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TERM SHEET

FOR SERIES A ROUND OF FINANCING OF KSPIRE COMPANY

  

Noteholders: 


  • Type of Security: Series A Preferred Note, Total of 35 individual notes to be entered into by Company and each Note represents a principal amount of ($6,000)
  • Use of Proceeds: The Company shall use the proceeds from this financing for working capital purposes.
  • Profit Share Fee: The Company will pay to its qualified Preferred Note holders a pro-rata percentage of a Company designated “Profit Sharing Fee” equal to Twenty percent (20%) of Company’s monthly profits, subject to the specific terms and conditions of each Noteholders Agreement. 
  • Payback Fee of Principle: Each Noteholders shall be paid quarterly, a pro-rata percentage of a Company designated “Payback Fee” equal to Thirty Percent (30%) of Company’s quarterly “Affiliate Agreement” revenue, subject to the specific terms and conditions of each Noteholders Agreement.
  • Voting Rights: On all matters submitted for Company approval, No voting rights shall be granted to any Note holders. 
  • Liquidation Preference: The holders of Series A Note holders shall have a preference upon liquidation overall holders of any Membership Interest in Company. 
  • Board of Directors: The Board of Directors of the Company shall be composed of five members. Of these five members, the holders of the Series A Preferred Note shall have the right to designate one director to serve on the Company’s Board for a period of one year.
  • Affirmative Covenants: While any Series A Preferred Note is outstanding, the company will:
  • 1. a) maintain adequate property and business insurance.
  • 2. b) comply with all laws, rules, and regulations.
  • 3. c) preserve, protect, and maintain its corporate existence; its rights, franchises, and privileges; and all properties necessary or useful to the proper conduct of its business.
  • 4. d) submit all reports required by the Internal Revenue Code and the regulations promulgated thereunder.
  • 5. e) cause all key employees to execute and deliver non-competition, non-solicitation, non- hire, nondisclosure, and assignment of inventions agreements for a term of their employment with the Company plus one year in a form reasonably acceptable to the Board of Directors.
  • Financial Statements and Reporting: The Company will provide all information and materials, including, without limitation, all internal management documents, reports of operations, reports of adverse developments, copies of any management letters, communications with members or directors, and press releases and registration statements, as well as access to all senior managers as requested by holders of Series A Preferred Noteholders. In addition, the Company will provide the holders of Series A Preferred Note with unaudited monthly and quarterly and audited yearly financial statements, as well as an annual budget. 
  • Other Provisions: The Notes shall include standard and customary representations and warranties of the Company, and the other agreements prepared to implement this financing shall contain other standard and customary provisions. Definitive agreements will be drafted by counsel to the Noteholders. This term sheet is intended by the parties to be non-binding.
  • Expenses: The Company and the holders of Series A Preferred Note will pay for their own legal fees and costs in connection with the transaction
  • Conditions to Closing: Closing shall be subject to standard and customary conditions, including the completion of due diligence regarding standard and customary matters satisfactory to the Noteholders and their legal counsel.   

Amount of Debt Financing: $210,000

Agreement Break Down

Note Principal Payments Based on Each Agreement All numbers are just an estimate.

Each Large Restaurant Agreement 

Gross $114 x 30% = $34.20

         

Each Small Restaurant Agreement 

Gross $85.5 x 30% = $25.65


Each Coffee House Agreement 

Gross $62.50 x 30% = $18.75

         

Each Business Agreement

Gross $85.5 x 30% = $25.65


Each Private School Agreement 

Gross $60.00 x 30% = $18.00


Each Non-Profit Agreement 

Gross $60.00 x 30% = $18.00



To investors all numbers are just an estimate.

50 Agreements

Average Agreement based on $150.00

Total $7,500


  • Programming          $1,500 
  • Lawyers                      $300
  • Sales Reps                 $1,475
  • Investors                    $1,280

100 Agreements

Average Agreement based on $150.00

Total $15,000


  • Programming         $3,000
  • Lawyers                      $600
  • Sales Rep                   $2,850
  • Investors                  $2,565 

200 Agreements

Average Agreement based on $150.00

Total $30,000


  • Programming          $6,000
  • Lawyers                      $1,200
  • Sales Rep                  $5,700
  • Investors                  $5,130

300 Agreements

Average Agreement based on $150.00

Total $45,000

  • Programming        $9,000
  • Lawyers                    $1,800
  • Sales Rep                 $8,550
  • Investors                  $7,695 

400 Agreements

Average Agreement based on $150.00

Total $60,000 


  • Programming       $12,000
  • Sales Rep                 $12,000
  • Investors                 $10,800 

500 Agreements

Average Agreement based on $150.00

Total $75,000

 

  • Programming      $15,000
  • Sales Rep                $15,000
  • Investors                 $13,500 

PAYBACKS on each $6,000 investments

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50 AGREEMENTS

  • Total $ 1,282.00 Towards Payments Monthly. All numbers are just an estimate.            


  • 1  Investor  $1,282.00     
  • 2  Investors $641.00 Each    
  • 3  Investors $427.00 Each     
  • 4  Investors $320.00 Each      
  • 5  Investors $256.00 Each   

100 AGREEMENTS

  • Total $2,565.00  Towards Payments Monthly. All numbers are just an estimate. 


