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TERM SHEET FOR INVESTMENT IN

[●] [INSERT NAME OF COMPANY]
Date: [●]

This “Term Sheet” relates to the investor’s proposed investment in the company. This Term
Sheet is non-binding and for discussion purposes only among the company, its promoters
and the investor. The investor will only invest upon [approval of the investment by the
investor’s Investment Committee and] execution of transaction documents in a form and
manner as agreed to between the company, promoters and the investor. This Term Sheet
may be altered or amended by the investor for any reason, including as a consequence of
findings arising from the investor’s business and legal due diligence on the company. This
Term Sheet is confidential and should not be shared with anyone other than company and
its representatives without the investor’s prior written consent.

The Proposed Investment

Company: “Company” is Your Dream Pvt. Ltd. , a private limited
company organized under the laws of India and having
its registered office at [●], India.

Promoters: “Promoters” are [●] ‘and [●] (basically, ‘You’ and ‘Your
Business Partner’).

Investor: “Investor” is [●].

Aggregate amount of investor’s “Investment” is INR [●]/- (Indian Rupees [●] only).
investment:

Shares to be issued and Investor will purchase 1000 INR 10/- ([●] only) Preference
pre-money valuation: Shares and 1000 INR 10/- Equity Shares (“Investor
Shares”) at a pre-money valuation of [●] (Indian Rupees
[●] only).

Price per share: “Purchase Price” is INR 150/- (Indian Rupees [●] only) per
Investor Share.

Closing/Disbursement(s): One disbursement of INR 3,00,000/- (Indian Rupees [●]

only) will occur on the “Closing Date“, subject to the
satisfaction of the Conditions Precedent (described
below). The target Closing Date is [●], 2012.

Use of proceeds: Proceeds from the Investment shall be used for the
Company’s business.

Company capitalization: Post Investment, the share capitalization structure of the

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Company is set forth as Annexure A hereto.

Terms of the Investor Shares

Dividends: Investor shares will pay a preferential cumulative
dividend of 15% per year. After preferential dividends
have been paid to the holders of Investor Shares, the
Investor Shares will participate pro rata in any other
dividends or distributions payable to holders of equity
shares.

Liquidation preference: On liquidation, winding up or dissolution of the Company

or a sale of the Company through a merger, sale of
shares, sale of assets or other acquisition or change in
control of the Company, the holders of Investor Shares
will be entitled to receive before any return to holders of
equity shares, a “Liquidation preference” equal to:

(a) 3X the Purchase price; and

(b) any accrued but unpaid dividends.

After the payment of the Liquidation preference, the

liquidation proceeds shall be distributed pari passu
among all holders of equity shares (including the
Investor) on a pro-rata as-if-converted basis, and the
holders of the Investor Shares will participate in
distributions of the remaining liquidation proceeds pro
rata with the holders of equity shares.

Voting rights: The Investor Shares will be entitled to that number of

votes on all matters presented to the holders of equity
shares as if the Investor Shares had already been
converted to equity shares according to the “Conversion
Rate” (see “Conversion Rate” below).

Optional conversion: The Investor Shares are convertible at any time at

Investor’s option into an equivalent number of equity
shares, subject to any adjustment to the conversion rate
following an increase, repayment, subdivision,
consolidation, capitalisation or variation of share capital
or other similar event (the “Recapitalisation Event”) and
to the operation of any anti-dilution adjustment
(described below).

Automatic conversion: Each Investor Share will automatically, mandatorily and

fully convert to equity shares, at the then applicable
Conversion Rate:

(a) Immediately prior to an initial public offering

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("IPO") of the equity shares;

(b) Upon the expiry of twenty (20) years from the

date of issuance.

Conversion rate: Investor Shares will initially be convertible into equity

shares at a "Conversion Rate" equalling, if fully
converted, [●]% ([●] per cent.) of the Company's issued
and paid up equity share capital (subject to the
Company's organizational documents, including
adjustments upon a recapitalisation event and
anti-dilution adjustments as described below).

Anti-dilution adjustment: The Conversion Rate of Investor Shares will be subject to

adjustment on a broad-based weighted average basis, if
the Company issues additional securities at a price per
share less than the then applicable conversion price
(after adjusting for any Recapitalisation Events) other
than:

● shares issued pursuant to the Employee Share

Option Plan (ESOP) approved by Investor;
● shares issued to Investor as a result of Investor
electing to convert their Investor Shares into
equity shares; and
● other standard exceptions.

