5.1.6.a: Term Sheet: E Round: Selected Clauses Specific to Cram Downs

Contributing Editor: Joseph W. Bartlett of Sullivan & Worcester LLP

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Abstract

Herewith some selected term sheet clauses which can be folded into a term sheet if a cram down of prior preferred is in order. Series E Pay To Play: Holders of Existing Preferred that purchase their full pro-rata share of the $15 million in Series E Stock will be entitled to preserve the rights, preferences and privileges of their Existing Preferred by exchanging these shares of Series A Preferred, Series B Preferred, Series C Preferred, Series D Preferred and Series D-1 Preferred for shares of Series A-1 Preferred Stock, Series B-1 Preferred Stock, Series C-1 Preferred Stock, Series D-2 Preferred Stock and Series D-3 Preferred Stock, respectively (collectively, the "New Preferred"), on a 1:1 basis. For example, a current stockholder that holds 100,000 shares of Series C Preferred Stock and 50,000 shares of Series D Preferred...