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4. For this question, please see the Convertible Note Term Sheet attached as Exhibit A. Aggie Corp, a New Mexico corporation, has managed to build its business without taking on any significant investments. It has a steady flow of customers throughout the U.S. but knows it can jump from its modest 500 customers to 10,000 customers if it gets some additional capital to hire more employees. Aggie Corp has found two investors who will invest in the company to help with the growth, Mesilla Ventures LP and Organ Mountain Investments LP. The investors have agreed to invest via a convertible note. Aggie Corp will offer up to $500,000 in convertible notes with an interest rate of 8%. The notes will mature at the end of 36 months at which point, they will convert into equity at the option of the compally. If the notes convert to equity, the investors will receive a 20% discount on the purchase price. If the notes convert upon maturity, the conversion cap is $2,000,000. If the notes convert on the occurrence of a new capital raise (qualified financing) with which equity is granted, the conversion cap is $4,000,000. If the company sells or goes through a change of control, the conversion cap is $4,000,000. Each party will pay its own expenses in the note round. The round will be performed January 2021. SEE THE TERM SHEET FOR QUESTIONS 4(a-q). TERM SHEET $400,000 in Convertible Notes [40] This is a summary of certain principal terms of a proposed offering by Aggie Corp (the "Company'), of up to $400,000 in Convertible Promissory Notes (each a "Note" and collectively the "Notes" and the offering thereof being the "Convertible Note Offering"). This summary of terms is not intended to be a binding agreement or a commitment by any person to provide financing or by the Company to issue securities on these or any other terms. A binding agreement or commitment will not exist unless and until definitive agreements have been negotiated, approved, executed and delivered. Company: [4b), a [4c) corporation. Investors: [4d] Maximum Offering: del Interest Rate: 148 Maturity Date: Mg] Summary of Conversion Discount: 14 Terms: Next Round Conversion Cap: 140 Maturity Conversion Cap: Change of Control Conversion Cap: 14k) As of May 1, 2020, the Company has authorized 10,000,000 shares of common stock of the Company (the "Common Stock"), of which 6,000,000 shares are Capitalization: issued and outstandingl. 4,000,000 shares are reserved for future capital raises, including the conversion of the Notes, and for future issuance to service providers of the Company]. All principal and accrued interest on the Notes (the "Outstanding Balance") will be due and payable [41] months from the date the first Note in this Maturity Date: Convertible Note Offering is issued by the Company (the "Maturity Date"), unless earlier converted to equity securities of the Company on the terms set forth in the Notes Interest shall accrue on all outstanding principal amounts of the Notes at a rate of (4m% per annum based on a 365-day year. Interest shall not compound. Applicable Interest shall be due and payable on the Maturity Date unless the holder of a Interest: Note elects to convert the Outstanding Balance of its Note prior to the Maturity Date or the holders of a majority in interest of the Notes elect to convert the Outstanding Balance of the Notes prior to the Maturity Date. 4. For this question, please see the Convertible Note Term Sheet attached as Exhibit A. Aggie Corp, a New Mexico corporation, has managed to build its business without taking on any significant investments. It has a steady flow of customers throughout the U.S. but knows it can jump from its modest 500 customers to 10,000 customers if it gets some additional capital to hire more employees. Aggie Corp has found two investors who will invest in the company to help with the growth, Mesilla Ventures LP and Organ Mountain Investments LP. The investors have agreed to invest via a convertible note. Aggie Corp will offer up to $500,000 in convertible notes with an interest rate of 8%. The notes will mature at the end of 36 months at which point, they will convert into equity at the option of the compally. If the notes convert to equity, the investors will receive a 20% discount on the purchase price. If the notes convert upon maturity, the conversion cap is $2,000,000. If the notes convert on the occurrence of a new capital raise (qualified financing) with which equity is granted, the conversion cap is $4,000,000. If the company sells or goes through a change of control, the conversion cap is $4,000,000. Each party will pay its own expenses in the note round. The round will be performed January 2021. SEE THE TERM SHEET FOR QUESTIONS 4(a-q). TERM SHEET $400,000 in Convertible Notes [40] This is a summary of certain principal terms of a proposed offering by Aggie Corp (the "Company'), of up to $400,000 in Convertible Promissory Notes (each a "Note" and collectively the "Notes" and the offering thereof being the "Convertible Note Offering"). This summary of terms is not intended to be a binding agreement or a commitment by any person to provide financing or by the Company to issue securities on these or any other terms. A binding agreement or commitment will not exist unless and until definitive agreements have been negotiated, approved, executed and delivered. Company: [4b), a [4c) corporation. Investors: [4d] Maximum Offering: del Interest Rate: 148 Maturity Date: Mg] Summary of Conversion Discount: 14 Terms: Next Round Conversion Cap: 140 Maturity Conversion Cap: Change of Control Conversion Cap: 14k) As of May 1, 2020, the Company has authorized 10,000,000 shares of common stock of the Company (the "Common Stock"), of which 6,000,000 shares are Capitalization: issued and outstandingl. 4,000,000 shares are reserved for future capital raises, including the conversion of the Notes, and for future issuance to service providers of the Company]. All principal and accrued interest on the Notes (the "Outstanding Balance") will be due and payable [41] months from the date the first Note in this Maturity Date: Convertible Note Offering is issued by the Company (the "Maturity Date"), unless earlier converted to equity securities of the Company on the terms set forth in the Notes Interest shall accrue on all outstanding principal amounts of the Notes at a rate of (4m% per annum based on a 365-day year. Interest shall not compound. Applicable Interest shall be due and payable on the Maturity Date unless the holder of a Interest: Note elects to convert the Outstanding Balance of its Note prior to the Maturity Date or the holders of a majority in interest of the Notes elect to convert the Outstanding Balance of the Notes prior to the Maturity Date Step by Step Solution
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