We present a shareholders agreement template for raising compulsorily convertible debt funding. This contains all the important terms and conditions for you to consider while drafting an SHA.
Founders must pay close attention to any shareholder agreements or subscription agreements involved in the fundraising process, as these documents govern the rights and obligations of the investors and the company.
Properly drafted agreements can help prevent disputes and misunderstandings down the line.
Furthermore, founders should ensure that all regulatory filings and disclosures are accurate and complete, as failure to comply with legal requirements can result in significant consequences for the company.
Finally, founders should handle any due diligence documents with care, providing accurate and transparent information to potential investors to build trust and confidence in the business.
Overall, careful management of these documents is essential for a successful fundraising process and the startup's long-term success.
Agreement for Educational Services to StartupsSV.CO
This agreement is between a service provider that offers educational services to startups and a startup company and its founders. The service provider will provide services to help the startup grow its business and help the founders find employment or an acquisition of the startup. In return, the startup will pay the service provider a percentage of revenues from customers referred by the service provider, equity in the startup, and a cash bonus if the startup is acquired. The agreement defines key terms, outlines the services to be provided, and specifies the consideration owed to the service provider in exchange for its services.
Agreement for educational_services_to_startups-v2_(13.1.2016)Aditya Nair
This agreement is between a service provider that offers educational services to startups and a startup company and its founders. The service provider will provide services to help the startup grow its business and help the founders find employment or an acquisition of the startup. In return, the startup will pay the service provider a percentage of revenues from customers referred by the service provider, equity in the startup, and a cash bonus if the startup is acquired by a buyer referred by the service provider. The agreement defines key terms, outlines the services to be provided, and specifies the consideration to be paid by the startup to the service provider.
Startup PPT New _20231108_133402_0000.pdfMANOJLAMBA7
This document is a template for a founder's agreement that establishes the terms of a business venture between co-founders. It outlines provisions for initial capital contributions, ownership structure and voting rights distributed based on ownership percentages, intellectual property ownership being assigned to the company, procedures for amendment and termination, and resignation of founders. It also includes boilerplate clauses for confidentiality, dispute resolution through mediation or arbitration, and defining the agreement as the entire understanding between the founders. The founder's agreement is intended to prevent disputes between co-founders by formalizing expectations upfront.
The document defines shares and the different types of shares such as ordinary shares and preferred shares. It discusses shareholders' rights and how class rights can be varied. It also covers topics such as prospectuses, share buybacks, and references used. Key points include definitions of shares and shareholders' interests, types of preferred shares, requirements for prospectuses, methods for accounting for share buybacks, and how class rights can be varied with shareholder approval or through the courts.
CONVERTIBLE DEBENTURE PURCHASE AGREEMENT FORMAT
FREE LEGAL AND ACCOUNTANT FORMATS
KANOON KE RAKHWALE INDIA
HIRE LAWYER ONLINE
LAW FIRMS IN DELHI
CA FIRM DELHI
VISIT : https://www.kanoonkerakhwale.com/
VISIT : https://hirelawyeronline.com/
This document contains the memorandum and articles of association for GMAX IT LIMITED, a private limited company in Bangladesh.
The memorandum outlines the company name, registered office location, objectives including promoting ICT development and carrying out related businesses, and share capital structure.
The articles provide regulations for the company including defining it as a private limited company, outlining business scope, share capital details, procedures for share certificates, calls on shares, share transfers, borrowing powers, general meetings, voting rights, and details on the board of directors including their qualifications, remuneration, and circumstances for vacating office.
INVESTMENT AGREEMENT FORMAT
FREE LEGAL AND ACCOUNTANT FORMATS
KANOON KE RAKHWALE INDIA
HIRE LAWYER ONLINE
LAW FIRMS IN DELHI
CA FIRM DELHI
VISIT : https://www.kanoonkerakhwale.com/
VISIT : https://hirelawyeronline.com/
Agreement for Educational Services to StartupsSV.CO
This agreement is between a service provider that offers educational services to startups and a startup company and its founders. The service provider will provide services to help the startup grow its business and help the founders find employment or an acquisition of the startup. In return, the startup will pay the service provider a percentage of revenues from customers referred by the service provider, equity in the startup, and a cash bonus if the startup is acquired. The agreement defines key terms, outlines the services to be provided, and specifies the consideration owed to the service provider in exchange for its services.
Agreement for educational_services_to_startups-v2_(13.1.2016)Aditya Nair
This agreement is between a service provider that offers educational services to startups and a startup company and its founders. The service provider will provide services to help the startup grow its business and help the founders find employment or an acquisition of the startup. In return, the startup will pay the service provider a percentage of revenues from customers referred by the service provider, equity in the startup, and a cash bonus if the startup is acquired by a buyer referred by the service provider. The agreement defines key terms, outlines the services to be provided, and specifies the consideration to be paid by the startup to the service provider.