Protective Affirmative consent of Investor will be required for

provisions/Affirmative right: significant events, including but not limited to:

(a) amending the Company’s organizational

documents;

(b) changing the Company’s share capital including

issuing shares or creating new classes/series of
shares or issuing ESOPs;

(c) paying dividends;

(d) any fresh issue of shares or other instruments;

(e) approving any merger, asset sale, reorganization,

acquisition or any change of control transaction;

(f) approving the Company’s liquidation or

dissolution;

(g) changing the Company’s name, business,

marketing strategies or mission;

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(h) approving the Company’s annual budget

(including approval of the business plan, annual
operating plans and material deviations from
such plans);

(i) capital expenditures or incurrence of

indebtedness greater than INR [●]/- (Indian
Rupees [●] only), including investments in other
entities, the creation of joint ventures or the
acquisition of any company or business and any
strategic, financial or alliance with a third party,
except business, strategic or financial alliance with
third parties including vendors in the ordinary
course of business;

(j) any related party transaction;

(k) change in the remuneration or material terms of

employment of key officers of the Company
including Promoters;

(l) change of the management or control of the

Company, including any change in the board of
directors and any reconstitution, including
appointment of independent directors, or
appointment of the key management personnel
Transfer restrictions on of the Company;
Investor Shares:
(m) Other items agreed upon between the parties in
the Transaction Documents.

Transfer of Investor Shares by the Investor shall be

subject to a right of first offer extended to the Promoters
(as set out in Transaction Documents). The Investor shall
not transfer the Investor Shares to a competitor of the
Company’s business, except with the prior written
approval of the majority of the shareholders of the
Company.

Investor rights

IPO: If the Company seeks to or becomes listed on any stock

exchange, the Investor will have the right (but not the
obligation) to offer for sale in priority to other
shareholders, the Investor Shares, any equity shares that
are issued on their conversion and any other shares in
the Company held by Investor. The Investor shall not be

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designated as a “promoter” nor shall any declaration or

statement be made, either directly or indirectly, in filings
with regulatory authorities, offer documents or
otherwise. The Promoters shall ensure that prescribed
lock-in requirements are met out of the equity shares
held by the Promoters and the Investor shall not be
subject to lock-in restrictions.

Exit rights: The Company, Promoters and the Investor will work
together in good faith to ensure an exit for the Investor
in a timely manner and shall assist the Investor in selling
a part or whole of their shares, at the Investor’s option.

Tag-Along: Except for a Permitted Sale (as defined hereinafter), in

the event of a sale or transfer of any shares whatsoever
by any shareholder other than Investor, or of a change of
control of any of the shareholders other than Investor,
the Investor will have tag-along rights to sell all its
Investor Shares to such third party or person obtaining
control.

All transfers of shareholding shall require the transferee

to sign a deed of adherence to be bound by the
provisions of the Transaction Documents.

Issuance of new securities:
Investor will have the right (but not the obligation) to
purchase pro rata shares of any offering of new securities
by the Company on terms at least as favorable to those
offered to any third party. The pro rata share will be
based on the ratio of (x) the number of Investor Shares
held by such holder (on an as - converted basis) to (y) the
Company’s outstanding shares (on an as - converted
basis).

Right of First Refusal: If any of the Company’s shareholders other than Investor
proposes to transfer any of their Company shares to a
third party, then Investor will have a right of first refusal
to purchase those shares on the same terms as the
proposed transferee.

Management Lock-in, ESOP For ([●]) years following the Closing, Promoters and other
and Promoter Vesting: key employees will not be permitted to transfer any of
their Company shares without the permission of the
Investor.

Upon the expiry of 4 ([●]) years from the Closing Date,

each Promoter shall have the right to individually
transfer (subject only to the Right of First Refusal and the
transferee executing a deed of adherence) up to 5% ([●]
per cent.) of their respective fully diluted shareholding in

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[●],2012

the Company (as calculated on the date of sale of such

shares), every year, provided there is a minimum gap of
12 (twelve) months between each sale transaction by the
said Promoter (“Permitted Sale”).

Promoters and ESOP plan shall have a monthly vesting

spread over ([●]) years commencing from the Closing
Date. If any Promoter’s employment with the Company is
terminated for any reason, all unvested shares will be
transferred to a company managed trust at par value or
bought back by the Company at par value within 30
(thirty) days of termination of employment. Vested
shares of Promoters will be subject to all share transfer
restrictions as applicable to shares held by the Promoter.

