SUMMARY OF PROPOSED TERMS

SUMMARY OF PROPOSED TERMS
Ashton Hudson
November 1999

Offering:

Issuer: AnyCompany.com (the "Company")

Security: Series A Convertible Preferred Stock (the "Preferred Stock")

Amount: $2,000,000. $1,000,000 shall be invested at the initial closing, and an additional $1,000,000 shall be invested within 30 days of the initial closing.

Price: $1.00 per share of Preferred Stock (implying a pre-money, fully-diluted valuation of $5,000,000)

Capitalization: The Company’s capitalization prior to the sale of the Preferred Stock and following the sale of the Preferred Stock is set forth on attached Exhibit A.

Rights, Preferences and Privileges of the Preferred Stock

Dividend Preference: The holders of the Preferred Stock will be entitled to receive dividends prior and in preference to any dividend on Common Stock at the rate of 8% per annum payable quarterly in arrears from the date of the closing of this financing,", if, as and when declared by the Board of Directors.

Liquidation Preference: In the event of any liquidation, dissolution or winding up of the Company, the holders of the Preferred Stock will be entitled to receive, prior and in preference to the holders of common stock, an amount equal to the price at which the Preferred Stock was purchased from the Company plus any declared but unpaid dividends. All remaining assets available for distribution shall be distributed ratably to the holders of the Common. This Liquidation Preference is non-participating. A merger or sale of substantially all of the assets of the Company shall be treated as a liquidation, dissolution or winding up for purposes of the liquidation preference.

Optional Conversion: Each holder of the Preferred Stock will have the right to convert the Preferred Stock, at the option of such holder, at any time without the payment of any additional consideration by such holder, into shares of common stock at a conversion rate of one share of common stock for each share of Preferred Stock (1:1), subject to adjustment as described in "Antidilution Provisions."

Mandatory Conversion: The Preferred Stock will be automatically converted into common stock upon (i) the consent of a majority of the then-outstanding shares of Preferred Stock or (ii) the closing of an underwritten public offering of shares of the Company’s stock.

Antidilution Provisions: The conversion price of the Preferred Stock will be subject to appropriate proportional adjustment in the event of a stock split, stock dividend, combination or recapitalization. In addition, the conversion rate of the Preferred Stock shall be adjusted on a broad-based weighted average basis (including all outstanding Common Stock, unexercised options and warrants for Common Stock, and Preferred Stock that is convertible into Common Stock) in the event the Company issues additional shares at a purchase price below the conversion price then in effect. Issuances of shares of stock, or options or warrants therefor, to employees, consultants, officers or directors pursuant to approval of the Board of Directors shall not be deemed dilutive issuances, provided that such issuances do not exceed 22.5% of the fully diluted shares of the Company.

Voting Rights: Each holder of the Preferred Stock will have that number of votes equal to the number of shares of common stock issuable upon conversion of the Preferred Stock held by such holder.

Protective Provisions: So long as there are at least 500,000 shares of Preferred Stock outstanding, the Company will not, without obtaining the consent of the holders of at least a majority of the Preferred Stock, (i) authorize, create (by reclassification or otherwise), issue or incur any obligation to issue any securities (including debt securities) of the Company in excess of $50,000 in the aggregate having rights, preferences or privileges on parity with or senior to the Preferred Stock, (ii) increase the total number of authorized shares of preferred stock, (iii) amend or repeal any provision of or add any provision to the Articles of Incorporation or the Bylaws of the Company if such action would adversely affect the rights, privileges, preferences or restrictions of the Preferred Stock, (iv) set the exact number of directors of the Company at a number greater than 5, (v) effect a consolidation or merger of the Company or a sale of all or substantially all of its assets (other than solely for the purpose of changing the jurisdiction of Company) unless the holders of the Preferred Stock shall receive gross proceeds per share of Preferred Stock held by them of not less than $6.00 cash (as adjusted for subdivision, combinations, stock dividends, recapitalizations and the like), or (vi) undertake any transactions with affiliates of the Company which are adverse to the rights of the investors.

