DECODING

A TERM SHEET

Upon any Liquidation, the proceeds available for distribution, shall first be

distributed to the holders of the Series A Preferred Shares, prior to any

payment or distribution made to any other holders of Equity Shares for an

amount equal to, the higher of: A) the sum of (i) 1.5 x the total amounts

invested by the Investor(s) till the date of such Liquidation, plus (ii) any

declared but unpaid dividends on such Series A Preferred Shares; OR B)

the proportionate amount to which the Investor would be entitled to, based

on the shareholding of the Investor. If the assets distributable to holders of

any Series A Preferred Shares upon such Liquidation shall be insufficient to

pay the Existing Investor Shares Liquidation Amount to the holders of all

Series A Preferred Shares, then the Shareholders agree that such assets or

the proceeds thereof shall be distributed among the holders of the Series A

Preferred Shares in proportion to the respective amounts to which they

otherwise would be entitled. Each of the holders of Series A Preferred

Shares may elect to waive such holder's right to the Existing Investor

Shares Liquidation Distribution and elect to instead receive their pro rata

portion of the Equity Shares Liquidation Distribution

LIQUIDATION PREFERENCE

Upon any Liquidation,

LIQUIDATION PREFERENCE

THE CLAUSE IN ENGLISH

If you want to sell your company,

proceeds available for distribution, and if you manage to get money,

shall first be distributed, please pay me first,

prior to holders of Equity Shares before you get even a sniff,

the sum of 1.5 x the investment, my investment… and a lot more…

plus declared but unpaid dividends and a little bit more…

and the proportionate amount

based on the shareholding

and more… and a wee bit more

hope you get the drift !

Investor may elect to waive the right I can act charitably to you…

Investor may elect to waive right But I don’t think I will!!!!!!!!!!

If the Company shall issue, on and after the date hereof, any Additional

Equity Shares without consideration or for a consideration per share

less than the Series A Conversion Price in effect immediately prior to

the issuance of such Additional Equity Shares, the Series A Conversion

Price for such series in effect immediately prior to each such issuance

shall forthwith (except as otherwise provided in this clause) be adjusted

to a price determined by multiplying such Series A Conversion Price by

a fraction, (i) the numerator of which shall be the number of shares of

Equity Shares outstanding immediately prior to such issuance (ii)) plus

the number of shares of Equity Shares that the aggregate

consideration received by the Company for such issuance would

purchase at such Series A Conversion Price and (ii) the denominator of

which shall be the number of shares of Equity Shares outstanding

immediately prior to such issuance (ii)) plus the number of shares of

such Additional Equity Shares. Notwithstanding the foregoing, the

holders of seventy-five percent (75%) of the Series A Preferred Shares

may elect to waive the Series A Conversion Price adjustment set forth

herein. The provisions of this Clause shall not be applicable in the

event that the Company issues stock options to its employees.

ANTI – DILUTION

If Company issues Additional Equity

ANTI – DILUTION

THE CLAUSE IN ENGLISH

If you manage to con 1 more invr,

less than the Series A Price who’s smart to know your real value

Series A Price shall be adjusted to it’s my chance to become smart too,

price determined by multiplying and refresh my maths concepts,

to be adjusted to the new price. to try and eliminate all my risk!

Shall not be applicable on ESOP! I love your employees, but not you!

Investor may elect to waive the right Again, I can act charitably to you…

Investor may elect to waive right But again, I don’t think I will!!!!!!!!!!

If the Company is unable to provide the Investors with an exit within 5 years

from the Closing Date, the Investors shall have the right to Transfer all of

their Shares along with a part or whole of the shareholding of the Promoter

to any Third Party (“Drag Along Right”). For this purpose, the Investors

shall have the right but not the obligation to buy out after giving the

Promoter 60 days notice, at any time on or after the date of expiry of 5

years from the Closing Date all shareholding of the Promoter, if any, at the

price per share (“Offer Price”) agreed with the Third Party (“Proposed

Buyer”) for the Investor Shares, as would give to the Proposed Buyer

holding of 100% of the then shareholding of the Promoter. And, in such an

event, the Promoter shall be unconditionally obliged to sell the required

shareholding to the Investors or the Proposed Buyer at the offer price. In

the event of the Drag Along Right is exercised and the sale of Investors

Shares and the Equity Shares of the Promoter is effected, the Company

and the Promoter agree to endeavour that the key Management personnel

shall continue to work in the Company for at least 2 years from the date of

exercise of Drag Along Right, if required at terms mutually discussed and

agreed with such Proposed Buyer.

