‘‘The investment agreement’’

MEMORANDUM
Based on the concerns and issues of Sahyog India Private Limited (“Sahyog”), the following legal opinion is
provided as:

PARA WISE OPINION;

1) We shall incorporate detailed terms and conditions related to the Compulsorily Convertible Debentures
(CCDs) in the agreement. The terms shall include provisions regarding the nominal number of equity
shares that may be issued to Upright Capital (“Upright”) to enable its participation in Sahyog's
shareholders’ meetings.
2) Sahyog’s concern regarding additional investment from Upright can be addressed by seeking a
commitment in written duly signed from Upright to bring in additional funding, as and when required by
Sahyog, at a mutually acceptable valuation. In the event that Upright is unable or unwilling to commit
further funding, Sahyog will ultimately have the right to bring in other investors as mentioned in clause
13 of the Agreement, even if it results in the dilution of Upright’s stake in Sahyog.
3) In order to address Sahyog's concern about Upright investing in competitors, a comprehensive and
detailed clause is incorporated in the investment agreement. This clause includes a restricted list of
competitors, as requested by Sahyog, while also allowing Sahyog the discretion to revise the list
periodically in accordance with market dynamics. Any violation of this provision should result in the fall-
away of various rights of the investor, specified within the agreement.
4) Protection of Sahyog's sensitive information and data from potential disclosure or misuse should be of
utmost priority which can be achieved by incorporating a standalone Non-Disclosure Agreement and
other clauses that clearly define the limits of information that Upright can request and safeguards
Sahyog's confidential information.
5) In order to prevent poaching of Sahyog's key employees and clients by competitors, a clause is included
to prohibit Upright from directly approaching them for employment or business opportunities. The
clause clearly define the restrictions and exceptions, allowing Upright only to engage with Sahyog's
employees and clients as required to give effect to the agreement.
6) Sahyog and its Promoters shall not be liable to provide damages exceeding the investment amount.
Furthermore, the representations and warranties provided by the Promoters should be minimal, and
the obligation to indemnify Upright for losses should be limited.
7) The clause granting Upright the right to inspection and information has been drafted carefully in the
agreement to ensure that it does not unduly burden Sahyog while also meeting the reasonable needs of
Upright.

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 ‘‘The investment agreement’’

IN CASE OF BREACH OF CONTRACT;

If Upright Capital violates the terms of the agreement, Sahyog may pursue proceedings in accordance
with the Indian Contract Act of 1872 and other pertinent Indian laws. The following guidelines and legal
considerations are listed:

1) INDIAN CONTRACT ACT, 1872;

a) Section 73 allows the collection of damages as compensation for any loss or harm incurred
because of the violation. Section 74 allows the parties to specify liquidated damages in the
contract as long as they accurately foresee the future loss. These provisions provide the affected
party the right to pursue monetary damages for the harm the breach has caused.
b) Section 10 of the Act provides for the remedy of specific performance, where the court may
direct the defaulting party to perform the specific acts promised in the contract. This remedy is
typically sought in cases where monetary compensation may not be an adequate substitute for
the promised performance.
c) Under Section 41, the court may grant an injunction to prevent the breach of a contract. This
remedy is particularly relevant when the breach involves actions that could cause irreparable
harm, and preventing the breach is deemed more appropriate than awarding damages.
d) Section 70 of the Act allows for the recovery of a reasonable sum for services rendered in certain
circumstances, even in the absence of a formal contract. This provision is invoked when one
party has conferred a benefit upon another, and the latter has to compensate for the value
received.
e) Section 56 enshrines the doctrine of frustration, whereby a contract becomes void if, after its
formation, circumstances arise rendering performance impossible, illegal, or radically different
from what was contemplated. This doctrine operates as an exception to the general rule of strict
enforcement.
2) INFORMATION TECHNOLOGY ACT, 20 - If the breach involves the mishandling of sensitive data,
provisions under this Act relating to data protection and cybersecurity may be applicable.
3) COMPANIES ACT, 2013 – As per Section 166 duty shall be imposed on directors to act in the best interests
of the company. If Upright holds directorial positions, their actions could be scrutinized for compliance
with these duties.
Legal proceedings should be approached with caution, and Sahyog should seek the advice from our
esteemed firm to ensure compliance with the relevant provisions of Indian law and the terms of the
Investment Agreement. The choice of legal recourse will depend on the specific nature of the breach and the
desired outcome.
ADVOCATE ABC

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 ‘‘The investment agreement’’

…………………….

