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Sample Investment Term Sheet for Start-ups: Best Corporate Lawyer Advice in Delhi NCR

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Sample Investment Term Sheet for Start-ups: Best Corporate Lawyer Advice in Delhi NCR

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This sample investment term sheet or draft investment term sheet is prepared in general way for the Start-ups in India who are looking forward to investments or foreign investments in their Start-ups. The entire idea is to impart basic legal education and/or primary knowledge of the basis legal clauses which is/are to be included in an investment term sheet. This document shall also help in enriching the Entrepreneur with the basic knowledge of the business laws of India, corporate laws of India and the basic compliances before taking investments in India.

Draft Investment Term Sheet
This non-binding term sheet summarises the major terms and conditions for the investors named on the sheet’s proposed investment in the corporation. This Term Sheet was created to help negotiate the proposed transaction and is a declaration of purpose. It is “not an offer, an agreement to agree, or a commitment to provide financing”. The parties intend to enter into legally binding commitments through definitive agreements they will draught and execute.

Preliminary Details:
1. Parties to Purchase of Interest
In this document, they will be referred to as the “Purchaser” in consideration of the acquisition, which will be referred to as the “corporation.” The abovementioned properties and assets shall be referred to “as the Assigned Interests.”
2. Proposed Purchase Price
The purchase price and payment requirements for the corporation’s sale and transfer of the mentioned Assigned Interests to the purchaser are as follows.
3. Affirmations and Assurances
(a) As mentioned earlier, the Purchaser and the Corporation will adhere to all relevant laws in the country in carrying out the transaction.
(b) As previously stated, the Corporation accepts and lends credence to clear title and control of the Assigned Interests.
(c) The Corporation declares that the Assigned Interests are free and clear of liabilities.
(d) That no current lawsuit or procedure is pending against the Corporation or the Purchaser that would dispute or make unlawful any of the intended transactions herein.
(e) Non-Compete: The Corporation agrees that, as of the date hereof and until the date of Closing, it will not, directly or indirectly, obtain or accept any offer, engage in any other negotiations, enter into or recognise any other agreement regarding the predicted Assigned Interests or a substitute transaction. This restriction applies regardless of whether a broker, agent or other third party is used. As a result, the Corporation declares that any unsolicited proposal for the Assigned Interests will be promptly rejected.
(f) For transactions of this size and type, all transaction paperwork would include conventional representations and warranties.
4. Conditions and date of closure
The Corporation’s responsibilities to complete the envisaged transactions are subject to the following circumstances:
(a) Successful completion of all judicial, financial, tax, commercial, economic, and environmental due diligence in the Corporation’s exclusive discretion;
(b) The negotiation, completion, and delivery of sufficient and mutually acceptable transaction paperwork.
(c) Securing all necessary regulatory, executive board, investment committee, and third-party clearances;
(d) As of the Closing Date, factually accurate declarations and assurances; and
(e) Finally, all processes necessary to accomplish a Settlement must be completed by ___, the actual Closing Date. The Closing, as previously noted, may be prolonged or extended with the common permission of both entities. This Term Sheet will be valid till midnight.
5. Deliverables at closing
The following are the deliverables that are due at the end of the project ___
6. Governing Law
The current legal laws of the State of __ will govern all transaction papers and this Term Sheet.
7. Bookkeeping/Accounting matters
The accountant for the corporation is responsible for ensuring that all financial statements are prepared under widely recognised accounting standards. Furthermore, before closing, all financial statements must be audited.
8. Confidentiality
As a result, both parties keep the terms and conditions specified in this Term Sheet secret.
9. Legal Fees & Expenses
Closing fees and expenditures are the responsibility of both the Corporation and the Purchaser.
10. Non-Disclosure
Neither the Buyer nor the Corporation will make any public announcements about the proposed deal before or after the Closure. The Corporation and the Purchaser agree that any decision about the proposed transaction’s declaration made at or after the Closing will be made jointly, provided that no provision prevents the Corporation from fulfilling any lawful disclosure responsibilities.