DRAG ALONG RIGHTS

Company is unable to provide exit

DRAG ALONG RIGHTS

THE CLAUSE IN ENGLISH

If you don’t want to sell company,

Investor shall have right to transfer, your opinion frankly doesn’t matter,

Investor can buy out Promoter, as I have the right to own your soul,

as to give Buyer 100% of Company, which I can totally hawk to anybody,

Promoter unconditionally to sell! and drag you kicking & screaming!

If Drag Along Right is exercised It doesn’t matter if you don’t like it

Key Management shall continue but you have to live with new buyer

At terms mutually discussed and

agreed with Buyer

Better agree else refer to earlier

language – “unconditional”

Investor may elect to waive right No way I am waiving this right ever!!

Neither the Company nor the Promoter shall approve or take any of the

following actions without having first received the approval of the Investor:

Alteration of any provision of the Memorandum or the Articles;

Increase or decrease in the authorized share capital;

Listing or delisting of any securities of the Company;

Creation of any new class or series of shares;

Liquidation, dissolution or winding up of the Company;

Entry into or ratification, variation, termination, waiver or enforcement of any

transaction or agreement with Key Managerial Personnel of the Company;

Declaration of any dividends;

Agreement of the Annual Business Plan and budget of the Company;

Commencement of any line of business, not specified in Business Plan;

Change in the Company’s name, brand name, trademarks, IPR etc.;

Provision of any guarantees or other security or the making of any loans;

The prosecution or settlement of legal actions in excess of INR [●];

Any action that would result in the debt to equity ratio exceeding [●];

Any change in the Company’s statutory or internal auditors;

Remuneration paid to the Chairman and MD of the Company;

Sale or acquisition of tangible or intangible assets exceeding [●];

Incur expenses for an amount in excess of [●];

VETO / SUPER-MAJORITY

The Company shall not approve

VETO / SUPER-MAJORITY

THE CLAUSE IN ENGLISH

We backed you as you are good…

without prior approval of Investor But please check with us before…

Incur expenses exceeding.. Trying to run your business

Purchase assets exceeding… Trying to run your business

Business Plan & Budget… Trying to run your business

Settlement of legal actions.. Trying to run your business

Debt-equity ratio exceeding.. Trying to run your business

Remuneration of Chairman & MD Going to the loo as well!

OTHER TERMS

If the Company does not provide an exit to Investor

within a specified timeframe, the Promoter / Company

are obligated to buyback the Investor’s shares at a

pre-determined rate of return

BUYBACK

If the Promoter wishes to sell his / her shares to a 3rd

party, then Investor approval is needed and if

approved, Investor has the right to match the offer by

the 3rd party and buy the shares

ROFR

If the Promoter wishes to sell his / her shares to a 3rd

party, and if Investor has not exercised ROFR, Investor

also has the right to participate in the sale of shares

together with the Promoter

TAG ALONG

If the Promoter and Investor are not able to agree on

valuation, then the Promoter is issued warrants

convertible into shares to increase his / her stake upon

achievement of pre-agreed milestones

WARRANTS

ISSUE OF WARRANT

CHARGE SHEET

PRISON TERM

Leads

To

Leads

To

TERM SHEET

Liquidation

Preference

Anti - Dilution

Drag AlongVeto / Super-

majority

Tag Along Buyback

Right Of First

RefusalWarrants

INVESTMENT & VALUATION

The financing will be

up to an aggregate of

INR [---] cr

in newly issued preferred shares

at a fully diluted valuation of

INR [---] cr

THANK

YOU