Feed Case Study Essay

1517 Words Jun 27th, 2012 7 Pages
Exhibit 1
Term Sheet

FEED RESOURCE RECOVERY
SERIES A PREFERRED STOCK FINANCING
SUMMARY OF TERMS

I. INTRODUCTION

FEED Resource Recovery (the “Company”) is a company incorporated in the state of Massachusetts and currently has 20,000 ordinary shares issued which are held by the Founders Shane Etan, who holds 16,000 shares, and Ryan Begin who holds the remaining 4,000 shares. The Company desires to authorize the issue of 206,612 shares of Series A Preferred Stock to the investors, Group One Investment Company (the “Investors”), on the terms and conditions as set forth below:

II. TERMS OF FINANCING

Amount of Financing…………..………. US$250,000

Securities……………………….………. 206,612 Convertible Cumulative Preference shares
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426,612) IB = Amount invested by Series B investor NB = Number of shares issued in Series B round
Pre-emptive Rights for Future Funding

The Investors will be granted a first right to participate in future capital raisings. The Company must not agree to grant any shares to other investors without first offering the investment opportunity to the Investors. If the Investors do not agree to participate in the future capital raising investment within twenty (20) business days from receiving written notice from the Company advising of the capital raising, then the Company may raise capital from other parties on terms no more favourable than those offered to the Investors.

Co-Sale (“Tag Along”)

If any shareholder wishes to sell any or all of its shares in the Company, other than to another existing shareholder, then the selling shareholder must procure the proposed buyer to make an offer for a pro-rated number of shares to all other shareholders of the Company.

Board of Directors

The Board shall consist of three members comprised of two seats nominated by the Founders and one seat nominated by the Investors.

Information Rights

So long as the Investors hold shares, the Company shall provide to the Investors audited annual financial statements within sixty (60) days after the end of each fiscal year and unaudited quarterly financial statements within thirty (30) days of the end of each fiscal quarter. The

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