<div class="xblock xblock-public_view xblock-public_view-vertical" data-course-id="course-v1:EBC-Learning+contract-drafting-preview-course+2024" data-init="VerticalStudentView" data-runtime-class="LmsRuntime" data-runtime-version="1" data-block-type="vertical" data-usage-id="block-v1:EBC-Learning+contract-drafting-preview-course+2024+type@vertical+block@f4be7fb903f54d358eefa3c86da02197" data-request-token="d441dc4e2f9711f187040242ac12000c" data-graded="False" data-has-score="False"> <div class="vert-mod"> <div class="vert vert-0" data-id="block-v1:EBC-Learning+contract-drafting-preview-course+2024+type@html+block@ed8b7aa187584ed899c9c4f1ea665cf6"> <div class="xblock xblock-public_view xblock-public_view-html xmodule_display xmodule_HtmlBlock" data-course-id="course-v1:EBC-Learning+contract-drafting-preview-course+2024" data-init="XBlockToXModuleShim" data-runtime-class="LmsRuntime" data-runtime-version="1" data-block-type="html" data-usage-id="block-v1:EBC-Learning+contract-drafting-preview-course+2024+type@html+block@ed8b7aa187584ed899c9c4f1ea665cf6" data-request-token="d441dc4e2f9711f187040242ac12000c" data-graded="False" data-has-score="False"> <script type="json/xblock-args" class="xblock-json-init-args"> {"xmodule-type": "HTMLModule"} </script> <link rel="stylesheet" href="https://ebc-assets.s3.ap-south-1.amazonaws.com/css/course-default-styles.css"> <div class="banner-image" id="banner-element"> Sample Term Sheet Modules IV & V: Deep Dive Into Specific Agreements—Term Sheet </div> <script> var bannerElement = document.getElementById("banner-element"); var imageUrl = "https://ebclearning.com/asset-v1:EBC-Learning+law-contract+2025+type@asset+block@e-book.webp"; bannerElement.setAttribute("data-image-url", ""); bannerElement.style.setProperty("--image-url", `url(${imageUrl})`); </script> <div class="body-text-large"> <h2 style="text-align: center;">TERM SHEET</h2> This term sheet (this “Term Sheet”) sets out the principal terms and conditions of a proposed investment (the “Proposed Investment”) to be made by the Investor (as defined below) in the Company (as defined below). The Company and its subsidiaries and controlled affiliates are collectively referred to as the “Group” and individually as a “Group Company.” This Term Sheet is non-binding and does not constitute an agreement to enter into a binding agreement on the terms set forth herein. No binding agreement shall exist, or be deemed to exist, with respect to the subject matter of this Term Sheet or any other correspondence between the parties unless and until a definitive share purchase agreement (the “Share Purchased Agreement”) has been executed by the parties thereto. The foregoing shall not apply to the “Exclusivity”, “Expenses”, “Confidentiality” and “Governing Law and Dispute Resolution” sections of this Term Sheet, which shall constitute binding obligations of the parties. This Term Sheet does not constitute either an offer to sell or an offer to purchase securities. <div class="table-container"> <table> <tbody> <tr> <td colspan="2"> INVESTMENT TERMS </td> </tr> <tr> <td> COMPANY: </td> <td> ABC Private Limited, a company incorporated in India (the “Company”) </td> </tr> <tr> <td> FOUNDERS: </td> <td> Mr. LMN (the “Founder”) </td> </tr> <tr> <td> INVESTOR: </td> <td> XYZ or any of its affiliates (the “Investor”) </td> </tr> <tr> <td> SECURITIES: </td> <td> Class H Compulsorily Convertible Cumulative Preference Shares of the Company, which shall include the rights and privileges described below (the “Class H Preference Shares”, together with the other preference shares of the Company, the “Preference Shares”) </td> </tr> <tr> <td> INVESTMENT AMOUNT: </td> <td> The Investor will invest US$100 million, of which US$75 million will be used to subscribe newly issued Class H Preference Shares, and US$25 million will be caused to purchase secondary shares from UVW (India) Limited, and all such secondary shares will have same rights as that of the Class H Preference Shares upon closing (the “Closing”) of the Proposed Investment, except that the liquidation preference of such secondary shares will remain unchanged. </td> </tr> <tr> <td> VALUATION: </td> <td> The Company’s pre-money valuation for the subscription of Class H Preference Shares is US$880 million, and the Company’s valuation for the purchase of secondary shares from UVW (India) Limited is US$750 million. </td> </tr> <tr> <td> INVESTOR’S OWNERSHIP: </td> <td> Approximately 10.38% of the share capital of the Company (on an as-converted and fully diluted basis) </td> </tr> <tr> <td> SUBSCRIPTION RIGHT: </td> <td> From the first anniversary of the date of Closing (the “Closing Date”) to the third anniversary of the Closing Date, the Investor will have the right (but not an obligation) to subscribe to such number of Class H Preference Shares (“New Shares”) that will constitute 21% of the share capital of the Company (on an as-converted and fully diluted basis) immediately after the Closing (the “Subscription Right”). The valuation of the Company for the issuance of New Shares will be equal to the fair market value of the Company (“FMV”) at time of subscription. The Subscription Right can be exercised by