A RCH C APITAL A DVISORS
TERM SHEET
Mezzanine Debt
This term sheet does not constitute an offer and is solely for discussion purpos.This term sheet shall not be construed as creating any obligations on any party whatsoever,and shall not be binding on any party unless the conditions contained herein are satisfied and the terms of the propod investment are contained within definitive documents which are negotiated,executed and delivered in connection with the closing of such investment. Borrower/Issuer:[__________]and its controlled affiliates and subsidiaries
(“Issuer”or the“Company”).
Equity Sponsors:[__________],and other person acceptable to Purchar
(including any affiliates thereof).
Subordinated Notes/[Principal Amount]:Subordinated Notes in a principal amount up to
$[_________](the“Notes”).
Purchar:[]("Purchar").
Credit Facilities:[________].
Agent,Arranger,Underwriter:[________].
Expiration:This Term Sheet expires on[___].An extension may be
granted by Purchar at the formal request of the Borrower
and/or Equity Sponsor.
Targeted Closing Date:[________].
Purcha Price:[___]%of the Face Amount(“Par”).If market conditions
change,Purchar has the right to review the pricing
structure.
Amortization:Bullet payment at Maturity.
Maturity:[___________]years from closing.
Purpo:To provide financing for the[acquisition of______.] Security:Secured obligations by cond lien on all asts. Guarantee:The[Borrower's parent and its]subsidiaries shall provide
guarantees of the Notes in form satisfactory to Purchar.
Interest Rate:The Notes will bear interest at a fixed annual interest rate
equal to[____]percent([_____]%),payable each calendar
quarter in arrears,[of which[_____]percent([____]%)will
be paid in cash and[____]percent([_____]%)will be paid-
in-kind.]Interest will be calculated on the basis of a360day
year of twelve30day months.
Up Front Fee:Purchar will receive a fee equal to[___]percent[___]%of
the total amount of the Notes purchad by Purchar at
closing.
Default Rate:[__]%in excess of the applicable rate.
Optional Prepayment The Notes may be prepaid in accordance with the schedule
below at the following redemption prices(expresd in
percentages of principal amount to be repaid),plus accrued
interest to the date of prepayment:
Loan Year Redemption Price
1[___]%
2[___]%
3[___]%
4[___]%
5[___]%
thereafter[___]%
Mandatory Repayment:The Company may be required by the Purchar to repay the
Notes upon a Liquidity Event(defined as a liquidation,
winding up,change of control,merger,sale of all or
substantially all of the asts of the Company or an initial
public offering).Repayments under this clau will be at the
prices t forth above under the Optional Prepayment clau. Subordination:The Notes will be subordinate in payment to the nior debt
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of the Borrower or terms acceptable to Purchar.Other
customary terms and conditions,as well as provisions will be
applied.The Notes will be nior to all existing and future
subordinated debt and ller debt.
Warrants[or Equivalent Shares]:[At the closing of the transaction,the Purchar will receive
detachable and freely transferable warrants or other curities
which provide an equivalent equity value in the Company
(the“Warrants”)to acquire[____]%of the fully diluted
stock or value in the Company at closing.The Warrants will
have a nominal exerci price and will include a cashless
exerci feature as well as put provisions.In addition,
Purchar will receive demand,and unlimited piggyback
registration rights;tag along/co-sale,pre-emptive and anti-
dilution provisions satisfactory to Purchar.]
or
[The Subordinated Notes will be sold with detachable and
transferable warrants for the purcha of shares at a nominal
price(including a cashless exerci feature)reprenting
[__]%of the fully diluted stock.This warrant position
assumes that all of the equity contributed by the Equity
Sponsors will be in the form of common stock,and should
the contribution be made in a form of curity which
provides for any form of dividend in cash or payment-in-
kind,then the warrant amount shall be adjusted on or before
the closing of the Acquisition to maintain a return to the
investors as if the equity had been contributed as common
equity.The warrants will expire[__]years from closing,be
immediately exercisable,and will have one demand
registration and unlimited"piggy-back"registration rights(in
each ca,at the Borrower's expen)with respect to stock
issued upon exerci,customary anti-dilution provisions that
will include dilution protection in the event of issuances
below the common stock price(or common stock equivalent)
paid by the Equity Sponsors and issuances to management
and will contain put and call provisions,preemptive rights
and other terms and conditions,in each ca acceptable to
Purchar.In the event of a sale of all or substantially all of
the stock or asts of the Borrower,the stock issuable upon
the exerci of the warrants will be subject to“drag-along”
and have the benefit of“tag-along”provisions.] Registration Rights:After an Initial Public Offering,the warrant holders will have
a single demand registration right on Form S-1and unlimited
demand registration rights on Form S-3,all at the Borrower’s
expen.The warrant holders will also have a pro rata
participation right in the event of any private disposition of a
controlling interest in the Borrower.The Borrower will have
the right to require the warrant holders to participate on a pro
rata basis in any such liquidity event.