Right of Participation: If the Company proposes to offer any equity securities or rights to acquire equity securities (other than, shares issued or issuable upon stock splits, stock dividends, combinations and recapitalizations) prior to its initial public offering, the Company will offer to the holders of the Preferred Stock the opportunity to purchase their pro-rata percentage (based on their percentage ownership of the Company on an as-converted basis) of the newly issued equity securities or rights to acquire equity securities, except issuances of (i) up to 22.5% of the Company’s fully diluted shares of stock, or options or warrants therefor, to employees, consultants or directors, (ii) issuances of stock, options or warrants to equipment lessors, banks or similar institutional credit financing sources pursuant to plans or arrangements approved by the Board, (iii) issuances of stock, options or warrants in connection with the acquisition of other companies.

Co-Sale Rights (and the Company’s Right of First Refusal): The holders of the Preferred Stock will have a to participate pro rata in any sale by any shareholder owning greater than 5% of the Company’s common stock on a fully diluted basis (subject to customary exceptions such as transfers to estate planning vehicles), in the event the Company does not exercise its right of First Refusal to purchase such shares.

Information Rights: So long as the holders of the Preferred Stock continue to hold not less than 25 percent of the total number of shares of Preferred Stock (or common stock issued upon conversion of Preferred Stock) purchased by such holders in this offering, the Company will deliver to such holders (i) monthly and quarterly unaudited financial statements, (ii) annual audited financial statements, (iii) copies of any "management letter" received by the Company from its accountants, (iv) an annual operating budget and (ii) such other information as the holders may reasonably request from time to time. The Company’s obligations under this paragraph will terminate upon the initial public offering of its stock.

Registration Rights: Commencing on the earlier to occur of (i) the third anniversary of the closing of this offering or (ii) the first anniversary of the Company’s initial public offering of its stock, the Company will use its best efforts to cause shares of conversion stock to be registered upon demand. The Company shall not be obligated to effect more than two registrations under these demand right provisions. The holders of the Preferred Stock shall have unlimited piggyback rights, subject to standard underwriters’ cutback provisions. Without the consent of a majority of the Preferred Stock, no stockholder of the company shall be granted registration rights superior to those of the holders. One demand for registration may be exercised by holders of at least 23% of the Preferred Stock or Common Stock issuable upon conversion of the Preferred Stock and the remaining demand for registration must be requested by holders of at least a majority of the Preferred Stock or Common Stock issuable upon conversion of the Preferred Stock, and have aggregate proceeds of at least $5,000,000. The Company and its underwriters shall have the right to terminate or withdraw any registration initiated by the Company and, in the case of the Company's initial public offering, to reduce or eliminate the number of shares proposed to be registered on behalf of the holders in view of market conditions. For registrations following the initial public offering, the holders of registration rights may not be cut back to less than 10% of the offering. The Preferred Stock shall have unlimited S-3 registrations (or an equivalent successor form) with aggregate proceeds of at least $1,000,000 each. The Company will not be obligated to effect more than one S-3 registration in any twelve-month period. The Company will bear registration expenses (including reasonable fees and expenses for one special counsel to the selling stockholders, but exclusive of underwriting discounts and commissions and stock transfer taxes) in connection with two demands, all piggyback and all S-3 registrations. The demand registration rights terminate (i) four (4) years following the Company's initial public offering of its stock, or (ii) earlier as to a particular holder if such holder can sell all of its shares in a 90 day period pursuant to Rule 144.

Market Standoff: 180 days following the Company's initial public offering of its stock, at the request of the underwriters, so long as each officer, director and 5% or more stockholder of the Company is similarly locked up.

Grant of Future Registration Rights: Future registration rights which are pari passu with or superior to the rights of the Preferred Stock require the consent of the Company and a majority of the Preferred Stock.

Board Representation: The authorized size of the Board will be initially set at five (5). One (1) director shall be elected by the Preferred Stock voting as a separate class, three (3) directors shall be elected by the holders of Common Stock voting as a separate class ("Common Directors"), and one (1) director shall be elected by the Common Stock and Preferred Stock voting together.

Proprietary Information and Inventions Agreement: Each key employee of the Company shall have entered into a proprietary information and inventions agreement in a form reasonably acceptable to the Company and the investors.

Stock Purchase Agreement: The investment will be made pursuant to a Stock Purchase Agreement acceptable to the Company and the investors, which agreement will contain, among other things, appropriate representations and warranties of the Company, covenants of the Company reflecting the provisions set forth herein, and appropriate conditions to the Closing, including qualification of the shares under applicable blue sky laws, the filing of restated Articles of Incorporation, and delivery of opinions of counsel.