Startup PPT New _20231108_133402_0000.pdfMANOJLAMBA7
This document is a template for a founder's agreement that establishes the terms of a business venture between co-founders. It outlines provisions for initial capital contributions, ownership structure and voting rights distributed based on ownership percentages, intellectual property ownership being assigned to the company, procedures for amendment and termination, and resignation of founders. It also includes boilerplate clauses for confidentiality, dispute resolution through mediation or arbitration, and defining the agreement as the entire understanding between the founders. The founder's agreement is intended to prevent disputes between co-founders by formalizing expectations upfront.
The document defines shares and the different types of shares such as ordinary shares and preferred shares. It discusses shareholders' rights and how class rights can be varied. It also covers topics such as prospectuses, share buybacks, and references used. Key points include definitions of shares and shareholders' interests, types of preferred shares, requirements for prospectuses, methods for accounting for share buybacks, and how class rights can be varied with shareholder approval or through the courts.
CONVERTIBLE DEBENTURE PURCHASE AGREEMENT FORMAT
FREE LEGAL AND ACCOUNTANT FORMATS
KANOON KE RAKHWALE INDIA
HIRE LAWYER ONLINE
LAW FIRMS IN DELHI
CA FIRM DELHI
VISIT : https://www.kanoonkerakhwale.com/
VISIT : https://hirelawyeronline.com/
This document contains the memorandum and articles of association for GMAX IT LIMITED, a private limited company in Bangladesh.
The memorandum outlines the company name, registered office location, objectives including promoting ICT development and carrying out related businesses, and share capital structure.
The articles provide regulations for the company including defining it as a private limited company, outlining business scope, share capital details, procedures for share certificates, calls on shares, share transfers, borrowing powers, general meetings, voting rights, and details on the board of directors including their qualifications, remuneration, and circumstances for vacating office.
INVESTMENT AGREEMENT FORMAT
FREE LEGAL AND ACCOUNTANT FORMATS
KANOON KE RAKHWALE INDIA
HIRE LAWYER ONLINE
LAW FIRMS IN DELHI
CA FIRM DELHI
VISIT : https://www.kanoonkerakhwale.com/
VISIT : https://hirelawyeronline.com/
Notice of extraordinary general meetingJoginder Pal
The document is a notice for an Extraordinary General Meeting of XYZ Pvt Ltd to be held on December 26, 2018. There are two items on the agenda: 1) To issue Cumulative Convertible Preference Shares through private placement and 2) To reclassify the authorized share capital of the company. The meeting notice provides details on the terms of the preference shares issuance such as issue price, dividend rate, conversion/redemption terms, and voting rights. It also outlines the proposed changes to the authorized share capital.
This document establishes a partnership between four individuals. It outlines their capital contributions, profit/loss sharing ratios, duties and responsibilities, financial procedures, retirement/death provisions, and other standard partnership terms. Specifically:
- The four partners will contribute initial capital and can contribute additional funds as needed.
- Profits and losses will be shared equally at 25% each.
- The partnership will operate a business involving [details not provided] and last indefinitely.
- It establishes procedures for accounting, borrowing, representation of the partnership, and dissolution.
- Upon retirement, insolvency or death of a partner, the partnership will generally continue between the remaining partners.
Taxmann's analysis of the finance bill 2021 (as passed by the lok sabha)Taxmann
Your Analysis on the Finance Bill 2021 (as passed by the Lok Sabha). Delivered! ⚡ | https://bit.ly/3d6lkiO
Download/Read Taxmann’s comprehensive (50+ Pages) analysis of the Finance Bill, 2021 as passed by the Lok Sabha.
This document is a plan support agreement between KIT digital, Inc. and three sponsors (JEC Capital Partners, Ratio Capital Partners, and Prescott Group Capital Management) to implement a restructuring of KIT digital's debt. Key points:
- The sponsors deposited $1.5 million in escrow and committed to fund the restructuring.
- The parties agree to support a chapter 11 plan of reorganization consistent with the terms in Exhibit A, which sets forth the restructuring proposal.
- The sponsors and company agree not to support any alternative restructuring transactions, except the company can consider superior offers if required by its fiduciary duties to shareholders.
This document outlines the policies and procedures between QNet Ltd and its independent representatives. It defines key terms and covers topics such as how to become a representative, renewing representativeship, business entities, changes in ownership, accepting multiple applications, customer referrals, and appointment of representatives. Representatives must renew their status annually by paying a non-refundable fee on or before their anniversary date, with a 30 day grace period to pay afterwards to maintain their agreement.
(1) Section 186 of the Companies Act 2013 regulates inter-corporate loans and investments made by companies. It restricts such loans/investments to 60% of the company's paid-up capital and reserves or 100% of its reserves, whichever is higher.
(2) Exceptions to Section 186 include loans by banking, insurance, housing finance companies and infrastructure finance companies in the normal course of business. Registered non-banking finance companies focused on security acquisition are also exempt.
(3) Contravention of Section 186 attracts a penalty of up to Rs. 5 lakhs for the company and imprisonment up to 2 years and a fine of up to Rs. 1 lakh for officers in
This document is a fundraising agreement between a fundraiser and an organization. It outlines the services to be provided by the fundraiser, which include representing the organization in soliciting donations, designing promotional materials and events, and securing necessary permits. It also specifies the compensation and payment terms, as well as the rights and responsibilities of both parties. The agreement is effective for a set period of time, but can be cancelled or amended with proper notice and consent from both parties. It aims to clearly define the relationship and obligations of the fundraiser and organization for their fundraising collaboration.
