[On Headed Notepaper of Law Firm] February 24, 2024

Privileged and Confidential

LEGAL OPINION

To: The Board of Directors,

Chill on the Hill Private Limited

[24 February 2024]

Sub: Legal Opinion in re the acquisition of 66% shares in Jumble Mumble Private Limited
by Chill on the Hill Private Limited

Dear Sir/Ma’am,

1 BACKGROUND

1.1. We are [lawfirm] practising and qualified to practise in the Republic of India and to advise on
the law of India. We have been solicited to furnish an expert opinion to Chill on the Hill Pvt.
Ltd. (hereinafter referred to as the “Company”), a corporate entity established and recognised
in accordance with the Indian Companies Act, 2013. This request pertains specifically to the
Company's intended purchase of a 66% equity stake in Jumble Mumble Private Limited
(referred to as the “Target Company”), a transaction to be executed through the acquisition of
shares from Summer Usher Private Limited (hereafter “Seller”), in exchange for an agreed sum
(“Proposed Transaction”).

1.2. Family Fizz Private Limited (hereafter referred to as "the Parent Company") maintains a
majority shareholding of 56% in the Company. The ownership composition of the Parent
Company is as follows: (i) Cool Bros UK, a private entity incorporated in the United

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Kingdom, holds 18% of the shares on a fully diluted basis; (ii) Mihir Shrivastava possesses a
52% stake; (iii) Urvashi Master, a co-founder, owns 20%; and (iv) 10% of the shares are held by
employees through the exercise of stock options.

1.3. The Target Company’s share distribution is comprised of (i) a 66% stake held by the Seller; (ii)
a 24% ownership by Dark Knight Capital, a private equity fund based in Singapore; and (iii)
Ashish Master, who also owns a 56% interest in Summer Usher, holds 10% of the shares.

1.4. Any capitalised terms mentioned herein without explicit definitions are intended to be
interpreted in accordance with the context they are used in or as the circumstances may
necessitate.

2. Indian Law

This legal opinion is expressly confined to the application and interpretation of Indian law by
the courts and regulatory bodies within India as it stands published and effective on the date
this opinion is rendered. It is premised on the understanding that all aspects concerning it are
subject to, and will be interpreted in light of, Indian law. It should be noted that any
subsequent amendments or retroactive modifications to Indian law could potentially impact
our conclusions' validity.

3. Scope

In addressing the matters requested by the Company, we have focused our examination on
two primary areas of inquiry:

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3.1. The structural framework proposed for acquiring shares in the Target Company, detailing the
procedural and strategic considerations for effectuating the share transfer.

3.2. A comprehensive analysis of the principal regulatory and legal risks associated with the
Proposed Transaction, including potential liabilities, compliance requirements, and other
pertinent legal considerations.

4. Assumptions

For the purpose of this opinion, we have predicated our analysis on several key assumptions
regarding the Proposed Transaction:

4.1. Negotiations concerning the structure of the consideration and its corresponding payment by
the involved parties have not yet commenced.

4.2. Both the Company and the Seller are recognised as listed entities in India, in accordance with
the stipulations of the Indian Companies Act, 2013.

4.3. The assets and turnover of both the Company and the Target Company surpass the threshold
limits set forth under Section 5 of the Indian Competition Act, 2002, thereby necessitating a
comprehensive assessment of compliance and regulatory implications under this legislation.

5. Opinion
Based on the queries enumerated in paragraph 3 and the assumptions in paragraph 4 subject to
the qualifications in paragraph 6 and to any matters not disclosed to us, we are of the opinion
that:
5.1. Term Sheet