  • 5  Investors $523.00 Each      
  • 6  Investors $427.00 Each    
  • 7  Investors $366.00 Each     
  • 8  Investors $320.00 Each      
  • 9  Investors $285.00 Each     
  • 10  Investors $256.00 Each   

200 AGREEMENTS

  • Total $5,130.00 Towards Payments Monthly. All numbers are just an estimate.  


  • 10  Investors $513.00 Each     
  • 11  Investors $466.00 Each     
  • 12  Investors $427.00 Each      
  • 13 Investors  $394.00 Each      
  • 14  Investors $366.00 Each    
  • 15  Investors $342.00 Each     

300 AGREEMENTS

  • Total $7,695.00  Towards Payments Monthly. All numbers are just an estimate.


  • 15  Investors $513.00 Each      
  • 16  Investors $480.00 Each      
  • 17  Investors $452.00 Each      
  • 18  Investors $427.00 Each     
  • 19  Investors $405.00 Each     
  • 20  Investors $384.00 Each   

400 AGREEMENTS

  • Total $10,800.00 Towards Payments Monthly. All numbers are just an estimate.   


  • 20  Investors $540.00 Each      
  • 21  Investors $514.00 Each      
  • 22  Investors $490.00 Each    
  • 23  Investors $469.00 Each      
  • 24  Investors $450.00 Each      
  • 25  Investors $432.00 Each     

500 AGREEMENTS

  • Total $13,500.00 Towards Payments Monthly. All numbers are just an estimate. 


  • 25  Investors $540.00 Each      
  • 26  Investors $519.00 Each     
  • 27  Investors $500.00 Each      
  • 28  Investors $482.00 Each     
  • 29  Investors $465.00 Each     
  • 30  Investors $450.00 Each      
  • 31  Investors $435.00 Each     
  • 32  Investors $421.00 Each      
  • 33  Investors $409.00 Each      
  • 34  Investors $397.00 Each      
  • 35  Investors $385.00 Each    

Profit share to investors breakdown

300 Agreements

Average Agreement based on $150.00

Total $45,000


  • Programming          $9,000
  • Lawyers                      $1,800
  • Sales Rep                   $8,550
  • Investors                    $7,695
  • Warehouse               $2,000 
  • Office Manager      $2,666
  • Warehouse Emp.   $2,666 
  • Sales Manager        $2,666 
  • Insurance                   $300 
  • Phone                           $250
  • Internet                      $150 
  • Alarm System         $75 

Total                             $7,182




  • Yearly Fee                $19,500
  • Programming         $3,900
  • Sales Rep.                 $7,500 




  • Monthly Balance     $7,182 
  • Fee Profit                 +$8,100
  • Profit                       =$15,282


  • 20% $15,282 =   $3,056.40


400 Agreements

Average Agreement based on $150.00

Total $60,000 


  • Programming        $12,000
  • Sales Reps               $12,000
  • Investors                  $10,800
  • Warehouse               $2,000 
  • Office Manager      $2,666 
  • Warehouse Emp.   $2,666 
  • Sales Manager        $2,666
  • Insurance                   $300 
  • Phone                           $250
  • Internet                       $150 
  • Alarm System          $75


Total                              $14,452




  • Yearly Fee                $19,500
  • Programming         $3,900
  •      Sales Rep.                 $7,500      


  • Monthly Balance   $14,452
  • Startup fee Profit + $8,100
  • Profit                       =$18,052


  • 20% of $22,552 = $4,510.40


All numbers above are just an estimate.

500 Agreements

Average Agreement based on $150.00

Total $75,000


  • Programming       $15,000
  • Sales Rep                 $15,000
  • Investors                  $13,500
  • Warehouse               $2,000 
  • Office Manager      $2,666 
  • Warehouse Emp.   $2,666 
  • Sales Manager        $2,666
  • Insurance                   $300 
  • Phone                           $250
  • Internet                       $150 
  • Alarm System          $75


Total                              $20,727




  • Yearly Fee                $19,500
  • Programming         $3,900
  •      Sales Rep.                 $7,500      


  • Monthly Balance   $20,727
  • Startup fee Profit + $8,100
  • Profit                       =$24,327


  • 20% of $28,827 = $5,765.40

Profit sharing payments

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300 AGREEMENTS

  • $3,056.40 20% OF MONTHLY PROFITS. All numbers are just an estimate.   


  • 15  Investors $203.76 Each      
  • 16  Investors $191.25 Each     
  • 17  Investors $179.78 Each      
  • 18  Investors $169.80 Each     
  • 19  Investors $160.86 Each      
  • 20  Investors $152.82 Each     

400 AGREEMENTS

  • $4,510.40  20% OF MONTHLY PROFITS. All numbers are just an estimate.   


  • 20  Investors $225.52 Each      
  • 21  Investors $214.78 Each     
  • 22  Investors $205.01 Each    
  • 23  Investors $196.10 Each      
  • 24  Investors $187.93 Each      
  • 25  Investors $180.41 Each     

500 ARGEEMENTS

  • $5,765.40  20% OF MONTHLY PROFITS. All numbers are just an estimate.   


  • 25  Investors $230.61 Each     
  • 26  Investors $221.74 Each      
  • 27  Investors $213.53 Each      
  • 28  Investors $205.90 Each      
  • 29  Investors $198.80 Each      
  • 30  Investors $192.18  Each    
  • 31  Investors $185.98  Each    
  • 32  Investors $180.16  Each    
  • 33  Investors $174.70 Each      
  • 34  Investors $169.57 Each      
  • 35  Investors $164.72 Each