Impact of Companies (Acceptance of Deposits) Amendment Rules, 2019Mohd.Asif Khan
The Companies (Acceptance of Deposits) Amendment Rules, 2019 made several changes including: 1) Amounts received from Real Estate Investment Trusts will no longer be considered deposits; 2) Form DPT-3 was substituted and must now be filed annually with details of deposits and transactions not considered deposits; 3) A onetime return in Form DPT-3 must be filed within 90 days providing outstanding receipts from 2014 to 2019 not considered deposits.
Key Takeaways:
Restrictions on allotment and commencement of business
Allotment of shares by private and public companies
Rights and powers attaching shares
Issue of shares with differential voting rights
The document summarizes recent changes and clarifications related to corporate laws in India. It discusses:
1) Amendments to exclude independent directors and their relatives from the definition of related parties for related party transactions.
2) Clarification that restrictions on related party transactions do not apply to mergers, amalgamations, and schemes of arrangements.
3) No fresh approval needed for pre-existing related party contracts, unless terms are modified.
The document summarizes new rules notified in India that permit cross-border mergers through a scheme sanctioned by the National Company Law Tribunal. Key points:
- Section 234 of the Companies Act 2013 and new Rule 25A allow an Indian company to merge with a foreign company or vice versa, as long as the foreign company is from a recognized jurisdiction.
- Mergers require compliance with Sections 230-232 of the Act, RBI approval, valuation of both companies by qualified valuers, and regulations on foreign investments into India if an Indian company merges with a foreign one.
- If an Indian company merges into a foreign one, regulations on overseas investments will apply to the resultant foreign company.
MCA Tweaks CFS Exemption in lines with Ind AS 110Sumit Binani
The document summarizes key amendments made by the Ministry of Corporate Affairs to the Companies (Accounts) Rules, 2014 regarding the preparation of consolidated financial statements and reporting requirements. Some of the main changes include exempting certain wholly-owned or partially-owned subsidiaries from preparing consolidated financial statements if certain conditions are met, replacing requirements to report on performance of subsidiaries with reporting on highlights and contributions, and allowing an internal auditor to be an individual, partnership or corporate entity rather than just a firm. The document provides examples and addresses frequently asked questions to help explain and clarify the impact of the amendments.
This agreement is between PSSG Venture LLP and a second party to admit the second party as a financial promoter and partner in the LLP. The second party will contribute Rs. 5,00,000 to the LLP's business fund and Rs. 1,000 as advance toward capital contribution. In return, the second party will receive a fixed percentage compensation annually on their business fund contribution and will share in the LLP's profits and losses. The agreement details the capital contributions and profit/loss sharing ratios of both parties to maintain their ownership percentages in the LLP.
This agreement is between PSSG Venture LLP and a second party to admit the second party as a financial promoter and partner in the LLP. The second party will contribute Rs. 5,00,000 to the LLP's business fund and Rs. 1,000 as advance toward capital contribution. In return, the second party will receive a fixed percentage compensation annually on their business fund contribution and will share in the LLP's profits and losses. The agreement details the capital contributions and profit/loss sharing ratios of both parties to maintain their ownership percentages in the LLP.
This agreement is between PSSG Venture LLP and a second party to admit the second party as a financial promoter and partner in the LLP. The second party will contribute Rs. 5,00,000 to the LLP's business fund and Rs. 1,000 as advance toward capital contribution. In return, the second party will receive a fixed percentage compensation on their business fund contribution and share in the LLP's profits and losses. The agreement details the capital contributions and profit/loss sharing ratios between the original and new partners.
This agreement is between PSSG Venture LLP and a second party to admit the second party as a financial promoter and partner in the LLP. The second party will contribute Rs. 5,00,000 to the LLP's business fund and Rs. 1,000 as advance toward capital contribution. In return, the second party will receive a fixed percentage compensation on their business fund contribution and share in the LLP's profits and losses. The agreement details the contributions, profit sharing ratios, restrictions on transfers of shares, and compensation terms for the second party.
The SEBI has notified new listing regulations that consolidate existing listing rules and align them with the Companies Act of 2013. The regulations replace all previous listing agreements and will be effective 90 days after publication. Two provisions regarding related party transactions and reclassification of promoters will apply immediately. The regulations divide content into substantive provisions and procedural schedules. Listed companies must sign a new shortened listing agreement within six months and the regulations apply to all listed securities on stock exchanges.
This document is a project report on tax planning, tax avoidance, and tax evasion. It discusses several cases related to tax planning, including one where the quantum of remuneration or manner of computing remuneration for partners was not stipulated in the partnership deed as required. The report examines the relevant clauses of two partnership deeds to determine if the conditions for deducting remuneration payments under Section 40(b)(v) of the Income Tax Act are satisfied.