INVESTMENT AGREEMENT

This INVESTMENT AGREEMENT is made at Bengaluru on the ……. Day of

……………………, 2023.

BY AND BETWEEN

Sahyog India Private Limited, a company incorporated under the laws of India, having its
registered office at Bengaluru, represented by its Promoters Nikhil Jhaveri and Kamta Prasad.

AND
Upright Capital, a Venture Capital Fund incorporated under the laws of the USA, having its
principal office at USA, represented by [Authorized Representative's Name and Title].

The Company, the Promoters and the Investor are individually referred to as the “Party"
and collectively referred to as the “Parties”.

NOW THEREFORE, IN CONSIDERATION OF THE PREMISES, THE MUTUAL

AGREEMENTS HEREINAFTER CONTAINED, THE PARTIES HEREBY AGREE
AS FOLLOWS:

1. DEFINITIONS:

Definitions: In this Agreement the following terms, to the extent not inconsistent with the
context, shall have the meanings assigned to them herein below:

I. “The Act” shall mean the Companies Act, 2013 as amended from time to time or any
re-enactment thereof.

II. “Agreement" shall mean this Agreement and include the Schedules and Annexures if
any attached hereto together with any written modification or amendment thereof
signed by the Parties.

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 ‘‘The investment agreement’’

III. “Board" shall mean the Board of Directors of the Company.

IV. “Equity Shares” shall mean the equity shares of the Company having a face value of
Rs.100 /- (Rupees hundred only) each or any other face value as may be decided by
the Company, from time to time. Provided that if the face value of the Company’s
Equity Shares is modified from Rs. 100/- per share then references in this Agreement
to number of Equity Shares shall be adjusted accordingly.

V. “Laws” shall mean the laws in force in the Republic of India and shall include all
statues, enactments, and acts of legislature, ordinances, rules, by-laws, regulations,
notifications, guidelines, policies, directions, directives and orders of any government,
statutory authority, tribunal, board, court or recognized stock exchange.

VI. “Parties” shall mean the Company, the Promoters and the Investor, collectively or
any two or more of them and “Party” shall mean any of them individually, as the
context may require.

VII. “Good leaver” shall mean an agreement that specifies the circumstances under which
an individual may leave a company while retaining their equity interest or benefits.
This usually applies when the departure is for reasons deemed favorable or non-
contentious, such as retirement, death, disability, or resignation for a specific set of
reasons defined in the contract.

VIII. “Bad leaver” shall mean the circumstances under which an individual loses their
equity interest or benefits upon leaving the company. This often applies when the
departure is due to unsatisfactory performance, breach of contract, or other
detrimental actions defined in the contract.

2. AGREEMENT TO INVEST:

 Investment details
In accordance to the deal between Upright capital and our client Sahyog India Private
Limited, Upright capital, agrees to invest INR 10,00,00,000 (Indian Rupees Ten Crores)
through the issuance of 10,00,000 (Ten Lakhs) compulsorily convertible debentures (CCDs)
of face value of 100 each by the Company to the Investor.

3. TERMS AND CONDITIONS OF CCDS

 It is agreed by and between the Parties that, bonds must be converted into stock at its
maturity date. In tune with the deal, the …………….. Number of equity shares is being
issued to Upright to enable it to participate in Shareholders’ meetings of Sahyog.

4. TERMS AND CONDITIONS OF THE COMPANY

 Commitment for additional investment

Sahyog seeks upon the commitment from Upright capital to provide additional investment as
and when required by Sahyog at mutually acceptable valuation. In case of non-commitment,

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 ‘‘The investment agreement’’

Promoters reserve the right to seek alternative funding sources even if it effects upright’s
stake in the company.

 Competitors and investment restrictions

For safeguard and prevention from potential loss in business for Sahyog, Upright capital
agrees not to invest in a list of up to 10 (ten) real or perceived competitors of Sahyog. The list
may be revised by Sahyog periodically to reflect market dynamics. This clause is a non-
obstante clause
Which if is violated would triggers fall-away of various rights of the investor. The rights
conferred upon the investor will immediately cease to have effect.

 Non- disclosure and confidentiality

As per the conditions, to protect Sahyog’s confidential information, upright is to have limited
access to information that it can ask for as an investor.

 Non-poaching agreement

Upright is prohibited and barred from directly approaching Sahyog's key employees and
clients for competitive purposes.

