Presents Presents DART of DART of Mock Term SheetMock Term Sheet Case Case

Major Red Flags1.Conditions to receive second tranche of financing:

Term:• Developing a product capable of entering human clinical trials in US within 6 months from date of in-license• Achieving conditions precedent to the disbursement of the second tranche of financing within 9 months.

Reasons:• Life-science/biotech industry requires a long time for R&D and licensing of a product• InfiniteWisdom is still an early stage start-up, which means it requires more time for R&D

2. Dividends: Term:

• Requiring cumulative dividends at the rate of 8%Reasons:• Cumulative dividends would adversely affect company’s cash flow and put it at a competitive disadvantage

Major Red Flags3. Antidilution Provisions Term:

• The conversion price is adjusted to half of the then-current conversion price if Company does not recognize revenue of at least $2 million by December 2007

• The conversion price of the preferred stock will be subject to a full ratchet adjustment

Reasons:• Generating $2 million is very difficult for an early stage biotech company • Potential to change company share structure tremendously.

4. Rights of First Refusal Term:

• Investors holding 200,000 shares of Registrable Securities having the right if Company proposes to offer equity securities to any person to

purchase their pro rata portion of such shares.

Reasons:• Legally, so long as the investor holds at least 5% of the Company’s outstanding Capital, such rights are given to those Major Investors.

Negotiation

Terms before change

(in order of prioritization)

Terms after change

Time limitation for second tranche of financing: 6 months and 9 months

6/9 months needs to be modified depending from a realistic point of view

Cumulative dividends at 8% Non-cumulative dividends

Antidilution Provisions conversion price 0.5

Antidilution Provisions conversion price determined by weighted-average adjustment.

Rights of First Refusal 200,000 shares

Rights of First Refusal 825,000 shares

Legal Fees and Expenses: company having to pay for special counsel/due diligence fees etc

Company will only share a reasonable amount of legal fees and expenses after the deal is done

Factors for change terms Factor that will affect whether or not negotiations can be done:• Company valuation:

The higher the company valuation is, greater is the chance to get the changes done

• Financing Environment

NVCA report• Negotiation skills, knowledge of the lawyer:

Good negotiation skills, and knowledge of the lawyer plays an important role in making the points clear and achieving the goal of the company.

• Principle scientist DesCartes

Conflict of Interest

• Liquidation Preference

The holders of the Series A Preferred shall be entitled to receive in preference to the holders of the Common Stock a per share amount equal to two (2) times the Original Purchase Price, plus any accrued but unpaid dividends ( the Liquidation preference).

• Employee Option Pool

Upon the Closing of this financing there will be 6,500,000 shares of issued and outstanding Common Stock held by the founders and an additional 13,500,000 shares of Common Stock.