Weitere ähnliche Inhalte
Ähnlich wie Shareholders Agreement Template for Compulsorily Convertible Debt Funding- StartupSprouts.in
Notice of extraordinary general meetingJoginder Pal
The document is a notice for an Extraordinary General Meeting of XYZ Pvt Ltd to be held on December 26, 2018. There are two items on the agenda: 1) To issue Cumulative Convertible Preference Shares through private placement and 2) To reclassify the authorized share capital of the company. The meeting notice provides details on the terms of the preference shares issuance such as issue price, dividend rate, conversion/redemption terms, and voting rights. It also outlines the proposed changes to the authorized share capital.
This document establishes a partnership between four individuals. It outlines their capital contributions, profit/loss sharing ratios, duties and responsibilities, financial procedures, retirement/death provisions, and other standard partnership terms. Specifically:
- The four partners will contribute initial capital and can contribute additional funds as needed.
- Profits and losses will be shared equally at 25% each.
- The partnership will operate a business involving [details not provided] and last indefinitely.
- It establishes procedures for accounting, borrowing, representation of the partnership, and dissolution.
- Upon retirement, insolvency or death of a partner, the partnership will generally continue between the remaining partners.
Taxmann's analysis of the finance bill 2021 (as passed by the lok sabha)Taxmann
Your Analysis on the Finance Bill 2021 (as passed by the Lok Sabha). Delivered! ⚡ | https://bit.ly/3d6lkiO
Download/Read Taxmann’s comprehensive (50+ Pages) analysis of the Finance Bill, 2021 as passed by the Lok Sabha.
This document is a plan support agreement between KIT digital, Inc. and three sponsors (JEC Capital Partners, Ratio Capital Partners, and Prescott Group Capital Management) to implement a restructuring of KIT digital's debt. Key points:
- The sponsors deposited $1.5 million in escrow and committed to fund the restructuring.
- The parties agree to support a chapter 11 plan of reorganization consistent with the terms in Exhibit A, which sets forth the restructuring proposal.
- The sponsors and company agree not to support any alternative restructuring transactions, except the company can consider superior offers if required by its fiduciary duties to shareholders.
This document outlines the policies and procedures between QNet Ltd and its independent representatives. It defines key terms and covers topics such as how to become a representative, renewing representativeship, business entities, changes in ownership, accepting multiple applications, customer referrals, and appointment of representatives. Representatives must renew their status annually by paying a non-refundable fee on or before their anniversary date, with a 30 day grace period to pay afterwards to maintain their agreement.
(1) Section 186 of the Companies Act 2013 regulates inter-corporate loans and investments made by companies. It restricts such loans/investments to 60% of the company's paid-up capital and reserves or 100% of its reserves, whichever is higher.
(2) Exceptions to Section 186 include loans by banking, insurance, housing finance companies and infrastructure finance companies in the normal course of business. Registered non-banking finance companies focused on security acquisition are also exempt.
(3) Contravention of Section 186 attracts a penalty of up to Rs. 5 lakhs for the company and imprisonment up to 2 years and a fine of up to Rs. 1 lakh for officers in
This document is a fundraising agreement between a fundraiser and an organization. It outlines the services to be provided by the fundraiser, which include representing the organization in soliciting donations, designing promotional materials and events, and securing necessary permits. It also specifies the compensation and payment terms, as well as the rights and responsibilities of both parties. The agreement is effective for a set period of time, but can be cancelled or amended with proper notice and consent from both parties. It aims to clearly define the relationship and obligations of the fundraiser and organization for their fundraising collaboration.
Impact of Companies (Acceptance of Deposits) Amendment Rules, 2019Mohd.Asif Khan
The Companies (Acceptance of Deposits) Amendment Rules, 2019 made several changes including: 1) Amounts received from Real Estate Investment Trusts will no longer be considered deposits; 2) Form DPT-3 was substituted and must now be filed annually with details of deposits and transactions not considered deposits; 3) A onetime return in Form DPT-3 must be filed within 90 days providing outstanding receipts from 2014 to 2019 not considered deposits.
Key Takeaways:
Restrictions on allotment and commencement of business
Allotment of shares by private and public companies
Rights and powers attaching shares
Issue of shares with differential voting rights
The document summarizes recent changes and clarifications related to corporate laws in India. It discusses:
1) Amendments to exclude independent directors and their relatives from the definition of related parties for related party transactions.
2) Clarification that restrictions on related party transactions do not apply to mergers, amalgamations, and schemes of arrangements.
3) No fresh approval needed for pre-existing related party contracts, unless terms are modified.
The document summarizes new rules notified in India that permit cross-border mergers through a scheme sanctioned by the National Company Law Tribunal. Key points:
- Section 234 of the Companies Act 2013 and new Rule 25A allow an Indian company to merge with a foreign company or vice versa, as long as the foreign company is from a recognized jurisdiction.
- Mergers require compliance with Sections 230-232 of the Act, RBI approval, valuation of both companies by qualified valuers, and regulations on foreign investments into India if an Indian company merges with a foreign one.
- If an Indian company merges into a foreign one, regulations on overseas investments will apply to the resultant foreign company.