Transaction Data:
1. Enterprise
The business is in the transaction of offering web technology services, including creating business and enterprise software to assist clients with payment-related issues through IT and its applications.
2. Promoters
Currently, X and Y (the “Promoters”) are in charge of the Corporation.
3. Current Capital Structure
The 10,000 equity shares with a face value of INR 10 each made up the Corporation’s existing share capital that has been paid up and issued. The Corporation’s share capital that has been paid up and issued is held entirely by the Promoters.
4. Instruments
For an investment of INR 5,00,000, Z (Investor) will receive 1.25 per cent of the firm’s equity shares. The “Investor Shares” refer to all of the Subscription Shares owned by Investors in the Corporation at any moment.
5. Valuation
The Corporation’s pre-money value is INR 5 crore for the proposed transaction.
6. Proposed Transaction
The Investors seek to invest INR 5,00,000 (the “Investment Amount”) in the Corporation following the guidelines outlined below. The partners will work together to accomplish the Proposed Transaction, which includes timely payment of the Investment Amount and delivery of the appropriate Subscription Interests within the time frame stipulated in the Share Holder’s Contract. As of the Closing, the Corporation’s ownership structure will be as described herein in the sheet.

Key Considerations:
1. Board Composition
Investors may propose one director (the “Investor Director”) the Promoters may propose the other directors. Any increase or decrease in the number will be proportionally reflected in the number of directors that the Investors and Promoters have nominated.
2. Exclusive Rights
The Investors will maintain a fully diluted share in the Firm on the same contractual terms as the other investors and will have a pro-rata right to participate in any future issue of shares by the Corporation. Certain instances, as stated in the Definitive Documents, shall be exempt from pre-emptive rights.
3. Anti-dilution Protection
On the date after the Closing, the Corporation provides shareholdings or securities convertible into equity shares to anyone at a price per share that is less than what was paid for the Investor Shares. The Investors will be granted wide-ranging weighted average anti-dilution protection in certain situations. In the mentioned, the Corporation would have to engage with the Investors and Promoters to change the conversion ratio or provide the Investors with more share capital as soon as reasonably possible. The conditions under which anti-dilution protection won’t be employed will be outlined in the Definitive Documents.
4. Promoter’s Lock In
For three years following the Closing, the Promoters will be unable to transfer their interests in the Corporation, either directly or indirectly. The Investors’ prior written consent and the right of first refusal are required before the Sponsors are willing to transfer their interests to a third-party during the Lock-in Period.
5. Promoter’s Rights
For three years, the investors will have no ability to terminate the promoters’ jobs.
6. Vesting of Promoter’s Shares
The remaining 90% of each Promoter’s shares (the “Limited Shares”) will be restricted over three years beginning on the date of Closing (the “Restricted Period”), with 10% of each Promoter’s shares being judged to have vested on this date. In place of transfer to the Corporation, the shares may be transferred in the manner and the price that the Board may determine with the investors’ approval.
7. Right of First Refusal
Assuming one or more of the Promoters or other shareholders wishes to transfer everything or part of their share in the Firm to a third party. In this case, they must first offer their shares to the Investors at the same cost they offered to the private entity. Non-Selling Investors may acquire interests in proportion to their shareholding at their discretion.
8. Tag-Along Right
Subject to the Sponsor’s lock-in, the Investors shall have the right to request the Promoters, as the instance may be, to make sure that such third party purchases the pro-rata Investor Stocks on the same aspects and at the same moment as the Promoters’ shares and the Investors’ shares, if any of the Promoters or other stockholders intend to sell their shares in the Corporation or a significant part of it to a third party and the Depositors do not exercise their right of first refusal. The third-party must first acquire the Investor Shares before the Promoters are allowed to sell any of their interests to that party.
9. Employee Stock Option Plan (ESOP)
The Corporation shall execute an Employee Stock Option Plan “not to exceed 7% of the Corporation’s post-issue shareholding”, as specified in the Definitive Documents, with the Investor Director’s authorization. The ESOP will be utilised to assist the firm in recruiting and retaining employees.
10. Affirmative Voting Rights
Certain actions made by the Corporation or its investors require the Investor Director’s authorization during a Meeting of the board. The Comprehensive Documents will provide a list of conventional positive rights.
11. Information Rights
Investors have a right to receive quarterly accounting statements within 30 days of the end of the prior month, audited performance reports within 60 days of the end of the prior fiscal year, an operations and business plan within 30 days of the start of each new year, and any other business and management information that the Investor requests for as long as they own shares in the corporation.
12. Exit Mechanism
The Corporation and the Investors will make complete and significant efforts to provide the promoters with an exit option through one of the following:
i. Strategic Sale:
The Promoters must assist the sale of the Investor Shares to a strategic buyer at a cost deployable to the Investors within twelve months from the Drop-Dead Date.
ii. Initial Public Offering
The Corporation must provide an exit to the Investors within sixty months of the Closing in the form of an prior public offering of the Corporation on a recognised stock market at an agreed-upon minimum value. However, suppose the Corporation cannot effectively execute a public offering as required. In that case, the Corporation is obligated to give alternative exit alternatives to the Investors, which are exercisable at the Investors’ discretion, as set out below.
iii. Drag Along Option
Suppose the Investors have not obtained an exit via any of the mechanisms specified above after twelve months from the Drop-Dead Date, i.e., 72 months from the closing date. Investors will, after that, have the significant power to transfer their shares to any other entity. The Definitive Documents will include detailed provisions on the exit rights of the Investors.
13. Free Transferability
Investors when selling their corporation’s stock, investors must provide other non-selling investors with the right of first refusal. Subject to the other shareholders’ right to make the first proposal and provided that the Shareholders do not withdraw their money to the business’s rival, the Investors’ shares in the corporation shall be eligible to obtain at any time. The restriction on transferring shares to rivals will be in effect only until the Drop-Dead Date.