Shareholders Agreement: The Company and the investors will enter into a Shareholders Agreement which agreement will contain, among other things, appropriate provisions covering the matters discussed in "Registration Rights", "Right of Participation", "Co-Sale Rights and The Company’s Rights of Refusal", "Information Rights" and "Board Representation."

Expenses: Provided that the closing of the Preferred Stock financing is effected, the Company will bear all reasonable legal and other expenses incurred by the investors with respect to the transaction.

Conditions to Closing: The closing shall be subject to and conditioned upon due diligence, the absence of any material adverse change to the Company or its prospects, negotiation of satisfactory legal documentation, and other customary provisions.

Subsequent Financing: Venture Fund shall have the right to provide or participate in all subsequent rounds of financing.

Warrant: Venture Fund shall be issued a warrant to purchase 1,000,000 shares of Preferred Stock at $1.00 per share (the "Warrant") in consideration for consulting services to be provided to the Company pursuant to a Consulting Agreement. The Warrant shall have a term of nine (9) months from the initial closing date; provided, however, the Warrant shall immediately terminate in the event Venture Fund (or a third party referred exclusively by Venture Fund) fails to invest an additional $1,000,000 in the Preferred Stock of the Company within 30 days of the initial closing date.

Non-Binding: Other than the "Expenses" provision above, this term sheet shall be non-binding on either party, but shall serve as a basis for negotiating a definitive agreement.

Acknowledged and agreed to this 28^th day of September, 1999:

VENTURE FUND, LTD. ANYCOMPANY.COM

By: ______________________ By: _____________________
Title: _________________ Title: __________________

EXHIBIT A

PRO FORMA CAPITALIZATION OF THE COMPANY

Capitalization: The Company’s capitalization prior to the sale of the Series A and following the sale of the Series A is set forth below:

Pre-Financing Post-Financing

Number of Number of

Shares % Shares %

Common Stock 4,004,000 80.00 4,004,000 42.70

Incentive Stock Plan 1,000,000 20.00 1,000,000 10.66

Series A Preferred 0 4,200,000 44.80

Warrants 173,080 1.84

Totals: 5,004,000 100% 7,677,000 100.00

Offering:
Issuer:	AnyCompany.com (the "Company")
Security:	Series A Convertible Preferred Stock (the "Preferred Stock")
Amount:	$2,000,000. $1,000,000 shall be invested at the initial closing, and an additional $1,000,000 shall be invested within 30 days of the initial closing.
Price:	$1.00 per share of Preferred Stock (implying a pre-money, fully-diluted valuation of $5,000,000)
Capitalization:	The Company’s capitalization prior to the sale of the Preferred Stock and following the sale of the Preferred Stock is set forth on attached Exhibit A.

