-------------------------------------------------- NON-BINDING VC TERM SHEET — DRAFT FOR ATTORNEY REVIEW ONLY — NOT LEGAL, FINANCIAL, INVESTMENT, OR TAX ADVICE This document is a structured preparation draft only. This term sheet is NON-BINDING except for the Exclusivity and Confidentiality provisions and does not obligate any party to complete the proposed transaction. SEBI regulations and Companies Act 2013 compliance for Series A preferred share issuance, applicable FEMA provisions, income tax treatment under Section 56(2)(viib) of the Income Tax Act 1961, Maharashtra Stamp Act stamp duty, and investor accreditation requirements must be confirmed with a qualified Indian VC attorney and tax advisor before this term sheet is signed or shared. -------------------------------------------------- VENTURE CAPITAL TERM SHEET — NON-BINDING — DRAFT FOR ATTORNEY REVIEW Document Ref: VCT-2026-001 Date: June 1 2026 LEAD INVESTOR: Sequoia India Advisors Pvt Ltd Mumbai Maharashtra India Email: [lead investor email] COMPANY: SkyTech Innovations Pvt Ltd Mumbai Maharashtra India CEO: Arjun Kapoor CTO: Priya Sharma Email: [company email] ⚠️ NON-BINDING NOTICE: Except for the Exclusivity and Confidentiality provisions this document is NOT legally binding and does NOT obligate any party to complete the proposed transaction. 1. TRANSACTION OVERVIEW Sequoia India Advisors Pvt Ltd proposes to lead a Series A financing round in SkyTech Innovations Pvt Ltd, an early- stage B2B SaaS company based in Mumbai India. Investment Amount: INR 8,00,00,000. Pre-Money Valuation: INR 32,00,00,000. Proceeds will be deployed toward product development, enterprise sales expansion, and team growth. 2. DEFINITIONS 2.1 Lead Investor: Sequoia India Advisors Pvt Ltd. 2.2 Company: SkyTech Innovations Pvt Ltd. 2.3 Round Amount: INR 8,00,00,000. 2.4 Pre-Money Valuation: INR 32,00,00,000. 2.5 Post-Money Valuation: INR 40,00,00,000. 2.6 Series A Preferred: Series A Preference Shares issued to investors in this round as described in Section 5. 2.7 Liquidation Preference: 1x non- participating as described in Section 6. 2.8 Option Pool Shuffle: The creation of the employee option pool pre-investment which dilutes founders rather than investors as described in Section 4. 2.9 Pay-to-Play: Provision requiring investors to participate pro-rata in future rounds or face conversion of preferred rights as described in Section 9. 2.10 Drag-Along: The obligation on minority shareholders to sell on terms approved by a 75 percent majority as described in Section 16. 2.11 Co-Sale: Lead Investor's right to participate in founder share sales as described in Section 15. 2.12 Exclusivity Period: 45 days from signing as described in Section 19. 2.13 Governing Law: Laws of Maharashtra India. 3. FINANCING AMOUNT AND VALUATION 3.1 Proposed Round Amount: INR 8,00,00,000 led by Sequoia India Advisors Pvt Ltd. 3.2 Pre-Money Valuation: INR 32,00,00,000. 3.3 Post-Money Valuation: INR 40,00,00,000. 3.4 Lead Investor Ownership Post-Closing: 20 percent fully diluted including 15 percent option pool. 3.5 Option Pool: A 15 percent employee stock option pool will be created as part of this financing. The option pool is created pre-investment on a post-money basis. 3.6 Option Pool Shuffle Explained: The 15 percent option pool is carved from the pre-money cap table. This means founders are diluted by the option pool before the Investor's investment is calculated. In practice this reduces the effective pre-money valuation for founders. Note: This mechanics must be modeled and confirmed with a qualified attorney and financial advisor. 4. SECURITIES 4.1 Sequoia India Advisors Pvt Ltd will receive Series A Preference Shares in SkyTech Innovations Pvt Ltd. 4.2 Series A Preference Shares carry: 1. 1x non-participating liquidation preference as described in Section 6. 2. Conversion to ordinary shares at 1:1 ratio adjustable for anti- dilution. 3. Voting rights on an as-converted basis. 4. Non-cumulative dividend right pari passu with ordinary shares. 4.3 Note: The structure of Series A Preference Shares in an Indian private limited company must comply with the Companies Act 2013 and SEBI regulations. A qualified Indian VC attorney must confirm before any shares are issued. 5. LIQUIDATION PREFERENCE AND PARTICIPATION 5.1 Sequoia India Advisors Pvt Ltd receives a 1x non-participating liquidation preference. 