Terms of Preferred Share:
1. Dividends
If and when the Board of Directors declares non-cumulative dividends, Preference shareholders will be eligible to earn them at a rate of 1 percent, preferentially to holders of Equity Shares, from funds or reserves that are lawfully accessible for such purposes. Any dividends paid on Equity Shares on an as-if-converted basis will be subject to pro rata participation by Preference Shareholders.
2. Liquidation Preference
Before making any distributions to other current shareholders in the event of business’s dissolution or winding up, the firm will pay the investor the greater of the “fair market value” as evaluated by an independent banker selected by the board, 2X the initial purchase price, or a 25% IRR based on the whole investment, including any dividends, whichever is higher. All exit/liquidity events, collectively referred to as “Liquidity Events,” including Qualified IPOs or any other public offerings of shares, share buybacks, acquisitions, or bankruptcy, will be subject to this. In the event that the Corporation is dissolved, the Investor will be entitled to a refund of its investment before distribution to other shareholders.
3. Exit Rights
In the event that the Corporation is successful in executing an exit for the Investor within 60 months (the “Exit Period”) of the Shareholders Agreement’s effective date, the Investor shall be entitled to a return equal to the greater of (i) the “fair market value” evaluated by an independent banker selected by the Board, (ii) double the initial purchase price, or (iii) a 25% internal rate of return on the investment amount, including dividends paid (“Exit Price”). A liquidity event, an initial public offering (“Qualifying IPO”) at or above the Exit Price, or a combination of the two, or (iii) a satisfactory listing on a stock exchange may all be used to effectuate such an exit, as may the selling of investor shares to any prospective investor or strategic acquirer or (iv) in any other manner the Investor thinks fit.
4. Proportionate Ownership
In accordance with board-approved plans, in connection with acquisitions approved by the board of directors, or in connection with lease financing or other credit arrangements approved by the board of directors, the Investor will have the right to object to the Corporation offering equity securities to anyone other than employees or independent contractors, directors, or consultants(At least one member of the Board of Directors must approve such decisions in order for them to be considered), to buy a “pro rata portion” of such shares with subscription rights over any unsold shares.
5. Voluntary Conversion
The Preference Shares may be converted by the Investor into Equity Shares at any time, subject to the following anti-dilution modification.
6. “Anti-Dilution”
In the event that the Corporation issues additional equity shares with a pre-money value lower than that of the preference shares, the conversion price of the preference shares will be subject to a broadly based weighted average “anti-dilution” measure.
With the following two exceptions: (a) “shares or share equivalents” issued under an “employee stock option plan” approved by the Board, and (b) ‘shares or share equivalents” issued after the date of first subscription for “shares and share equivalents”, the conversion price of the Preference Shares will remain unchanged.
7. Tag Along Right
The Investor has the right to include a pro rata share of the Investor’s shares in any share transfers by the Sponsor and Key Persons, under the same terms and conditions as when such shares or share equivalents are sold. As part of any proposed share transfer by the Sponsor and Key Persons, the Investor shall have the right to sell all of its current shares of the Corporation if the proposed transfer results in a change in control, results in the Sponsor and Key Persons owning “less than 30% of the Company”, or reduces the Investor’s share to “less than 2% of the Corporation’s share capital”. Tag Along rights will not be activated by transactions between the Sponsor and Key Persons of shares or share equivalents.
8. Voting Rights
In accordance with relevant legislation, the Preference Shares will vote alongside the equity shares in the same proportion as they were converted, rather than as a distinct class, on any issues that must be put to a vote by the corporation’s shareholders. The Preference Shares and the Equity Shares, subject to the Protective Provisions, shall be entitled to “one vote per Share determined as converted”.
9. Protective Provisions
The following are the protective provisions. Actions that (i) modify the rights, preferences, or “privileges of Preference Shares”, (ii) increase or decrease the “authorized number of shares of equity or Preference Shares”, (iii) create any “new class or series of shares” with equal rights, preferences, or privileges to the “outstanding series of Preference Shares”, (iv) causes the “redemption of any Preference Shares”, or buys back any Preference Shares, requires the (vi) that causes or obligates the Corporation to a Change of Control through an “amalgamation, merger, consolidation, reconstitution, restructuring, or other similar transaction”, (viii) amends the Corporation’s charter papers; (ix) results in the Corporation’s liquidation, winding up, etc.; or involves the listing or delisting of shares; or involves the offering of shares in a private or public market; or involves the delisting of the Corporation’s shares. (x) any modification to the Corporation’s primary business other than those contemplated in the business plan, any sale of (A) “more than 10% of the Corporation’s assets” or operations is considered a disposal. The creation of subsidiaries or joint ventures (xii) the approval and amendment of the annual business plan, (xv) the hiring of “key personnel and senior management, including those receiving ESOPs” and a remuneration exceeding INR 10 lakhs, (xv) incurring debt in excess of “what is approved by the Board in the annual business plan”, and (xvi) taking any other action as specified in the Shareholder Agreement.
10. Information Rights
After each fiscal year’s completion, 45 days later, the Corporation should send a copy of its annual operating plan as well as audited annual and unaudited monthly financial statements to the Investor. Typical inspection and visiting privileges belong to the investor as well. Any exit/liquidity event, such as a qualified initial public offering or other “public offering of shares, a drag-along, a share repurchases, an acquisition, or bankruptcy” shall cause these provisions to expire.
11. Right of First Refusal
The Investor shall have the right of first refusal with respect to any transfer of shares by other shareholders of the Corporation, with the exception of situations where the Sponsor and Key Persons transfer shares among themselves and no Shareholding of the Sponsor and Key Persons during the Lock-in Period falls below 50%.
12. “Share Subscription & Shareholders’ Agreement”
A “share subscription and shareholders agreement” that is agreeable to both parties will be used to make the investment. This Agreement shall be accompanied by the necessary representations, warranties, covenants of the Corporation reciting the terms hereof, and the necessary closing conditions, including the delivery of the necessary closing documents (such as a letter from counsel and an exceptions schedule).
13. Management Lock-in & Vesting
For five years following the Closing, Sponsor and Key Personnel will be unable to transfer any of their Corporation shares without the Investor’s permission (“Lock-in Period”). The right to sell up to 10% of each of their fully diluted shareholdings in the corporation annually after five years from the closing date will be granted to the Sponsor and Key Persons, “subject to the Investor’s right of first refusal and tag along rights, provided that there is a minimum of six (six) months between sales by the Sponsor and Key Persons” (“Permitted Sale”). The Sponsor and the Key Persons will devote all of their time to the Corporation for at least five years after the Closing, unless the Investors agree otherwise. With the withdrawal of the Investor, all limitations on the transfer of any shares of the Sponsor and Key Persons shall expire. The Sponsor and Key Persons will be entitled to the full vesting of their equity shares as of the Closing Date (of the agreed fully diluted ownership structure).
14. Event of Default
If the “Sponsor and/or any of the Key Persons” violate any of the terms stated in the transaction documents and the violation is not remedied within 30 days of the violation’s occurrence, the Corporation or the “Sponsor and Key Persons” may be required to purchase or buy back the Investor Shares at Exit Price. Specific details on the process must be included in the final agreements.
15. Environmental Due Diligence
A social and environmental review will be conducted by the investor’s evaluation team that is in line with the degree of social and environmental risks and consequences, appropriate for the nature and magnitude of the investment.
The Corporation shall take all necessary steps to:
• adopt the suggestions made in the social and environmental assessment report/action plan; conduct its business in accordance with all pertinent social and environmental laws
• The expense of the environmental due diligence is the investor’s responsibility.
• The structure of the “social and environmental performance report” should be periodically reviewed and modified with the Investor’s permission.
16. Insurance & Indemnification
The Corporation shall get an insurance policy covering directors’ and officers’ liabilities under the conditions and limits sought by such holders. The Corporation will enter into indemnity contracts with directors that will fully protect board members’ rights to indemnification under the law. The Corporation shall get insurance coverage in accordance with the provisions of Annex A after all premiums that are due and payable with regard to the policies have been paid. Once the Corporation’s assets equal Rs. 50,000,000, Coverage 2(a) must be kept in place; Coverage 2(c) must be assessed yearly after the first year of subscription based on the “Corporation’s goods, activities, turnover, and insurance availability”.
17. Legal Counsel & Fees
The Corporation will cover all of its own legal costs, as well as the Investor’s legal counsel and accounting due diligence fees. Initial responsibility for the costs of “legal and accounting due diligence rests” with the investor. The Corporation will refund the Investor for these expenditures only when the transaction has been completed and the full amount of finance as agreed upon has been remitted. Such reimbursement is limited to a maximum of Rs.400,000/-.