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As a preliminary step, we advise that post the initial discussions, the Company, Target
Company, and the Seller execute a term sheet. This document will set forth the foundational
terms and conditions governing the negotiation process. The term sheet will incorporate the
following binding clauses:
5.1.1. Information Accessibility/ Availability
This clause shall mandate the Target Company and the Seller to furnish all necessary
documentation and information, enabling the Company and its advisors to undertake a
comprehensive due diligence review. The required information includes but is not limited to
financial records, strategic operational plans, licensing agreements, and other relevant data.
5.1.2. Exclusivity
This clause shall bind the Seller to refrain from initiating or continuing discussions or entering
into agreements regarding the sale of the Target Company’s shares with any third parties
throughout the negotiation period. This shall help ensure focused and dedicated negotiation
efforts from both sides.
5.1.3. Non-Disclosure Agreement
A non-disclosure agreement binding all parties will be instituted, prohibiting the sharing of
any confidential information exchanged during the negotiations for the Proposed Transaction.
5.1.4. Negotiation Termination and Break Fee
This provision will detail the negotiation period and stipulate the conditions under which
either party can terminate the term sheet. It will also define any financial liabilities incurred by
a party opting to exit the negotiations ahead of schedule.
5.1.5. Operational Conduct During Negotiations
To safeguard the Company's interest and ensure the operational continuity of the Target
Company, this clause will restrict the Seller from making any significant operational or

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managerial decisions that could adversely affect the Target Company during the negotiation
window.
5.2. Beyond these binding provisions, the term sheet will also feature various non-binding clauses
that will outline the proposed structure of the deal, pricing and payment modalities, the
necessity for approvals from third parties and regulatory bodies, clauses on non-solicitation
and non-compete, along with representations, warranties, indemnities, and provisions
regarding stake accumulation.
5.3. Share Purchase Agreement Execution
Upon successful negotiations, the parties will proceed to execute a Share Purchase Agreement
("SPA"), which will act as the primary document governing the terms and conditions of the
Proposed Transaction. It shall cover all aspects of the Proposed Transaction, pre-execution,
execution, and post-execution phases, outlining the essential terms, conditions, rights, and
responsibilities of both the Company and the Seller involved in the transaction.

5.4. Valuation Methods for the Target Company

To accurately assess the value of the Target Company's shares being acquired, it is proposed to
employ several valuation techniques, including:

5.4.1. Discounted Cash Flow Analysis: This method will estimate the Target Company's share value
based on projected future cash flows, providing a present value estimation.

5.4.2. Comparative Price-Earnings Ratio: By comparing the Target Company with similar entities
within the same sector, this approach will help ascertain the market value of its shares.

5.5. Purchase Price Adjustment

Considering the anticipated duration of negotiations and SPA formulation, incorporating a

closing accounts price adjustment mechanism is advisable. This aims to adjust the initial

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purchase price to reflect the Target Company's actual value at the time of closing, based on the
latest audited financial statements. This adjustment aligns the purchase price with the real-time
financial standing of the Target Company.

It further ensures the transaction's compliance with Rule 21 under the Foreign Exchange
Management (Non-Debt Instruments) Rules, 2019.

5.6. Consideration Structure for the Transaction

The Proposed Transaction's payment structure is recommended to be segmented into four

components, ensuring a balanced consideration for the acquisition. The purchase price for the
shares (“Purchase Price”) shall be an amount equal to the aggregate of the following
amounts:

5.6.1. Initial Purchase Price: It is recommended that an initial payment, amounting to 50% of the
Target Company's preliminary valuation, be made directly to the Seller upon the transaction's
closure, providing a clear and immediate transfer of value.

5.6.2. Escrow Payment: The subsequent 50% of the initial valuation is proposed to be allocated to
an escrow account by the purchasing Company, securing the funds while allowing for
adjustments based on the final valuation.

5.6.3. Deferred Purchase Price: Following the outlined purchase price adjustment referred to in
para 5.5., any increase in the Target Company's valuation will necessitate additional payments
from the escrow account to the Seller on a direct, rupee-for-rupee basis. Conversely, a decrease
in valuation will require reimbursements to the purchasing Company, ensuring that the final
transaction value accurately reflects the Target Company's financial status at completion.

5.6.4. Earn-Out Provision: The final stage of payment consideration involves an earn-out strategy,

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where the remaining balance is paid out in instalments, contingent upon the Target Company
achieving predetermined financial or operational milestones. This ensures ongoing investment
in the Target Company's success and aligns the interests of both parties towards achieving
long-term growth and profitability targets.