Rights, Preferences and Privileges of the Preferred Stock
Dividend Preference:	The holders of the Preferred Stock will be entitled to receive dividends prior and in preference to any dividend on Common Stock at the rate of 8% per annum payable quarterly in arrears from the date of the closing of this financing,", if, as and when declared by the Board of Directors.
Liquidation Preference:	In the event of any liquidation, dissolution or winding up of the Company, the holders of the Preferred Stock will be entitled to receive, prior and in preference to the holders of common stock, an amount equal to the price at which the Preferred Stock was purchased from the Company plus any declared but unpaid dividends. All remaining assets available for distribution shall be distributed ratably to the holders of the Common. This Liquidation Preference is non-participating. A merger or sale of substantially all of the assets of the Company shall be treated as a liquidation, dissolution or winding up for purposes of the liquidation preference.
Optional Conversion:	Each holder of the Preferred Stock will have the right to convert the Preferred Stock, at the option of such holder, at any time without the payment of any additional consideration by such holder, into shares of common stock at a conversion rate of one share of common stock for each share of Preferred Stock (1:1), subject to adjustment as described in "Antidilution Provisions."
Mandatory Conversion:	The Preferred Stock will be automatically converted into common stock upon (i) the consent of a majority of the then-outstanding shares of Preferred Stock or (ii) the closing of an underwritten public offering of shares of the Company’s stock.
Antidilution Provisions:	The conversion price of the Preferred Stock will be subject to appropriate proportional adjustment in the event of a stock split, stock dividend, combination or recapitalization. In addition, the conversion rate of the Preferred Stock shall be adjusted on a broad-based weighted average basis (including all outstanding Common Stock, unexercised options and warrants for Common Stock, and Preferred Stock that is convertible into Common Stock) in the event the Company issues additional shares at a purchase price below the conversion price then in effect. Issuances of shares of stock, or options or warrants therefor, to employees, consultants, officers or directors pursuant to approval of the Board of Directors shall not be deemed dilutive issuances, provided that such issuances do not exceed 22.5% of the fully diluted shares of the Company.
Voting Rights:	Each holder of the Preferred Stock will have that number of votes equal to the number of shares of common stock issuable upon conversion of the Preferred Stock held by such holder.
Protective Provisions:	So long as there are at least 500,000 shares of Preferred Stock outstanding, the Company will not, without obtaining the consent of the holders of at least a majority of the Preferred Stock, (i) authorize, create (by reclassification or otherwise), issue or incur any obligation to issue any securities (including debt securities) of the Company in excess of $50,000 in the aggregate having rights, preferences or privileges on parity with or senior to the Preferred Stock, (ii) increase the total number of authorized shares of preferred stock, (iii) amend or repeal any provision of or add any provision to the Articles of Incorporation or the Bylaws of the Company if such action would adversely affect the rights, privileges, preferences or restrictions of the Preferred Stock, (iv) set the exact number of directors of the Company at a number greater than 5, (v) effect a consolidation or merger of the Company or a sale of all or substantially all of its assets (other than solely for the purpose of changing the jurisdiction of Company) unless the holders of the Preferred Stock shall receive gross proceeds per share of Preferred Stock held by them of not less than $6.00 cash (as adjusted for subdivision, combinations, stock dividends, recapitalizations and the like), or (vi) undertake any transactions with affiliates of the Company which are adverse to the rights of the investors.
Right of Participation:	If the Company proposes to offer any equity securities or rights to acquire equity securities (other than, shares issued or issuable upon stock splits, stock dividends, combinations and recapitalizations) prior to its initial public offering, the Company will offer to the holders of the Preferred Stock the opportunity to purchase their pro-rata percentage (based on their percentage ownership of the Company on an as-converted basis) of the newly issued equity securities or rights to acquire equity securities, except issuances of (i) up to 22.5% of the Company’s fully diluted shares of stock, or options or warrants therefor, to employees, consultants or directors, (ii) issuances of stock, options or warrants to equipment lessors, banks or similar institutional credit financing sources pursuant to plans or arrangements approved by the Board, (iii) issuances of stock, options or warrants in connection with the acquisition of other companies.
Co-Sale Rights (and the Company’s Right of First Refusal):	The holders of the Preferred Stock will have a to participate pro rata in any sale by any shareholder owning greater than 5% of the Company’s common stock on a fully diluted basis (subject to customary exceptions such as transfers to estate planning vehicles), in the event the Company does not exercise its right of First Refusal to purchase such shares.
Information Rights:	So long as the holders of the Preferred Stock continue to hold not less than 25 percent of the total number of shares of Preferred Stock (or common stock issued upon conversion of Preferred Stock) purchased by such holders in this offering, the Company will deliver to such holders (i) monthly and quarterly unaudited financial statements, (ii) annual audited financial statements, (iii) copies of any "management letter" received by the Company from its accountants, (iv) an annual operating budget and (ii) such other information as the holders may reasonably request from time to time. The Company’s obligations under this paragraph will terminate upon the initial public offering of its stock.