Financing Terms:
1. Securities to Be Issued
The Corporation shall award certain units of the Corporation, which will be represented by “SAFEs”, rights in return for money paid by investors to the Corporation, subject to the limitations listed below.
2. Investment Amount
“Lead Investor”: $_________
“Other investors”: $_________
Total: $_________
3. Closing
As long as a total of at least $______ is raised at the initial sale, the Corporation may sell the SAFEs in subsequent closings. The first closing must take place no later than __________, 20__, and 3 months after the “initial closing”, the final closing must happen.
4. Financing Conversion
The automatic conversion of each SAFE into Corporation units will occur upon the “first equity financing” transaction that occurs after the “initial closing date” and generates
“aggregate gross proceeds to the Corporation of at least $________, excluding the conversion of any of the SAFEs”. (“Next Equity Financing”; such conversion, a “Financing Conversion”). Regardless of the quantity of units held by the Lead Investor, following a “Financing Conversion”, the Lead When acquiring equity securities in the Next Equity Financing, the Investor shall be accorded the same advantages, rights, and privileges as other investors, including any rights provided to holders of a minimum number of Company units (i.e., “major investors”).
5. Conversion Price
The greater of (i) “a 20% discount to the lowest cash price per unit paid by investors in the Next Equity Financing” or (ii) the price calculated by “dividing a $ million post-money valuation (“Valuation Cap”) by the Corporation’s fully diluted “pre-money capitalization” (assuming exercise or conversion of all outstanding SAFEs and any other convertible securities) immediately before the Financing Conversion is the price at which the SAFEs would convert in the event of a financing conversion. Therefore, “prior to the Next Equity Round, the Total Investment Amount shall be changed into units representing ___% of the Corporation Capitalization”, and the Investment Amount of the Lead Investor shall be transformed into units representing ___% of the Corporation Capitalization.
6. Acquisition Event
If the corporation merges with or is otherwise acquired by another business (an “Acquisition Event”) before the “Next Equity Financing”, the Company shall “pay each SAFE holder the Investment Amount of their SAFE”, or (ii) At the option of the “holders of a majority of the aggregate purchase amounts of the then-outstanding SAFEs”, the “SAFEs” may be transformed into common units of the Corporation at a conversion price equal to the “Valuation Cap” divided by the Co.
7. Dissolution Event
The Corporation shall “pay each SAFE holder the Investment Amount of their SAFE” in the event that the Corporation dissolves or is otherwise terminated prior to the “Next Equity Financing or an Acquisition Event.”
8. Optional Conversion
Each SAFE owner has the opportunity to convert their SAFE at any point following the first closing’s second anniversary into Common Units at a conversion price determined by dividing the Corporation’s fully diluted pre-money capitalisation by the Valuation Cap.