Board of Directors: The “Board” will consist of [●] directors who will meet at
least quarterly, unless otherwise agreed by a vote of the
majority of the Board. The Investor will have the right to
elect 1 (one) member of the Board. The Promoters will
have the right to appoint ([●]) director, the Investor shall
appoint [●] director and the Board shall collectively
appoint ([●]) independent directors. The Company will
provide standard directors’ and officers’ insurance,
satisfactory to Investor. The chairman of the Board shall
be appointed by the Board and shall not have a casting
vote.

The Board shall have the right to approve the annual

operating plans, the annual business plan, and the
corporate strategic direction. The Chief Executive Officer
(CEO) will be appointed by the Board of the Company.
The CEO reports in all respects to the Board. Provisions
relating to holding of meetings of the Board, quorum and
other provisions shall be as set forth in the Transaction
Documents.

Board observer rights: Investor shall be entitled to Board observer rights and
will be entitled to participate as an observer at all Board
meetings and to receive copies of all materials
distributed to the Board.

Information and inspection Investor will be provided with standard audited annual
rights: and unaudited quarterly financial statements, unaudited
monthly financial statements, annual business plans and
budgets of the Company, and any other information,
including a series of measures of social impact as agreed
by the Company and Investor, as Investor may
reasonably request. Investor will be entitled to inspection
rights of the books and registers maintained by the
Company.

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Other terms

Share Subscription Agreement The Investment will be made pursuant to a “Subscription

and Shareholders' Agreement:
Agreement” and a “Shareholders’ Agreement”. The Share
Subscription Agreement will contain, among other things,
representations and warranties of the Company and
Promoters, Investor indemnification rights and
conditions precedent to be met prior to the Closing. The
Shareholders’ Agreement will contain, among other
things, the privileges, rights and obligations discussed
above, a description of international best practices and
corporate governance, and other customary provisions.

Conditions Precedent to The Investment will be subject to customary “Conditions

Closing: Precedent”, including, but not limited to:

● completion of business and legal due diligence to the

satisfaction of Investor;
● negotiation and execution of definitive agreements;
● receipt of all required authorizations, approvals and
consents;
● delivery of a final share certificate for the Investor
Shares;
● delivery of an opinion of counsel for the Company;
and
● the absence of material adverse changes of the
Company.

Fees and expenses: Upon Closing, the Promoters will pay a fee of INR 20,000
for due diligence expenses and fees of counsel incurred
in connection with the Investment.

Non-Competition, Each of the Promoters and key management personnel

Non-Solicitation and shall enter into a ([●]) year non-competition,
Employment Agreements: non-solicitation and employment agreement in a form
acceptable to Investor.

Employee Share Option Plan:
The Company will establish an Employee Share Option
Plan (“ESOP”) constituting [●] per cent of the fully diluted
share capital of the Company. All employee options will
vest in accordance with the ESOP, which will be
administered by the Board of Directors of the Company.
Immediately prior to the Investment, [●]/- ([●] only)
equity shares will be added to the option pool for
creation of an unallocated option pool of the Company.

Key Person Insurance: The Company is to acquire key person insurance for each
promoter and key employee in an amount satisfactory to

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[●],2012

the Board. Proceeds are payable to the Company.

Auditor: Investor has the right to approve the appointment and

any change in the Company’s statutory auditors and
accountants.

Governing Law: The laws of India.

Arbitration: All disputes which cannot be resolved amicably will be

resolved by arbitration under the Indian Arbitration and
Conciliation Act, 1996 under a mechanism to be set forth
in the Transaction Documents. The place of arbitration
shall be New Delhi, India.

ACCEPTED AND AGREED ACCEPTED AND AGREED

[●] [●]

Name: Name:

Title: Title:

Date: Date:

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[●],2012

ANNEXURE A

Share capitalization structure of the Company

Company Capitalization: The Company's capitalization

Pre-Closing Post-Closing (Undiluted)

Capital Amount % Amount %
Equity Shares – Promoters [●] 100% [●] [●]
Equity Shares - Investor 0 0% [●] [●]
Equity Shares – Employee Share
Option Plan
Issued 0 0 0 0%
Un-issued 0 0% [●] 16.67%
TOTAL EQUITY SHARES [●] 100% [●] 100%
TOTAL SERIES A PREFERENCE 0 0 1000 100%
SHARES

Fully Diluted Ownership of the

Company: No. of equity
shares % stake
Promoter 1 [●] [●]
Promoter 2 [●] [●]
Investor [●] [●]
Employee stock options [●] [●]
TOTAL: [●] 100.00%

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