Board of Directors/[Obrver Rights]:Purchar will have the right to elect[__]members to the
Company's Broad of Directors,or alternatively,Purchar
will be allowed to nd[__]obrvers to all regular and
special meetings of the Board of Directors of the Company. Financial and Other Covenants:The Note and Warrant Purcha Agreement will contain
customary covenants(the terms of which will be defined in
the Note and Warrant Purcha Agreement)including,but
not limited to:
-Limitations on indebtedness,material changes,change of
control,liens,restricted payments and investments,ast
sales,capital expenditures,changes in nature of business,
mergers,acquisitions,dividends,etc.;
-Maintenance of existence;
-Maintenance of eligibility in SBIC program;
-Minimum Fixed Charge Coverage[and Interest Coverage]
Ratio[s];
-Minimum EBITDA;
-Leverage Ratio;
-Limitation of Capital Expenditures;and
-[Maintenance of Minimum Tangible Net Worth.] Documentation:Documentation will contain such terms,conditions,
reprentations,warranties,reporting requirements,
covenants,including financial covenants customary for
investments of this type,and subordination terms as
Purchar or its affiliates may require.
Reporting Requirements:Borrower will furnish the following reports,including,but
not limited to:
•Audited financial statements on a[annual][quarterly]basis
and unaudited financial statements on a[monthly basis]
•Any other reports that the Purchar may reasonably
request and as necessary for the Purchar to comply with the
regulations of the Small Business Investment Company Act
as required by law.
Conditions to Closing/[Funding]:Conditions to closing will include,without limitation,the
following:
national是什么意思∙ The terms,conditions and structure of the[acquisition]
toroidal(and all documents related thereto)shall be in form and
substance satisfactory to Purchar and its counl and
all transactions contemplated thereunder shall have
been consummated as t forth therein and no
conditions or material provisions contained therein
shall have been waived or amended unless agreed to by
Purchar;
∙ The negotiation,execution and delivery of definitive
documentation,including the Note and Warrant
Purcha Agreement,the Notes and the Warrants(in
form and substance satisfactory to Purchar and its
counl);
∙ Purchar shall have received independent legal,tax,
insurance,fairness and accounting opinions satisfactory
to Purchar and its counl;
∙ Receipt of(i)SBA Form480,Size Status Declaration,
(ii)SBA Form652,Assurance for Compliance for
Nondiscrimination by the Borrower and(iii)u of
proceeds certification
∙ The abnce of any material adver change or
disruption in the financial or capital markets;]
∙ The abnce of any change,which Purchar deems to
be materially adver,in respect of the business,results
of operation,condition(financial or otherwi),value,
prospects,liabilities or asts of the Company;
∙ The management incentive and employment
agreements of the Company shall be acceptable to
Purchar and its counl;
∙ [A minimum Adjusted EBITDA on a proforma,run-
rate basis[______]of at least$[____]million on a
basis satisfactory to Purchar;]
∙ Satisfactory liquidity in the amount of$[____];
∙ Satisfactory insurance;
∙ Satisfactory legal,accounting and financial due
diligence;左面
∙ Accuracy of reprentations and warrants under the
Note and Warrant Purcha Agreement;
∙ Approvals of all requisite parties to the Transaction
have been received by closing;人教版八年级下册英语
∙ No violation of any curities laws or other applicable
laws or regulations;
∙ No default in any material contracts and abnce of any
material litigations as of the date of closing and after
giving effect to the[acquisition];
扬州新东方∙ Purchar shall have received all fees and expensi lay my love on you
(including fees and expens of counl)on or before
the date of the closing of the[Transaction];
∙ Abnce of any defaults or event of default under the
effectiveness
Note and Warrant Purcha Agreement,the Notes or
any other related documents.chinabug
∙ Receipt by the Company of all third party connts and
governmental approvals;
explosion∙ Satisfaction that there are no material environmental
issues;
∙ No default in any material contracts and abnce of any
material litigation as of the date of closing and after
giving effect to the acquisition;
∙ The Equity Sponsors shall have made a cash equity
investment in the Company of at least$[_____]million
(which shall have been made on terms and conditions
acceptable to Purchar);and
∙ Senior financing in the amount of$[____]will be
available to be drawn at closing.
Governing Law:State of[______________].
Events of Default:Customary Events of Default will include but are not limited
to:(i)failure to pay interest or principal when due and
payable;(ii)failure to comply with the covenants in the
curities purcha agreement;(iii)defaults under other
agreements;(iv)breaches of reprentations and warranties;
(v)failure to discharge material judgments;and
(vi)bankruptcy or insolvency.
