1. DECODING
A TERM SHEET

2. 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

3. 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!!!!!!!!!!

4. 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

5. 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!!!!!!!!!!

6. 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

7. 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!!

8. 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

9. 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!

10. 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

11. ISSUE OF WARRANT
CHARGE SHEET
PRISON TERM
Leads
To
Leads
To
TERM SHEET

12. Liquidation
Preference
Anti - Dilution
Drag Along
Veto / Super-
majority
Tag Along Buyback
Right Of First
Refusal
Warrants

14. 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

15. THANK
YOU