Long Form Venture Capital Term Sheet

Amount of Investment:

$             

Valuation of the Company:

$              Pre-Money on a fully diluted basis

$              Post-Money on a fully diluted basis

Type of Security:

Shares of the Company's Series __ Preferred Stock ("Preferred"), convertible into shares of the Company's Common Stock ("Common").

Price Per Share:

$              ("Original Purchase Price").

Capitalization of the Company:

The current capitalization of the Company is set forth in Exhibit 1, and the capitalization of the Company after this proposed financing is set forth in Exhibit 2.

Rights,Preferences Privileges and Restrictions of Preferred Stock:

(1) Dividend Provisions:[Starting on January 1, 20__,] [T]he holders of the Preferred will be entitled to receive dividends [at the rate of __% of the Original Purchase Price] whenever funds are legally available and when and as declared by the Board.  No dividend shall be paid on the Common at a rate greater than the rate at which dividends are paid on Preferred (based on the number of shares of Common into which the Preferred is convertible on the date the dividend is declared).  Dividends on Preferred will be in preference to dividends paid on the Common.  Dividends on the Preferred will be noncumulative.

(2) Liquidation Preference:  In the event of any liquidation, dissolution or winding up of the Company, the holders of Preferred will be entitled to receive in preference to the holders of Common an amount ("Liquidation Preference") equal to the Original Purchase Price plus any dividends declared on the Preferred but not paid [and then to share with the holders of the Common in the remaining assets on an as-if-converted basis].  At the option of the holders of Preferred, the effectuation by the Company or third party acquirors of a transaction or series of transactions in which more than [50%] [80%] of the voting power of the Company is disposed of to a single person or group of affiliated persons or the consolidation or merger of the Company with or into any other corporation or corporations or the sale of all or substantially all of its assets shall be deemed to be a liquidation, dissolution or winding up for purposes of the liquidation preference.