Exhibit (10)(d)
Startech
Term Sheet
August 17, 1999
Page 1
PARADIGM GROUP, L.L.C.
TERM SHEET
STARTECH ENVIRONMENTAL CORPORATION (STHK)
8% CUMULATIVE, CONVERTIBLE, REDEEMABLE, SENIOR PREFERRED STOCK
WITH DETACHABLE WARRANTS
Issuer: Startech Environmental Corporation ("Startech").
Issue: Eight Percent (8%) Cumulative, Convertible,
Redeemable, Payable-in-Kind Senior Preferred Stock
("Preferred"), convertible into shares of the
Common Stock of Startech, with detachable warrants
("Warrants") exercisable into shares of Startech
Common Stock.
Offering Amount: Minimum of $5,000,000; at Startech's discretion up
to $12,500,000; on or before September 15, 1999
(the date of payment of which being hereinafter
referred to as the "Closing"); subject to due
diligence.
Use of Proceeds: The proceeds will be used for
general working capital purposes, none of which
will be used to repay existing indebtedness to any
insider, except as is necessary to redeem a
shareholder at a substantial discount to the then
current market price.
Shares of Common Stock
Into which the Preferred
Stock converts: Shares of Startech Common Stock, 50% of which,
upon the effectiveness of a registration statement
(as discussed below in Registration Section), will
be freely tradable, shall be issued to a holder
upon any such holder's exercise of the right of
conversion ("Conversion"). A holder may convert,
at holder's sole option, at any time from a period
commencing 120 days from the Closing (the "Initial
Issuance Date" or "Conversion Date") through the
two year anniversary of Closing. Unless otherwise
agreed to by Startech, in no event, however, can
any of the Common Stock be sold prior to 180 days
from the Closing, irrespective of registration.
The number of shares issuable to a holder upon any
such Conversion (an "Applicable Issuance") will
equal the amount paid by the holder, plus accrued
dividends, divided by the lesser of:
(a) $6.00 (the "Fixed Price"), or
(b) Eighty (80%) percent (the "Applicable
Percentage") of the average of the closing bid
prices for the Common Stock for the previous five
trading days prior to the Conversion Date (the
"Conversion Date Price").
The lesser have (a) and (b) is hereinafter
referred to as the "Conversion Price").
However, under no circumstances will the
Conversion Price be less than $4.00.
Warrant Coverage: Purchasers will be issued Warrants exercisable
into such number of shares of Common Stock as is
equal to thirty percent (30%) of the number of
shares to be issued to Paradigm Group, L.L.C. or
the holder as a result of this offering. Such
shares into which the Warrants are exercisable
will have piggyback registration rights.
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Startech
Term Sheet
August 17, 1999
Page 2
In addition, the placement agent selected by
Paradigm Group, L.L.C., or its designees, will
receive Warrants exercisable into such number of
shares of Common Stock as is equal to twenty
percent (20%) of the number of shares to be issued
to Paradigm Group, L.L.C. or the holder as a
result of this fund raising. Such shares into
which the Warrants are exercisable will have
piggyback registration rights.
Warrant Term: Unexercised Warrants will expire August 31, 2001;
provided, however, that if the average of the
closing bid prices for the Common Stock for the
previous thirty trading days prior thereto is not
at least $16.50 per share, then the Warrants will
not then expire; provided further, however, that
any time thereafter that the closing bid prices
for the Common Stock for ten consecutive trading
days exceeds $16.50 per share, Startech will have
the option, with notice furnished by Startech on
any such date, to cause, 30 days thereafter the
expiration of the Warrants. Otherwise, the
Warrants will expire August 31, 2004 (such
applicable date of the expiration of the Warrants
being the "Warrant Expiration Date").
Warrant Exercise Price: Warrants will be exercisable into Common Stock at
a price equal to $15.00 per share.
Startech's Optional
Redemption: On any date following 12 months from Closing,
provided that the registration statement is then
effective, so long as the closing bid price for
the Common Stock exceeds $13.00, and for the 20
trading days prior thereto the closing bid price
for the Common Stock exceeded $13.00, then
Startech will have the option, with notice
furnished by Startech on any such date, to redeem
the Preferred Stock for $12.00 per share, plus all
accumulated and unpaid dividends thereon. In such
event, the holder will then have 20 trading days
to convert.
Mandatory Conversion: On September 15, 2002, any unconverted Preferred
Stock must be redeemed at $10.00 per share, plus
all accumulated and unpaid dividends thereon, or
automatically converted at $5.00 per share of
Common Stock, or the then current market price per
share of the Common Stock.
No Short Selling: Neither the purchaser and each underlying
individual subscriber that is part of the Paradigm
Group shall not sell short any interest or shares
of Startech Environmental Stock.
Registration: Startech will use its best efforts to (i) within
thirty days following Closing, prepare and file a
registration statement on Form S-1, Form S-3 or
Form SB-2 to register at least a sufficient number
of shares of Common Stock to accommodate 50% of
the maximum number of shares to be issued in the
event of both a Conversion and a Warrant exercise,
and (ii) use its best efforts to have such a
registration statement declared effective within
180 days following Closing, and thereafter to
cause the registration statement to remain
effective through the Warrant Expiration Date.
Registration is to facilitate use as collateral
and not in anticipation of any sale.
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Startech
Term Sheet
August 17, 1999
Page 3
NASDAQ or AMEX Listing: Startech will use its best efforts to (i) within
60 days following the effectiveness of a
registration statement, prepare and file all forms
and statements necessary to apply for listing on
the NASDAQ (small cap or NMS) or on the American
Stock Exchange, and (ii) use its best efforts to
have the listing declared effective within 120
days from filing for listing.
Board Seat: Startech will appoint Sheldon Drobny to the Board
of Directors.
Placement Agent
Compensation: Conditioned upon the sale of Securities by the
placement agent selected by Paradigm Group,
L.L.C., such placement agent, or its designees, or
Sam Goetz / Westport Resources, Investment
Services, Inc. will receive at Closing, to be
divided between them in accordance with the
attached agreement (attached hereto as Exhibit A):
Cash compensation equal to ten percent (10%) of
the total amount raised pursuant to this offering,
plus an expense reimbursement of up to three
percent (3%) of the total amount raised pursuant
to this offering, of actual expenses incurred,
plus Warrants exercisable into such number of
shares of Preferred Stock and related or Warrants
attached thereto as is equal to ten percent (10%)
of the number of shares of Preferred Stock to be
issued as a result of this fund raising. Such
shares into which the Preferred Stock shares and
related Warrants are exercisable will have
piggyback registration rights.
/s/ Sheldon Drobny
------------------------------------
Sheldon Drobny, Managing Director,
Paradigm Group, L.L.C.
/s/ Joe Longo
------------------------------------
Joe Longo, President,
Startech Environmental Corporation