Registration Rights:	Commencing on the earlier to occur of (i) the third anniversary of the closing of this offering or (ii) the first anniversary of the Company’s initial public offering of its stock, the Company will use its best efforts to cause shares of conversion stock to be registered upon demand. The Company shall not be obligated to effect more than two registrations under these demand right provisions. The holders of the Preferred Stock shall have unlimited piggyback rights, subject to standard underwriters’ cutback provisions. Without the consent of a majority of the Preferred Stock, no stockholder of the company shall be granted registration rights superior to those of the holders. One demand for registration may be exercised by holders of at least 23% of the Preferred Stock or Common Stock issuable upon conversion of the Preferred Stock and the remaining demand for registration must be requested by holders of at least a majority of the Preferred Stock or Common Stock issuable upon conversion of the Preferred Stock, and have aggregate proceeds of at least $5,000,000. The Company and its underwriters shall have the right to terminate or withdraw any registration initiated by the Company and, in the case of the Company's initial public offering, to reduce or eliminate the number of shares proposed to be registered on behalf of the holders in view of market conditions. For registrations following the initial public offering, the holders of registration rights may not be cut back to less than 10% of the offering. The Preferred Stock shall have unlimited S-3 registrations (or an equivalent successor form) with aggregate proceeds of at least $1,000,000 each. The Company will not be obligated to effect more than one S-3 registration in any twelve-month period. The Company will bear registration expenses (including reasonable fees and expenses for one special counsel to the selling stockholders, but exclusive of underwriting discounts and commissions and stock transfer taxes) in connection with two demands, all piggyback and all S-3 registrations. The demand registration rights terminate (i) four (4) years following the Company's initial public offering of its stock, or (ii) earlier as to a particular holder if such holder can sell all of its shares in a 90 day period pursuant to Rule 144.
Market Standoff:	180 days following the Company's initial public offering of its stock, at the request of the underwriters, so long as each officer, director and 5% or more stockholder of the Company is similarly locked up.
Grant of Future Registration Rights:	Future registration rights which are pari passu with or superior to the rights of the Preferred Stock require the consent of the Company and a majority of the Preferred Stock.
Board Representation:	The authorized size of the Board will be initially set at five (5). One (1) director shall be elected by the Preferred Stock voting as a separate class, three (3) directors shall be elected by the holders of Common Stock voting as a separate class ("Common Directors"), and one (1) director shall be elected by the Common Stock and Preferred Stock voting together.
Proprietary Information and Inventions Agreement:	Each key employee of the Company shall have entered into a proprietary information and inventions agreement in a form reasonably acceptable to the Company and the investors.
Stock Purchase Agreement:	The investment will be made pursuant to a Stock Purchase Agreement acceptable to the Company and the investors, which agreement will contain, among other things, appropriate representations and warranties of the Company, covenants of the Company reflecting the provisions set forth herein, and appropriate conditions to the Closing, including qualification of the shares under applicable blue sky laws, the filing of restated Articles of Incorporation, and delivery of opinions of counsel.
Shareholders Agreement:	The Company and the investors will enter into a Shareholders Agreement which agreement will contain, among other things, appropriate provisions covering the matters discussed in "Registration Rights", "Right of Participation", "Co-Sale Rights and The Company’s Rights of Refusal", "Information Rights" and "Board Representation."
Expenses:	Provided that the closing of the Preferred Stock financing is effected, the Company will bear all reasonable legal and other expenses incurred by the investors with respect to the transaction.
Conditions to Closing:	The closing shall be subject to and conditioned upon due diligence, the absence of any material adverse change to the Company or its prospects, negotiation of satisfactory legal documentation, and other customary provisions.
Subsequent Financing:	Venture Fund shall have the right to provide or participate in all subsequent rounds of financing.
Warrant:	Venture Fund shall be issued a warrant to purchase 1,000,000 shares of Preferred Stock at $1.00 per share (the "Warrant") in consideration for consulting services to be provided to the Company pursuant to a Consulting Agreement. The Warrant shall have a term of nine (9) months from the initial closing date; provided, however, the Warrant shall immediately terminate in the event Venture Fund (or a third party referred exclusively by Venture Fund) fails to invest an additional $1,000,000 in the Preferred Stock of the Company within 30 days of the initial closing date.
Non-Binding:	Other than the "Expenses" provision above, this term sheet shall be non-binding on either party, but shall serve as a basis for negotiating a definitive agreement.

	Pre-Financing		Post-Financing
	Number of		Number of
	Shares	%	Shares	%
Common Stock	4,004,000	80.00	4,004,000	42.70
Incentive Stock Plan	1,000,000	20.00	1,000,000	10.66
Series A Preferred	0		4,200,000	44.80
Warrants			173,080	1.84
Totals:	5,004,000	100%	7,677,000	100.00