MCA Tweaks CFS Exemption in lines with Ind AS 110Sumit Binani
The document summarizes key amendments made by the Ministry of Corporate Affairs to the Companies (Accounts) Rules, 2014 regarding the preparation of consolidated financial statements and reporting requirements. Some of the main changes include exempting certain wholly-owned or partially-owned subsidiaries from preparing consolidated financial statements if certain conditions are met, replacing requirements to report on performance of subsidiaries with reporting on highlights and contributions, and allowing an internal auditor to be an individual, partnership or corporate entity rather than just a firm. The document provides examples and addresses frequently asked questions to help explain and clarify the impact of the amendments.
This agreement is between PSSG Venture LLP and a second party to admit the second party as a financial promoter and partner in the LLP. The second party will contribute Rs. 5,00,000 to the LLP's business fund and Rs. 1,000 as advance toward capital contribution. In return, the second party will receive a fixed percentage compensation annually on their business fund contribution and will share in the LLP's profits and losses. The agreement details the capital contributions and profit/loss sharing ratios of both parties to maintain their ownership percentages in the LLP.
This agreement is between PSSG Venture LLP and a second party to admit the second party as a financial promoter and partner in the LLP. The second party will contribute Rs. 5,00,000 to the LLP's business fund and Rs. 1,000 as advance toward capital contribution. In return, the second party will receive a fixed percentage compensation annually on their business fund contribution and will share in the LLP's profits and losses. The agreement details the capital contributions and profit/loss sharing ratios of both parties to maintain their ownership percentages in the LLP.
This agreement is between PSSG Venture LLP and a second party to admit the second party as a financial promoter and partner in the LLP. The second party will contribute Rs. 5,00,000 to the LLP's business fund and Rs. 1,000 as advance toward capital contribution. In return, the second party will receive a fixed percentage compensation on their business fund contribution and share in the LLP's profits and losses. The agreement details the capital contributions and profit/loss sharing ratios between the original and new partners.
This agreement is between PSSG Venture LLP and a second party to admit the second party as a financial promoter and partner in the LLP. The second party will contribute Rs. 5,00,000 to the LLP's business fund and Rs. 1,000 as advance toward capital contribution. In return, the second party will receive a fixed percentage compensation on their business fund contribution and share in the LLP's profits and losses. The agreement details the contributions, profit sharing ratios, restrictions on transfers of shares, and compensation terms for the second party.
The SEBI has notified new listing regulations that consolidate existing listing rules and align them with the Companies Act of 2013. The regulations replace all previous listing agreements and will be effective 90 days after publication. Two provisions regarding related party transactions and reclassification of promoters will apply immediately. The regulations divide content into substantive provisions and procedural schedules. Listed companies must sign a new shortened listing agreement within six months and the regulations apply to all listed securities on stock exchanges.
This document is a project report on tax planning, tax avoidance, and tax evasion. It discusses several cases related to tax planning, including one where the quantum of remuneration or manner of computing remuneration for partners was not stipulated in the partnership deed as required. The report examines the relevant clauses of two partnership deeds to determine if the conditions for deducting remuneration payments under Section 40(b)(v) of the Income Tax Act are satisfied.
Ähnlich wie Shareholders Agreement Template for Compulsorily Convertible Debt Funding- StartupSprouts.in (20)
2. AGREEMENT FOR UNSECURED COMPULSORILY CONVERTIBLE DEBT AGREEMENT
AND WHEREAS The Company “Startup Sprouts”, endeavors in the field of Digital
Content and Tools for Startups.
(“DUMMY ORGANIZATION FOUNDATION” AND “COMPANY” hereinafter collectively referred
to as “Parties” and Individually as “Party”).
This Unsecured Compulsorily Convertible Debt Agreement Agreement ) is made at New Delhi on
28-02-20XX, New Delhi, 110001
AND WHEREAS
The Dummy Organisation Foundation has expressed its desire to provide a seed fund assistance in
the form of Compulsorily Convertible Debt to the Company under the Startup India Seed Fund
BETWEEN
DUMMY ORGANIZATION FOUNDATION, company registered under section 8 under the
provisions of the Companies Act, 2013 and having its registered office at Office No. 2833, 11th
Floor, TowerD,ConnaughtPlace,110001(hereinafter referredtoasthe"Investor/Dummy
Organization Foundation context or meaning thereof be deemed to mean and include its
permitted successors and assigns) of the FIRST PART;
AND
Startup Sprouts Ventures CIN: U49383DK2023DJD394034 , a company registered under the
provisions of the Companies Act, 2013 and is a registered start-up recognized by DIPP (Certificate
No.; DIPP349384) and having its registered office at Plot 39, First Floor Shamsher, Singh State,
Hauj Khas Village, Lane 2, Delhi, India, 110030 (hereinafter referred to as the "Company" which
expression shall unless it be repugnant to the context or meaning thereof be deemed to mean and
include its successors and assigns) of the SECOND PART;
WHEREAS Dummy Organisation Foundation agrees to invest a total seed fund assistance in the
form of Compulsorily Convertible Debt instrument up to INR 10,00,000/- (Rupees Ten Lakhs
Only) disbursable in multiple tranches linked to pre-specified milestones as per terms of this
Agreement, under the Seed Support System for start-ups under the Start-up India Seed Fund
Scheme (SISFS) of DPIIT, Govt of India as per terms of the investment policy into start-up
companies.