Lead Investor Rights:
1. Information Rights
Quarterly operational reports, including “financial statements and key performance indicators” that have been agreed upon by the Corporation and the Lead Investor, should be sent by the Corporation to the Lead Investor.
2. Board Observer
The Corporation shall give the observer copies of all notifications, minutes, consents, and other documents that it gives to its management, and the Lead Investor may send a representative to watch meetings of the Corporation’s board of managers (or comparable body) without having the ability to vote. When the corporation elects a board, this right will start to take effect. It will last as long as the Lead Investor owns the SAFE it received during conversion of its SAFE or the units that were given as a result.
3. Option to Sell
The Lead Investor will have the opportunity to sell their Corporation units back to the Corporation at any time once the SAFEs have been converted, for a total purchase price of US $1.00.
4. Pro Rata Rights
The Lead Investor will have a “pro rata right”, but not a responsibility, to engage in the “Next Equity Financing” based on its “percentage equity ownership” after giving pro forma effect to the conversion of the “SAFEs in the Next Equity Financing”. The Lead Investor, its partners, and its affiliates may receive the pro rata share of the Lead Investor.
5. Founder Vesting
The founders’ Common Units will vest in the following manner: 25% will vest after 12 months of service following the original close; the remaining will vest monthly over the next 36 months.
6. Indebtedness and Additional Rights to Units
The Corporation will commit not to issue any additional rights to its units, including “convertible notes or other SAFEs”, or take on any new financial obligations without the prior written permission of the holders of a majority of the “outstanding SAFEs”, as measured by the total purchase amounts.
8. Option Pool
The units chosen for the pool will be included in the calculation of the price per unit in the “Next Equity Financing” if the Corporation chooses to establish an option pool in conjunction with the “Next Equity Financing”, unless the Lead Investor authorises an exemption.
8. Tax Reporting
Following the conversion of the SAFEs, the Corporation will deliver a Schedule K-1 report to the Lead Investor within 180 days of the end of each calendar year.