5.2 Plain Language Liquidation Waterfall: On any exit acquisition or winding-up: Step 1: Sequoia India Advisors Pvt Ltd receives INR 8,00,00,000 being the full 1x investment back. Step 2: All remaining proceeds are distributed to ordinary shareholders including founders pro-rata. Step 3: At a high enough exit value Sequoia India Advisors Pvt Ltd may choose to convert to ordinary shares if its pro-rata share of total proceeds exceeds the 1x preference amount. 5.3 Note: Liquidation preference economics are among the most significant terms in any VC investment. This must be modeled with a qualified financial advisor and attorney. 6. ANTI-DILUTION PROTECTION 6.1 Series A Preference Shares carry broad- based weighted average anti-dilution. 6.2 In plain language: If SkyTech Innovations Pvt Ltd issues new shares in a future round at a price below INR per share implied by the INR 32,00,00,000 pre-money valuation, the conversion ratio of the Series A Preference Shares is adjusted to give more ordinary shares on conversion. The broad-based formula includes all outstanding shares and the option pool in the weighted average calculation, making it less aggressive than a full ratchet or narrow-based formula. 6.3 The Three Mechanisms in Plain Language: Full Ratchet: Most aggressive. Converts as if the investor had paid the lower price. Rarely used in Indian market. Broad-Based Weighted Average: Standard market practice. Adjusts partially. Narrow-Based: Less common. Adjusts more than broad-based. 6.4 Note: Anti-dilution provisions under Companies Act 2013 must be confirmed with a qualified attorney. 7. DIVIDENDS 7.1 Series A Preference Shares carry a non-cumulative dividend right payable only when declared by the board, pari passu with ordinary shareholders on an as-converted basis. 7.2 In plain language: No dividend accumulates if not paid. The Investor receives dividends only if the board declares them, which is unusual for early-stage companies. 8. PAY-TO-PLAY 8.1 Pay-to-play applies in this round. Any investor who fails to participate at their pro-rata share in a future qualifying financing round will have their Series A Preference Shares converted to ordinary shares and will lose their anti-dilution, protective provision, and other preferred rights. 8.2 Plain Language: Pay-to-play incentivizes existing investors to continue supporting the Company in future rounds. Investors who do not participate lose their economic protections. This helps the Company raise future rounds without holdout investors blocking terms. 8.3 Note: Pay-to-play mechanisms under Companies Act 2013 must be confirmed with a qualified attorney. 9. BOARD COMPOSITION 9.1 Post-Closing board of SkyTech Innovations Pvt Ltd: 1. 2 directors appointed by Sequoia India Advisors Pvt Ltd. 2. 2 founder directors: Arjun Kapoor and Priya Sharma. 3. 1 mutually agreed independent director. Total: 5 board seats. 9.2 Co-investors above 5 percent ownership receive board observer rights. 9.3 Each party appoints and removes its nominees by written notice. 9.4 Note: Board composition under Companies Act 2013 including independent director requirements must be confirmed with a qualified attorney. 10. INFORMATION RIGHTS AND MANAGEMENT RIGHTS 10.1 Sequoia India Advisors Pvt Ltd will receive: 1. Monthly management accounts within 10 business days of each month end. 2. Quarterly financial statements within 21 days of each quarter end. 3. Annual audited accounts within 90 days of financial year end. 4. Annual budget and financial projections approved by the board. 5. Prompt notice of any material event. 6. Inspection rights with 10 business days written notice. 10.2 Sequoia India Advisors Pvt Ltd will receive a management rights letter entitling it to consult with management on the Company's business and affairs. 10.3 Note: Management rights letters in India should be confirmed with a qualified attorney for their applicability and legal effect. 11. PRO-RATA RIGHT 11.1 All investors holding more than 5 percent of the Company's fully diluted share capital have the right to participate in future qualifying financing rounds up to their pro-rata share. 11.2 SkyTech Innovations Pvt Ltd must give all eligible investors at least 15 business days written notice before closing any qualifying future round. 12. PROTECTIVE PROVISIONS 12.1 The following corporate actions require the prior written consent of Series A Preferred shareholders voting as a separate class: 1. Any amendment to the Memorandum or Articles of Association that adversely affects Series A Preferred rights. 2. Authorization or issuance of shares senior to or pari passu with Series A Preference Shares. 3. Any merger, acquisition, restructuring, or sale of all or substantially all assets. 4. Any dividend or distribution to shareholders. 