1
3. INTERPRETATION
NOW THEREFORE, in view of the foregoing and in consideration of the mutual covenants and
agreements hereinafter set forth, COMPANY and Dummy Organisation Foundation agreed as
follows.
Scheme after having selected the Company through the selection process established under the
scheme and the Company has agreed to take the Seed Fund Assistance from the Investor on the
terms and conditions set out in this Agreement.
AND WHEREAS as per the terms of Investment, the financial Assistance will be converted into
a fully paid-up equity shares of COMPANY at the option of the Dummy Organisation Foundation
at the mutually agreed valuation of COMPANY at time of conversion and as per the provisions
of the Companies Act, 2013.
AND WHEREAS
amount of the total agreed seed fund assistance of Rs. 10,00,000/- (in words, Rupees Ten
lakhs only). Dummy Organisation Foundation has agreed to provide a seed assistance in form
of Compulsorily convertible debt ( CCD) in multiple tranches as per terms of this Agreement
amounting to the total of INR 10,00,000/- (in words, Rupees Ten Lakhs Only) ( for a maximum
period of 36 months) from the date of disbursement of funds. The conversion of this
instrument into equity will be governed by Terms and Conditions laid herein.
1.1
ARTICLE-I: INTERPRETATION
In this Agreement, unless the context otherwise requires
(a) the words importing singular shall include plural and vice versa and the words
denoting natural persons shall where the context admits include firms, companies,
corporations, associations, organisations, or other entities (whether or not having
a separate entity).
(b) the headings are for convenience or reference only and shall not be used in and
shall not affect the construction or interpretation of this agreement.
(c) the words "include" and including" are to be constructed without limitation. (d)
reference to this agreement or to any other agreement or deed or other instrument
shall be constructed as a reference to such agreement, deed, or other instrument as the
2
4. ARTICLE-II: AGREEMENT AND TERMS OF CONVERSION OF LOANS
same may from time to time be amended, varied, supplemented or innovated.
Aims & Objectives: The detailed aims and objectives to be executed by the aforesaid
are as per the detailed Project document, submitted including revisions/ modifications
therein (hereinafter called as “Project”) and appended herein as Schedule-2.
Project Cost and Contribution: The project’s estimated cost is Rs 10 Lakhs. The
details of which are provided in Schedule 3.
2.2 INTEREST
2.1 AMOUNT OF SEED FINANCIAL ASSISTANCE
The Assistance shall be provided to the Company in Tranches in the following manner:
Tranche 2 Rs 5,00,000/- [ Rupees Five Lakhs only] upon COMPANY fulfilling the Milestone
1 mentioned in Annexure I.
Tranche 1 Rs 5,00,000/- [ Rupees Five Lakhs only] on or before the Closing Date or the Long
Stop Date, and subject to fulfilment of Conditions Precedent as prescribed in this Agreement.
COMPANY agrees and undertakes that the entire amount of Assistance provided by the Dummy
Organisation Foundation to COMPANY shall be used only for the purpose of scaling the
business of the Company and expanding the revenue.
The first tranche will be released after execution of the Agreement to the designated bank
account of the start-up as mentioned in Schedule- 1 subject to fulfilment of the terms and
conditions by the relevant Parties as referred herein below:
a. The Seed Assistance shall carry an interest rate of 5.0% p.a payable from the date of
receipt of respective disbursement of Tranches of CCD. The interest payment shall be
continued till the time the CCD is fully repaid or converted into Equity Shares as set out
3
5. 2.4 VALUATION
2.3 CONVERSION TIMELINES
in terms and conditions of this Agreement,
b. It is agreed that Dummy Organisation Foundation shall be entitled to the discounted price
mark down from the latest valuation of the Company either by the Registered Valuer in
accordance with the Provisions of Companies Act 2013 and Income Tax Act 1961 or any other
allied governing laws and rules or the valuation adopted in the last round of fund
raising as per the terms below:.
a. The Parties agree that the conversion of CCD into Equity Shares shall be in accordance with
the principles and the provisions of all applicable acts in India governing such conversions
including specifically related to Start-ups companies.
a. The Parties agree that the investment/ Assistance may be converted into equity shares
expressed through a written communication.
b. Notwithstanding anything contained in any document or statement, the financial assistance
shall be converted into equity stake, as specified by Dummy Organisation Foundation, as
per the agreed valuation mentioned in clause 2.4, and as per provisions of the Companies
Act 2013.
c. In case, upon conversion of Assistance amount, the equity shares to be issued to Dummy
Organisation Foundation is a fractional number, then the number of equity shares to be
issued to Dummy Organisation Foundation shall be rounded off to the next whole number.
d. Subject to the rights granted to Dummy Organisation Foundation under this Agreement, the
Equity shares so issued and allotted to Dummy Organisation Foundation shall fully paid up
and carry all rights and entitlement pari passu with the other equity shares of COMPANY
existing on the date of conversion / allotment.
e. The number of equity shares issued on conversion of financial Assistance amount and the
price per share of such equity shares shall be appropriately adjusted for corporate actions
such as bonus issue, rights issue, stock split, merger, demerger, transfer of undertaking, sale
of a business division, or any such capital or corporate restructuring.
f. COMPANY agrees to file the necessary records with the Registrar of Companies and ensure
all compliance with respect to the conversion of such financial assistance into equity
shares.