the Investor or any of its affiliates or related parties in full or in tranches. Detailed mechanisms for determining FMV for the purpose of the Subscription Right will be set out in the definitive transaction documents for the Proposed Investment (the “Definitive Documents”). If before the exercise of the Subscription Right, the Company issues new equity or equity-linked securities or otherwise changes its share capital, the number of New Shares that can be subscribed to shall be adjusted accordingly so that the aggregate of (i) the New Shares and (ii) shares owned by the Investor immediately prior to the exercise of the Subscription Right will be one share more than shares owned by the largest shareholder of the Company immediately prior to the exercise of the Subscription Right.  </td> </tr> <tr> <td> ESOP: </td> <td> The Company will establish an employee stock option plan (“ESOP”) immediately following the Closing and 5% of the total share capital of the Company immediately following the Closing (on an as-converted and fully diluted basis) will be reserved under the ESOP. The Company will grant the options to the Founders and key employees under the ESOP. Terms and conditions of the ESOP (including without limitation the vesting period, vesting conditions and exercise price) shall be subject to approval of the Investor. The aforesaid vesting conditions for 3% of the share reserved under the ESOP shall include achievement of certain key performance targets set by the board of directors of the Company (the “Board”) and for the remaining 2% of the shares reserved under the ESOP shall include achievement of certain key performance targets (“Investor KPIs”) mutually agreed between the Company and the Investor, and such Investor KPIs shall included the Specified KPIs (as defined below). Any shares covered by an option which is forfeited, cancelled or expires shall be deemed not to have been issued for purposes of determining the maximum aggregate number of shares which may be issued under the ESOP. </td> </tr> <tr> <td> USE OF PROCEEDS: </td> <td> The proceeds from the Proposed Investment shall be used for the operations of the Group in accordance with the initially budget approved by the Investor. </td> </tr> <tr> <td> CLOSING CONDITIONS: </td> <td> Customary closing conditions mutually agreed by the Company and Investor, including but not limited to: (i) satisfactory due diligence by the Investor; (ii) making or receipt of all required filings, permits, consents and approvals by any governmental entity or other third party; (iii) delivery of customary legal opinions from the Company’s counsel; and (iv) no material adverse change in the Group’s business, assets, liabilities, results of operations, financial condition or prospects. </td> </tr> <tr> <td> REPRESENTATIONS & WARRANTIES; INDEMNIFICATION </td> <td> Customary representations and warranties and indemnification provisions to be included in the Share Purchase Agreement, including indemnification of Investor by the Group and the Founders for breach of representations, warranties, covenants, pre-closing taxes and other matters which may be mutually agreed by the parties. </td> </tr> </tbody> </table> <table> <tbody> <tr> <td colspan="2"> RIGHTS OF INVESTOR AND NEW PREFERENCE SHARES </td> </tr> <tr> <td> INVESTOR DIRECTORS: </td> <td> The Investor shall have representation on the Board roughly in proportion to their shareholding. Immediately following the Closing, The Board shall have up to nine directors and the Investor shall have the right to appoint one director and one observer. </td> </tr> <tr> <td> PROTECTIVE PROVISIONS: </td> <td> Approval of the investor shall be required for the matters of any Group Company set forth in Schedule I. </td> </tr> <tr> <td> DIVIDENDS: </td> <td> Each holder of Class H Preference Shares shall be entitled to customary preferred dividend rights on a pari passu basis with holders of other Preference Shares but prior and in preference to holders of ordinary shares of the Company. </td> </tr> <tr> <td> LIQUIDATION PREFERENCE: </td> <td> Each holder of Class H Preference Share shall be entitled to a liquidation preference equal to such holder’s amount of investment in the Company and the same shall be pari passu with the existing investors of the company. </td> </tr> <tr> <td> CONVERSION: </td> <td> Holders of Class H Preference Shares shall be entitled to customary conversion rights. </td> </tr> <tr> <td> ANTI-DILUTION: </td> <td> The conversion price per Class H Preference Share shall be subject to customary anti-dilution adjustments. </td> </tr> <tr> <td> PREEMPTIVE RIGHTS: </td> <td> Each holder of Class H Preference Shares shall be entitled to customary pro-rata preemptive rights with respect to any new issuances of equity or equity-linked securities of the Company (“Equity Securities”). </td> </tr> <tr> <td> RIGHT OF FIRST REFUSAL AND CO-SALE: </td> <td> Each holder of Class H Preference Shares shall be entitled to customary pro-rata rights of first refusal and co-sale over any proposed direct or indirect transfers of Equity Securities by any other shareholder of the Company. </td> </tr> <tr> <td> DRAG-ALONG: </td> <td> The Investor