EXPLANATION AND GUIDE

|Form: |Long Form Venture Capital Term Sheet |
|Purpose: |This is a long form annotated Venture Capital Term Sheet, proposing deal terms for investment by a venture |
| |capitalist in an early-stage company. It is for a Series A Convertible Preferred Stock round of company financing. |
| |The form is very pro-investor in its orientation. |
Long Form Term Sheet for Potential Venture Investment[1]

TERM SHEET FOR POTENTIAL INVESTMENT
IN
[NAME OF COMPANY][2]

Confidential This term sheet summarizes the principal terms with respect to a potential private placement of equity securities of __________ (the "Company") by a group of investors led by __________. This term sheet is intended solely as a basis for further discussion and is not intended to be and does not constitute a legally binding obligation except as provided under "Confidentiality," "Exclusivity" and "Expenses" below. No other legally binding obligations will be created, implied, or inferred until a document in final form entitled "Stock Purchase Agreement," is executed and delivered by all parties. Without limiting the generality of the foregoing, it is the parties intent that, until that event, no agreement shall exist among them and there shall be no obligations whatsoever based on such things as parol evidence, extended negotiations, "handshakes," oral understandings, or courses of conduct (including reliance and changes of position), except as provided under "Confidentiality," "Exclusivity" and "Expenses" below.[3]

The Company and the investors are discussing a private placement of shares of Preferred