder. It covers redemption prices, notice periods, and any other relevant conditions. 7. Protective Provisions: This section outlines any additional protective provisions granted to the preferred equity holders, such as veto rights on specific actions, board representation, or information rights. These provisions aim to safeguard the interests of the investors. 8. Governing Law and Jurisdiction: The term sheet specifies the governing laws of Maryland and the chosen jurisdiction for resolution of any disputes or legal matters arising from the convertible preferred equity securities. While the term sheet mentioned above captures the essential components, it's also important to note that specific variations and additional terms may exist depending on the unique characteristics or requirements of each offering. Examples of different types of Maryland Convertible Preferred Equity Securities Term Sheets may include those designed for specific industries, startups, or projects with distinctive requirements or considerations.