5. Any material change in the Company's core business activity. 6. Incurring indebtedness above INR 1,00,00,000. 7. Creating any subsidiary or entering into any related-party transaction above INR 25,00,000. 8. Any liquidation, dissolution, or winding-up of the Company. 9. Any change in the number of board seats. 12.2 Note: Protective provisions must comply with Companies Act 2013 and must be incorporated into the shareholders agreement and Articles of Association. 13. RIGHT OF FIRST REFUSAL AND CO-SALE 13.1 ROFR: The Company and then Series A Preferred investors have a right of first refusal over any proposed transfer of shares by founders or other common shareholders at the proposed transfer price. The ROFR must be exercised within 21 days of written notice. 13.2 Co-Sale: If a founder proposes to sell shares to a third party and the Company and investors waive ROFR, Sequoia India Advisors Pvt Ltd has the right to sell its pro-rata share of shares to the same third party on the same terms. 14. DRAG-ALONG RIGHTS 14.1 If holders of more than 75 percent of the Company's fully diluted shares including both preferred and common shareholders approve an exit transaction, all other shareholders must sell their shares on the same terms at the same price. 14.2 Note: Drag-along provisions under Companies Act 2013 must be confirmed with a qualified attorney and reflected in the shareholders agreement and Articles of Association. 15. REGISTRATION RIGHTS 15.1 Upon a qualifying IPO Series A Preferred investors will have: 1. Demand registration rights to require registration of their shares after IPO lock-up expires. 2. Piggyback registration rights in any Company-initiated registration. 15.2 Note: Registration rights in India are primarily relevant for future IPO scenarios and their legal treatment under SEBI regulations must be confirmed with a qualified attorney. 16. FOUNDER VESTING AND OBLIGATIONS 16.1 Both founders must execute updated vesting agreements as a Closing condition confirming 4-year vesting with 1-year cliff from the Closing Date. 16.2 Double trigger full acceleration on Exit Event plus termination without cause within 12 months. 16.3 IP assignment and employment agreements with non-compete and non-solicitation must be in place at Closing. 17. EXCLUSIVITY (BINDING) 17.1 SkyTech Innovations Pvt Ltd and the Founders agree not to solicit, discuss, or accept any alternative investment or acquisition proposal for 45 days from signing. 17.2 A breach entitles Sequoia India Advisors Pvt Ltd to recover all reasonable documented transaction costs. 17.3 This exclusivity obligation IS legally binding from the date of signing. 18. CONDITIONS TO CLOSING 18.1 Closing is subject to: 1. Satisfactory legal, financial, and technical due diligence. 2. Execution of definitive documents including Share Subscription Agreement, Shareholders Agreement, and amended Articles of Association. 3. Companies Act 2013 board and shareholder approvals. 4. IP assignment and employment agreements from both founders. 5. Founder vesting agreements. 6. No material adverse change. 19. FEES AND COSTS 19.1 SkyTech Innovations Pvt Ltd will pay Sequoia India Advisors Pvt Ltd's reasonable legal costs up to INR 15,00,000 at Closing. 20. NON-BINDING NATURE 20.1 Except for the Exclusivity and Confidentiality provisions this term sheet is non-binding and creates no obligation to complete the proposed transaction. 21. GOVERNING LAW 21.1 Laws of Maharashtra India govern this term sheet. Disputes proceed through direct negotiation then binding arbitration in Mumbai. ⚠️ SIGNATURE NOTICE — NON-BINDING ⚠️ Both parties signing acknowledge that except for Exclusivity and Confidentiality this term sheet is NON-BINDING. Both parties must engage qualified Indian VC attorneys before progressing to definitive binding investment documents. Sequoia India Advisors Pvt Ltd (Lead Investor) Signature: ________________ Name: ____________________ Title: ___________________ Date: ____________________ SkyTech Innovations Pvt Ltd (Company) Signature: ________________ Name: Arjun Kapoor Title: CEO Date: ____________________ -------------------------------------------------- This Venture Capital Term Sheet draft was generated by an AI drafting tool as a structured preparation and documentation aid only. It does not constitute legal, financial, investment, or tax advice. This term sheet is typically non-binding. Always have this document reviewed by a qualified VC attorney before any party signs or any transaction progresses. --------------------------------------------------