Documentations & Incidental Matters:
1. Definitive documentations expected date of signing
The parties shall engage in a Share Registration and Shareholders’ Contract within 90 days from the date this Term Sheet is signed. The mentioned above Transaction, which shall include, among other things, the Investors’ rights and responsibilities, as well as the rights and responsibilities of the Corporation’s other shareholders. “Definitive Papers” relate to the SSSHA, the restated articles and memorandum of association, and other incidental documents.
2. Conditions Precedent to Closing
i. The Corporation’s comprehensive legal and financial due diligence must be performed to the competent of the promoters.
ii. Securing any applicable licences, permissions, or approvals necessary for acquiring Investor Shares by Investors.
iii. Amendment of the corporation’s governing documents, an association of the corporation, and any current investors’ agreement to permit the issuing of the Subscription Shares and all rights to that under the Proposed Arrangement, as specified in the Definitive Agreements.
iv. Completion of an employment contract between the Organisation and the Promoters in a format and with terms that the Investors are comfortable with.
v. Completion of the necessary paper work following the agreed-upon provisions as stated in this Term Sheet. It must also include any other agreements or papers deemed necessary by the Parties.
vi. The business, economic state, operating performance, growth prospects, and affiliates have not significantly changed negatively.
vii. Other preconditions that the Investors may deem essential as a consequence of the Corporation’s due diligence or otherwise.
3. Standstill Provisions
Without the agreement of the Investors, the Corporation must not, during the time between the signing of the term sheet and the signing of appropriate paper work or the termination the term sheet, whichever comes first:
i. Unless in the regular course of business, engaging in any deal to acquire real estate, a corporation, or any other investment, or take any action not authorized by this Term Sheet that would materially adversely affect the Corporation’s financial performance and the Proposed Agreement;
ii. Perform the Corporation’s transaction in a manner other than the customary course;
iii. engage into any agreement, transaction, arrangement, or commitment with linked parties;
iv. incur any significant obligation;
v. make any changes to the Corporation’s share capital; and
vi. appoint or remove any senior or key management from the Corporation’s employ.
4. Legislative Approvals
The parties recognise and approve that each one is held responsible for getting the legislative permissions necessary to carry out their respective obligations under the Proposed Transaction. The parties agree to deliver no objection letters and any other communication required for the other party to receive required statutory approvals.