If the company raises capital any time before expiry of the first anniversary from the
4
6. If the company raises capital any time after expiry of first anniversary but before
expiry of second anniversary from the disbursement of first tranche of financial
assistance, discount price of 50 % marked down from the latest valuation of the
company.
disbursement of the first tranche of financial assistance, the discount price of 40
% marked down from the latest valuation of the company.
3.1 Jurisdiction
3.2 Severability
3.3 Counterparts
ARTICLE-III: MISCELLANEOUS CLAUSES
This Agreement shall be executed in two counterparts each of which shall be deemed to be
original but shall together constitute one Agreement only.
If for any reason whatsoever any provision of this Agreement is or becomes invalid, illegal or
unenforceable or is declared by any court of competent jurisdiction or any other instrumentality to
be invalid. Illegal or unenforceable, the validity, legality or enforceability of the remaining
provisions should not be affected in any manner.
If the company will not be able to raise funds, after the second anniversary from the
disbursement of the first tranche of financial assistance, the valuation of Rs 5 Cr. ( Five
Crores only) will be considered for conversion of financial assistance into equity shares.
Disputes, if any, shall be amicably resolved between Parties within 30 days of initiation, upon
expiry ofwhichperioddisputesshallbereferredtoanarbitratormutuallyappointedbythe Parties.
ArbitrationshallbeconductedaspertheArbitrationandConciliationAct,1996.Seatof Arbitration shall
be at New Delhi. Subject to arbitration as stated, courts of New Delhi shall have exclusive
jurisdiction.
5
7. 3.4 Voting Rights
3.7 Right of Pre-emption
3.6 Restriction on Founders shares
All shares held by each founder will be subject to restricts (“Restricted Shares”) starting from
the closing date till such time the Dummy Organisation Foundation’s converted shares are
provided an exit or written permission from Dummy Organisation Foundation permitting the
founders to transfer their shares subject to and right of first refusal or tag along right or Drag
Along Rights.
3.5 Reserve Matters
The Company will not without the Dummy Organisation Foundation shareholders meeting or by
amendment, merger, consolidation, or otherwise decide on the Reserved Matters
(i) Liquidate, dissolve or wind-up the affairs of the company or effect any liquidation
Event.
(ii) Amend, alter or repeal any provision of the Company's Charter Documents in any manner
(iii) Create or authorize the creation of or issue any other security convertible into or
exercisable for any equity security having rights, preferences or privileges senior to the
seed shares
(iv) Purchase or redeem or pay any dividend on any capital stock prior to the converted
shares or
(v) Create or authorize the creation of any debt security
(vi) Major decision such as mergers, acquisitions, capital restructuring, raising loans other
than normal working capital/term loan, deciding/changing accounting policies, setting
up subsidiaries of the company
(vii) Transacting with related parties such as directors, shareholders and joint venture
companies.
(viii) Borrowing money or guaranteeing the obligations of third parties.
(ix) Leveraging, assigning, and selling of any intellectual properties of the Company.
The Investor shall have a pro rata right to participate in any future issue of shares by the company
and to retain their shareholding on a fully diluted basis in the company and the same terms and
conditions (including price) as offered to the other shareholders/party(s).
Each Shareholder (including founders) shall have voting rights in respect of all the shares held by
them, whether or not classified as released shares (shares on which restriction on founders shares
point below is applicable). The voting rights of the shareholders shall be as defined in Companies
drawn from point of Type of instrument above.
6
8. 3.9 Tag-Along Right
3.10 Drag Along Rights
3.8 Right of first Refusal
There will be no restriction on the ability of the Investor to transfer all or any of the converted
equity shares, except the restriction that the transfer to a third party may proceed only if a simple
majority of shareholders of the company agree in writing about the moral character of the
proposed transferee/purchaser. If such approval is not received within ten (10) days, it shall be
deemed as olders.
For example, if the company has a total of 10 shareholders in all, a simple majority shall mean 6
shareholders. Such majority approval may be evidenced in writing via letters or emails and not
necessarily through a meeting of shareholders.
Subject to the promoter lock in, in the event any of the promoter or any other shareholders intend
such - at the same price as they have offered to the third party. The Non-selling shareholders at
theirsole discretionshallhavetherighttopurchasesharesinproportiontotheirinter shareholding in
the company.
In the event no exit has been provided to the Investors as envisaged in this Agreement and/or the
Company has not bought back the Buy Back Shares, the Investors will have the unilateral right to
sell their Shares to any third party. If such third party requires additional Shares in the Company
then the investors (“Dragging Shareholder”), should the parties that cumulatively hold more than
75% oftheaggregateshareholdingoftheInvestorsconsenttosuchdrag-along,shallhavetheright to drag
along and require the Founders and other stakeholders of the company the “Dragged
Shareholders”, to either: (a) sell all or part of their respective shares (“Drag Along Shares”) along
with the Shares of the
3.11 Transfer by Investor
Where a founder proposes to sell any of his shares in the company to a third party and the
investors do not exercise their right of first refusal, the Investor shall at his option and in lieu of the
Right of first Refusal have a pro-Tag-Along Right to their shareholding percentage, in the transfer
on the same terms as specified in the transfer notice. It is hereby clarified that any transfer of
shares by the Investor shall not be subject to any tag along rights.