shall not be subject to any drag-along rights of any other party. The Investor will not have any drag-along rights with respect to other shareholders. </td> </tr> <tr> <td> ISSUANCE OR TRANSFER TO INVESTOR COMPETITORS: </td> <td> Without prior written consent of the Investor, (i) no Group Company may issue or sell any Equity Securities to any competitor (a “Competitor”) of the Investor or its affiliated; and (ii) no shareholder may transfer, directly or indirectly, any Equity Securities to any Competitor. </td> </tr> <tr> <td> INFORMATION AND INSPECTION RIGHTS: </td> <td> The Investor shall be entitled to customary information and inspection rights. </td> </tr> <tr> <td> OTHER RIGHTS: </td> <td> The investor shall receive such other preferences and privileges as are held by existing holders of Preference Shares. </td> </tr> <tr> <td> EMPLOYMENT OF FOUNDERS AND LOCK-UP: </td> <td> Each Founder shall enter into an agreement with the Company in form and substance satisfactory to the Investor, which should at least include the following: i.until the later of (a) the completion of an IPO or (b) three years from the Closing, each Founder shall remain in exclusive, full-time employment with the Company and will not sell any securities in the Company without consent of the investor; and ii.Customary non-solicit, non-compete, proprietary information assignment and confidentiality provisions. </td> </tr> <tr> <td colspan="2"> MISCELLANEOUS </td> </tr> </tbody> </table> <table> <tbody> <tr> <td> EXCLUSIVITY: </td> <td> Until the 60th day after the date of this Term Sheet (the “Exclusivity Period”), the Company, the Founders and their respective affiliates will work with the Investor on an exclusive basis and use their respective best efforts to negotiate a mutually acceptable Share Purchase Agreement prior to the end of the Exclusivity Period. During the Exclusivity Period, except with the prior written consent of the Investor, none of the company, the Founders or their respective affiliates will, directly or indirectly, (i) solicit, initiate or encourage the submission of any proposals or offers from any person other than the Investor (such party, a “Third Party”) relating to any purchase, issuance or sale or other disposition of any equity securities or any material assets of any Group Company (including the assignment, exclusive license, or transfer of any material intellectual property) or any merger, recapitalization or other business combination transaction involving any Group Company (any such transaction, other than the Proposed Investment, a “Competing Transaction”); (ii) participate in any discussions or negotiations with a Third Party with respect to, or authorize, assist, propose or enter into a definitive agreement or an agreement in principle with a Third Party with respect to any Competing Transaction; or (iii) otherwise cooperate in any way with, or assist or participate in, or facilitate or encourage any effort by a Third Party to do or seek to do any of the foregoing or seek to circumvent the Proposed Investment or further a Competing Transaction. However, it is clarified that the obligations under this clause will terminate as soon as the parties mutually agree to not pursue the Proposed investment. </td> </tr> <tr> <td> EXPENSES: </td> <td> The Company and Investor will bear their own expenses in connection with the negotiation and execution of the Proposed Investment. </td> </tr> <tr> <td> CONFIDENTIALITY: </td> <td> The existence and terms of this Term Sheet and the fact that discussions may be ongoing with Investor regarding an investment in the Company shall be kept confidential by the parties hereto and shall not be disclosed to any person, other than disclosure to their and their affiliates’ respective directors, officers, employees, counsel, advisers, other representatives and existing shareholders on a need to know basis (provided these persons are bound by confidentiality obligations with respect to such information), except with the prior written consent of the other party or where disclosure is required by applicable laws, rules of applicable stock exchange or legal proceedings. </td> </tr> <tr> <td> GOVERNING LAW AND DISPUTE RESOLUTION: </td> <td> This Term Sheet shall be governed by the laws of Singapore. Any dispute arising in connection with this Term Sheet shall be resolved by arbitration in Singapore following the Arbitration Rules of the Singapore International Arbitration Centre. </td> </tr> <tr> <td> COUNTERPARTS: </td> <td> This Term Sheet may be signed by either party on separate counterparts and all such counterparts when taken together shall constitute one and the same document. </td> </tr> </tbody> </table> </div> </div> </div> </div> </div> <script type="text/javascript"> (function (require) { require(['/static/js/dateutil_factory.a28baef97506.js?raw'], function () { require(['js/dateutil_factory'], function (DateUtilFactory) { DateUtilFactory.transform('.localized-datetime'); }); }); }).call(this, require || RequireJS.require); </script> <script> function emit_event(message) { parent.postMessage(message, '*'); } </script> </div>

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