1. Expenses
The Corporation will bear all expenditures related to the Proposed Transaction.
2. Confidentiality
All entities agree to keep all discussions and the details of this Term Sheet utmost confidentiality and not to make any notifications or revelations unless both parties have given their prior written consent, except for revelations or official statements that are required by law or rules and disclosures to each party’s advisors, mentors, employees, or directors on a requirement basis.
3. Inclusion
Both the Firm and the Promoters acknowledge that they are obligated by the evaluation period with the Shareholders under this Term Sheet after 60 days have passed since the operation of the Term Sheet. Neither the Promoters nor the Corporation will make any direct or indirect approaches to, or provide any information regarding, any additional potential investors. The time of exclusivity may be increased voluntarily by both parties.
4. Consummation
The Parties would try to sign final documents no later than 90 days after signing this Term Sheet, which they may mutually extend.
5. Termination
Unless the parties voluntarily extend or cancel it, the Term Sheet will expire in 90 days after its incarceration. It will be terminated automatically when the final documentation replaces it.
6. Alteration
The parties may change the conditions of the Term Sheet with shared signed agreement.
7. Governing Law and Arbitration
Indian law shall be applied to resolve any disputes arising from or connected to this Term Sheet or the Comprehensive Documentations’ legality, implementation, or enforcement. This Term Sheet and the Descriptive Documents will only be subject to the jurisdiction of the courts in X.
8. Legally Binding Understanding
The Parties concur that the clauses outlined in this Term Sheet are not enforceable unless specifically stated herein. The conditions regarding expenses, confidentiality, restriction, fulfilment, expiration of the term sheet, controlling law, and litigation are legally enforceable on the parties regardless of anything else in this term sheet.

This draft investment term sheet or sample investment term sheet cannot be construed as a specific legal advice and is prepared in general terms. Further, this draft cannot substitute a proper legal advice and is issued in public interest only.
Authored By: Adv. Anant Sharma, Lehar Saini & Raghavendran Keerthana

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