Sample Internal Strategic VC Agenda #2 Participants: Highland Capital Partners Stealth Networks, Inc. Issues to be Discussed: Introductory Remarks (5 min) – by CEO I. - Control Issues (15 min) – by Distribution of Seats on the Board (deal breaker) As written (p.3): With a 3-2 split of seats on the board, the VC . . .. What we want: We want . . . Ideally, we will have . . . What is acceptable: . . . is acceptable. We are open to suggestions from the VC of whom they would like to have on the board, but . . .. Their Rationale: The VCs want to . . .. They feel . . .. Additionally, they . . . Our Rationale: We understand that they . . ., however, we feel that . . . Additionally, our conversations with our lawyers and knowledge of other term sheets has informed us that . . . Naming of Board seats in the term sheet (significant concern) As written (p.3): What we want: What is acceptable: Their Rationale: Our Rationale: II. - Antidilution Provisions (15 min) – Full-ratchet Vs Weighted Ave (deal breaker) As written (p. 2): What we want: What is acceptable: Their Rationale: Our Rationale: III. - Return on Investment (10 min) – by Additional/Secondary Issues (to be discussed at a later time) XXX (not deal breaker, but of some concern) XXX (not deal killer) Other secondary: - Conversion – Clause of XX - Voting Rights – Number of points we see unnecessary (XXX). Especially XXX - Option Pools -(size & split) – dilution issue, what is VC going to do with it. How will we guarantee attractiveness to existing and new employees - Employee contracts – XXX - Affirmative Covenants – define more clearly the broad term and agree on them - Expenses – Include a XXX. - Creation of Committees – we would like XXX