Attached files
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| 8-K - CURRENT REPORT ON FORM 8-K - Nano Magic Holdings Inc. | appliednano_8k-021910.htm |
Exhibit 99.1
February
_, 2010
Form of Term Sheet for Debt
Investment
into Applied Nanotech
Holdings, Inc.
This
agreement is between Applied Nanotech Holdings, Inc. (“Issuer”) and __________
(“Investor”). The Issuer intends to raise a maximum of $2.5 million
in new capital in the form of a convertible debenture (the
“Debentures”).
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Convertible
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Debentures:
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The
due date of the Debentures will be 30 months from the date of
issuance.
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The
Debentures shall bear interest at the rate of 8%
per annum, which amount ( the “Accrued Interest”) shall be added to the
principal balance (the “Principal”) thereof and be subject to conversion
in accordance with the terms hereof. No cash shall be payable
in respect of interest, other than where the unconverted Debentures are
redeemed.
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Redemption:
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If
not converted earlier, the notes shall be redeemed in cash on the due
date. In addition, if not converted earlier, the notes may be redeemed in
cash at any time after May 1, 2010 at the option of issuer upon 30 days
written notice to the investor. Upon receipt of such written notice,
Investor has 15 days to elect to receive up to 50% of the amount due in
shares of the issuer’s common stock at the conversion
price.
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Conversion
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Feature:
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The
Debentures shall be convertible at the “Conversion Price” (1) at any time
at the option of the holder after Issuer has increased its authorized
shares of common stock, or (2) at the option of the issuer, 50% of the
Principal and Accrued Interest on December 15, 2010, if the
average closing price of the Issuer’s common stock for the period from
September 1, 2010 through November 30, 2010 is greater than three times
the conversion price, or (3) at the option of issuer, all Principal
and Accrued Interest on December 15, 2011, if the average
closing price of the Issuer’s common stock for the period from September
1, 2011 through November 30, 2011 is greater than three times the
conversion price.
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Conversion
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Price:
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The
Conversion Price is $0.20 per share.
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Conversion
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Ratio:
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The
number of shares of APNT common stock to be received upon conversion will
be determined by dividing the Principal plus Accrued Interest (the
“Conversion Amount”) by the Conversion Price.
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Registration:
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The
Company intends to, but is not obligated to, file a registration statement
with the SEC to facilitate the sale of shares received as a result of
conversion of the Debenture. In the absence of a registration statement,
shares may be sold pursuant to Rule 144 at any time after the debenture
has been outstanding for a period of 6 months, regardless of the time
period that the shares themselves have been held after
conversion.
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Authorized
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Shares:
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Promptly
upon issuance of the convertible debentures, the issuer will schedule a
shareholder’s meeting, if necessary, to increase the authorized shares of
common stock to insure that adequate shares are available if the
debentures are converted in full. The investor agrees to vote any common
shares that are under investors control in favor of the increase in
authorized shares.
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Conditions:
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Mutual
agreement on definitive documentation. The documentation will
include mutually acceptable provisions and/or appropriate covenants
concerning repayment of the Debentures.
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Closing:
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Commitment
by February _, 2010 and Funding by February __,
2010.
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INVESTOR
AGREES TO KEEP THIS TERM SHEET CONFIDENTIAL AND NOT TO DISTRIBUTE IT TO, OR
DISCUSS IT WITH, ANY THIRD PARTY (OTHER THAN INVESTOR’S LEGAL AND FINANCIAL
ADVISORS, WHO SHALL BE INFORMED OF THE CONFIDENTIAL NATURE OF THIS DOCUMENT)
WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF APNT.
The
parties hereby acknowledge their mutual agreement to the above terms and their
intention to negotiate in good faith the contemplated transaction in an
expedited manner. This term sheet will be considered void if it is
not executed by both parties prior to the close of business on February __,
2010. The undersigned officer, on behalf of Issuer, hereby
represents and warrants that this term sheet has been duly authorized, executed
and delivered by Issuer.
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Applied
Nanotech Holdings, Inc.
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By:_____________________
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Name:
Douglas P. Baker
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Title: Chief
Executive Officer
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Date:
February __, 2010
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Amount of
Commitment _________________
INVESTOR
NAME
By:
_________________________
Name:
Title:
Date:
February __, 2010