5.7. Benefits of the Recommended Payment Structure

The four-tiered payment strategy presents multiple benefits for the transaction:

5.7.1. Fair Pricing Assurance: The structured approach guarantees that the payment reflects the
fair market value of the Target Company at the transaction's closing. This safeguards against
overvaluation or undervaluation, ensuring an equitable financial exchange based on the most
current valuation.

5.7.2. Equitable Business Conduct: By incorporating mechanisms such as escrow and deferred
payments, both the Company and the Seller are motivated to maintain ethical business
practices throughout the transaction period. This arrangement discourages premature profit
extractions, ensuring that the business operations remain focused on sustainable growth and
stability.

5.7.3. Expertise Retention: The earn-out component incentivises the existing management team
and key personnel to continue contributing to the business, aligning their efforts with the
future success and recovery of the business post-pandemic. This ensures the continuity of the
Target Company's strategic direction and operational expertise.

5.8. Ensuring No Material Adverse Changes

It is critical to verify that the Target Company has maintained its contractual obligations and
business operations without any material adverse changes since the SPA's signing. This
includes ensuring the integrity of major sales and supply agreements, which are fundamental to

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the company's revenue. Such diligence helps protect the transaction's value and the share price
from any unforeseen negative impacts.

5.9. Comprehensive Representations and Warranties

Securing detailed representations and warranties from the Seller and the Target Company is
essential for mitigating risks, including but not limited to:

5.9.1. Ownership and Authority: Confirmation that the Seller is the legitimate owner of the
shares, free from liens or encumbrances, and that both the Seller and the Target Company
possess the authority to enter and bind the agreement.

5.9.2. Legal and Financial Standing: Assurance that no legal or financial proceedings (including
insolvency or bankruptcy) are pending or likely to be instituted that could affect the
transaction.

5.9.3. Regulatory Compliance: Verification that all necessary taxes, licenses, and regulatory
approvals have been obtained and that the Target Company complies with applicable laws.

5.9.4. Disclosure of Liabilities: An affirmation that there are no undisclosed liabilities.

5.10. Indemnification and Risk Mitigation

To further safeguard the Company's interests, it's imperative to secure robust indemnification
clauses, including:

5.10.1. Non-Reliance Clause: This stipulates that the transaction is based solely on the
representations made by the Seller, ensuring a clear framework for liability.

5.10.2. Tipping Basket Mechanism: The Company can claim losses from the first instance,
providing immediate recourse for any financial discrepancies.

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5.10.3. Extended Duration for Claims: Ensuring the indemnification terms cover a long-term
period allows for the discovery and rectification of potential issues that may arise after the
transaction's completion.

5.10.4. Exclusion of Overwhelming Liabilities: Setting a cap on indemnification, except in cases of

fraud or environmental liabilities, protects the Company from disproportionate risk exposure.

5.10.5. Sandbagging Provision: This clause protects the Company's right to indemnification, even
if the issue was known before the transaction, reinforcing the security against potential post-
transactional disputes.

5.11. Compliance with Foreign Investment Regulations

The Proposed Transaction is subject to the Foreign Exchange Management (Non-Debt

Instrument) Rules, 2019 ("NDI Rules"), particularly being classified as a 'Downstream
Investment' due to the significant control Cool Bros, a foreign entity, holds over the Parent
Company. To align with these regulations, the transaction must adhere to the following
criteria:

5.11.1. Board and Shareholder Approval: The transaction must receive the green light from the
Company’s Board of Directors and be within the bounds of the shareholder's agreement.

5.11.2. Source of Funds: The investment capital must originate from foreign sources, with domestic
funds being excluded unless derived from the Company's internal accruals.

5.11.3. Compliance Certification: As per NDI Rules, the Company, being a first-level Indian
entity, is tasked with ensuring compliance for any downstream investments. This requires
obtaining an annual compliance certificate from a statutory auditor and incorporating this

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compliance status in the Director’s report within the Annual Report.