7
9. 3.15 Reports
3.13 Exit to Investor
3.14 Valuation Protection
Post conversion of financial Assistance into equity shares, If the company offers any securities to
any third party at a later date including any advisory/sweat equity or allotment of any equity for
consideration other than in cash, whether or not an independent valuation has been done for the
allotment of such equity at a valuation lower than the valuation paid by the Dummy Organisation
Foundation, the company will issue to Investor additional shares either at no additional cost to the
seed investor or such lowest possible price at which the share may be issued as per the applicable
law in order to equate the adjusted cost per share of the subscription amount to the price to be
paid by the new offeree.
The Company and the founders agree to work towards creating liquidity for the repayment of
financial Assistance (if required) either by way of a strategic sale, share by back or other
liquidation event that is applicable to the seed Investor.
3.12 Liquidation preference
In addition to the differential rights as mentioned in the type of instrument point above the
following shall accrue.
In the event of any liquidation, dissolution or winding up of the company the surplus if any
remaining shall be applied in the following order of priority First Seed investor shall be entitled to
receive in the financial Assistance amount. Second, the balance amount, if any, shall be distributed,
subject to applicable law, pro rata among all the shareholders, including the seed investors of the
company. If the consideration consists of cash and shares of any other entity the seed investor shall
have the option to acquire cash or shares in such proportion as they may deem fit “Liquidation
event” and will include all liquidation circumstances under which the investors exit except for an
IPO.
(a) Investor will finalize the reporting requirements and frequency in discussion with company and
to the satisfaction of the Investor Company shall also submit the 'Interim Progress Update(s)' and
'Utilisation Certificate(s)' to the Investor in the format as required by the Company, before the
initiation of Tranche - Il under this Agreement.
8
10. For the purpose of preparing the 'Interim Progress Update(s)' and the 'Final Report' the
Company shall track and record the following, on a need to know basis:
(b) The Company shall also submit a 'Final Report and 'Audited Utilisation Certificate' post
conversion of the financial Assistance in terms of this Agreement. In the event of failure to
repay the financial Assistance and consequent conversion into equity shares, the promoters
and the Company shall share their learnings and the reasons for failure in their 'Final
Report' and submit it along with the 'Utilization Certificate' for financial Assistance utilized.
3.17 Other covenants
3.16 Inspection & Information Rights
1. Progress of proof of concept
2. Progress of prototype development
3. Progress of product development
4. Progress of field trials
5. Progress of market launch
6. Quantum of loan, angel or VC funding raised
7. Jobs created by startup
8. Turnover of startup
9. Any other appropriate parameter
a) The company shall modify the memorandum and articles of association with
Investors shall have a right to reasonable inspection of regular books of accounts including but not
limited to inspection of any financial record, statement, memorandum record, financial statements,
statutory filings and all other reports excluding confidential documents having bearing on the
valuation of the company.
9
11. 3.20 Expenses
3.21 Confidentiality
3.18 Indemnification
Startup Sprouts Ventures
3.19 Closing, Closing date & Long Stop Date
SIGNED AND DELIVERED by the within named
Expenses for diligence and closing to be borne by the Investor.
The terms and conditions of this terms sheet and the investors financing shall be confidential
information and the company or founders shall not disclose the same to any third party unless
approved in writing by the investors.
IN WITNESS WHEREOF the parties have executed these presents at the place, day, month and
year as first above written in the presence of the under noted witnesses.
The Company will indemnify the Investor to the fullest extent permissible by law against all losses
and damages suffered or incurred (including reasonable attorney fee) jointly and severally, arising
out the acts exclusively by the founders of the company only.
notification/information to the Investor, to retain the present Agreement.
b) The Investor shall receive standard information including audited financial reports,
unaudited quarterly financial reports, annual budget and business plan, board packages as
well as standard audit/inspection rights. All other information which the investors may
reasonably require will be provided by the company within 15 days of receipt of notice
requesting such information.
c) Standard financial reports shall be sent to the investors on the board on quarterly basis.
The parties will work towards achieving completion of the investment ("Closing") by [•] (the
"Closing Date"). Actual closing shall be achieved by [•] ("Long Stop Date"), however it will be
subject to satisfaction of customary closing conditions including successful and satisfactory
completion of Due Diligence by the Investor and the conditions precedent as specified by the
Investor
("Conditions precedent"). In any event the closing date will be no later than 7 days from the
satisfaction or waiver by the Investor of all conditions precedent.
10
12. Witness 1:
Witness 2:
______________________________________
Authorised signatory
Director: Kiran Dalal
Dummy Organisation Foundation
_________________________
Authorised signatory
Director: Aman Mehta
SIGNED AND DELIVERED by the within named
Name, Designation, Address
Name, Designation, Address
11