 Limitation of liability
Sahyog or the Promoters will not be held responsible for any damages. The Promoters should
only be required to make the bare minimum representations and warranties, as well as to hold
the investors harmless from losses. Uprights total liability for any lawsuits, injuries, expenses,
or damages arising out of or relating to this agreement will be limited. Company will not be
liable for more than the above amount of investment mentioned.

 NBFC license representations

Upright undertakes to comply with RBI regulations regarding foreign investments for NBFC
license, and cooperate with Promoters in securing and maintaining the license. Upright
should also ensure that there should not be any roadblock for Sahyog in gaining NBFC
license.

 Board composition

The board composition shall have only one nominee from Upright. Promoters and the
company shall retain the control over the board.

 Nomination of key positions

The sole right to nominate the Chairman, Managing Director, Chief Executive Officer, Chief
Operating Officer and other CXOs will be with Sahyog. It may inform and consult Upright
on such appointments and Upright may be given the right to seek further information about
the candidates but shall not have a veto right to negate any such nominations and
appointments at the Board or shareholders’ level.

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 ‘‘The investment agreement’’

 Affirmative voting rights

Upright shall be granted Affirmative Voting Rights (AVM) with respect to Sahyog, limited to
decisions of strategic importance and major policy matters. AVM shall not extend to the day-
to-day operations and management of Sahyog. Furthermore, upright shall have AVM
concerning its subsidiary, Sanjog. However, Sahyog reserves the right to carve out
management and operations of Sanjog, especially if it is envisaged to be hived off as a
separate business in the future.

 Pre-emptive Rights:

Right of First Refusal:

If any Promoter (the "Offering Promoter") intends to transfer their shares in Sahyog (the
"Offered Shares") to any third party, they shall first offer the Offered Shares to the other
Promoters (the "Other Promoters") on the same terms and conditions as offered by the third
party.

Exercise of Pre-emptive Rights:

The Other Promoters shall have [Insert Number of Days] days to notify the Offering
Promoter of their intent to purchase the Offered Shares at the offered price. If the Other
Promoters do not exercise their pre-emptive rights within the specified time frame, the
Offering Promoter may proceed to transfer the Offered Shares to the third party on the same
terms.

In the event that Upright expresses its intention to exit the company ("Exiting Party"), the
Promoters shall have the right of first refusal to purchase all, or a portion, of the securities
held by the Exiting Party in Sahyog ("Exit Securities").

5. DEED OF ADHERENCE FOR SECURITIES TRANSFER

 Transfer In the event of Uprights desire to transfer securities to a third party, a Deed of
Adherence shall be executed by the parties involved, outlining the terms and conditions of
such transfer. The Deed shall be in accordance with the applicable laws and regulations
governing such transactions.

6. ADDITIONAL RIGHTS OF INVESTOR

 Upright has been given Inspection and Information Rights, the cost of which has to be
borne by your client. This right shall not cause any unnecessary burden to the company if
Upright is conducting regular inspection.

7. AMENDMENTS
 The agreement can be modified or amended by a written instrument signed by both
parties.

8. SEVERABILITY

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 ‘‘The investment agreement’’

 This agreement’s terms and declarations are meant to be read and understood
independently of one another. If any term, covenant, condition, or provision of this
finance agreement is found to be invalid, void, or unenforceable by a court of competent
jurisdiction, the parties intend for the court to reduce such provision only to the extent
that the court deems it necessary to make the provision reasonable and enforceable, with
the remainder of the provisions of this agreement remaining unaffected.
9. GOVERNING LAW AND JURISDICTION

 This Agreement shall be governed by the laws of India. Any legal proceedings arising out
of or in connection with this Agreement shall be subject to the exclusive jurisdiction of
the competent courts in Bengaluru, India.

10. ARBITRATION:

 Dispute, difference or question which may at any time arise between the parties hereto or
any person claiming under them, touching or arising out of or in respect of any services
provided by company pursuant to this agreement or the subject matter thereof shall be
referred to the arbitration of an arbitrator appointment by the company and the decision of
the arbitrator shall be final and binding on the parties. • Both the parties hereby agree that
the arbitration proceeding shall be carried out at the office premises of the company
which situated at New Delhi.

IN WITNESS WHEREOF, the parties hereto have executed this agreement on the day and date as first
above written.

Signatures: _______________________________
Date:
Place:

Signatures: _______________________________
Date:
Place:

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