5.12. Payment Modalities and Reporting

The Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt

Instruments) Regulations, 2019 requires the Company to file Form DI as well as notify the
Secretariat for Industrial Assistance (SIA), Department for Promotion of Industry
and Internal Trade regarding the execution of the Proposed Transaction.

5.13. Navigating Antitrust Regulations for the Transaction

As both the Company and the Target Company operate in the beverages industry, potential
Antitrust concerns need to be addressed pre-emptively. The Proposed Transaction invokes
Section 5 of the Competition Act, suggesting the formation of a ‘combination’ that
necessitates the approval of the Competition Commission of India (CCI). To comply, the
Company must notify the CCI of the particulars of the potentially formed combination,
within thirty days from the execution of the SPA and receive a favourable order.

5.14. Taxation Concerns

Tax Deduction at Source (TDS) compliance is monitored by the Indian Revenue Service
officials with utmost diligence. The Company is required to deduct and withhold the requisite
tax amount from the consideration payable to Seller, deposit it with the Indian tax authorities,
and be in compliance with multiple obligations, including but not limited to, obtaining a Tax
Deduction Account Number, filing a withholding tax return, and providing a withholding tax
certificate to the Seller for them to be able to recieve tax credit. Additionally, the Tax losses, if
any, of the Company can be carried-forward to reduce future tax liability.

5.15. Stamp Duty Liability

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The Company is liable to pay 0.5% of the total valuation of the SPA as stamp duty on the
execution of the SPA.

5.16. Due Diligence on Licenses and Insurance

The Company's due diligence extends to the examination of the transferability and terms of
existing licenses and insurance policies. This process entails:

5.16.1. Reviewing documents and agreements to ascertain if the Target Company's licenses and the
coverage from insurance policies are transferable with the sale of securities.

5.16.2. Evaluating the terms, including the remaining validity period and renewal requirements for
licenses, and assessing the adequacy, transferability, and expiry of the insurance coverage
provided by the Seller.

6. Qualifications

This opinion is subject to the following qualifications:

6.1. The percentage division as per Para 5.5. for the payment of the consideration merely indicates
market practice and the industry trend generally seen in the beverages industry. The same is
subject to revision as per negotiations between the parties.

6.2. This opinion is subject to any limitations arising from accounting or banking principles,
bankruptcy, insolvency, liquidation, moratorium, reorganisation and other laws of general
application relating to or affecting the financing of the Proposed Transaction.

6.3. The mechanisms for determining pricing and valuation are indicative and not exhaustive and
will have to be corroborated by the Company based on factual evidence, along with the nature
and circumstances of the transaction. For the same, the assistance of independent financial and

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accounting consultants must be undertaken by the Company.

6.4. We have conducted no due diligence on the Company, the Parent Company, the Target
Company, the Seller, or any other parties involved in the Proposed Transaction and have made
no search of any public records regarding the past practices or transactions entered into by any
parties involved in the Proposed Transaction.

6.5. No opinion is expressed on any matters of fact.

7. Reliance

7.1. This opinion is solely for the benefit and use of the Company and its successors and assigns
and solely for the purpose of assessing and entering into an agreement for the Proposed
Transaction and may only be relied upon by the addressees to this opinion.

7.2. A copy of this opinion may be provided only to:

7.2.1. your professional advisers, officers, employees and auditors;

7.2.2. any person to whom disclosure is required to be made by applicable law or court order or
pursuant to the rules or regulations of any supervisory or regulatory body or in connection
with any judicial proceedings;

7.2.3. on the basis that (i) such disclosure is made solely to enable any such person to be informed
that a letter has been given and to be made aware of its terms but not for the purpose of
reliance, and (ii) such person to whom a copy of this opinion is disclosed agrees not to further
disclose it or its content to any other person or quote or refer to in any public document or file
with anyone without our prior written consent.

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7.3. Except as provided in paragraphs 7.1 and 7.2 above, this opinion is not to be transmitted to
anyone, nor is it to be relied upon by anyone or for any other purpose or quoted or referred to
in any public document or filed with anyone without our written consent. We accept no
responsibility or legal liability to any person other than the parties referred to in paragraph 7.1
above in relation to the contents of this opinion.

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