Shareholders Agreement Template

SHAREHOLDERS AGREEMENT
BETWEEN
[●] PRIVATE LIMITED
AND
INVESTORS
AND
BUSINESS ADVISORS
AND
PROMOTERS
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applicable law.
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION 5

2. EFFECTIVE DATE 12
3. MATTERS RELATING TO THE SUBSCRIPTION OF SHARES BY INVESTORS 12
4. DIVIDENDS 15
5. CONVERSION OF THE COMPULSORILY CONVERTIBLE PREFERENCE SHARES 15
6. SHARE TRANSFERS 17
7. REDEMPTION RIGHTS AND DRAG ALONG RIGHTS 21
8. INFORMATION AND REPORTING 22
9. VISITATION AND INSPECTION RIGHTS 22
10. ANTI-DILUTION PROTECTION 23
11. BOARD OF DIRECTORS 23
12. RESERVED MATTERS 24
13. LIQUIDATION PREFERENCE 26
14. CORPORATE ACTION 27
15. EMPLOYEE STOCK OPTION PLAN (ESOP) 27
16. TERMINATION 27
17. INDEMNIFICATION 27
18. SPECIFIC PERFORMANCE 28
19. EXPENSES 29
20. ARTICLES 29
21. GOVERNING LAW AND ARBITRATION 29
22. ASSIGNABILITY 30
23. NOTICES 30
24. NON COMPETE AND NON-SOLICIT 31
25. SEVERABILITY 32
26. ENTIRE AGREEMENT 32
27. COUNTERPARTS 32
28. AMENDMENTS AND WAIVERS 32
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29. CONFIDENTIALITY 33
30. INDEPENDENT CONTRACTORS 33
31. FURTHER ASSURANCES 33
32. BREACH 33
SCHEDULE 1
LIST OF INVESTORS 47
LIST OF BUSINESS ADVISORS 47
SCHEDULE 2-CURRENT SHAREHOLDING PATTERN 48
SCHEDULE 3-PROPOSED SHAREHOLDING ON A FULLY DILUTED BASIS ON CLOSING 49
SCHEDULE 4- SUBSCRIPTION SCHEDULE 50
SCHEDULE 5 –PAYMENT INSTRUCTIONS 51
SCHEDULE 6 – REPRESENTATIONS AND WARRANTIES 52
SCHEDULE 7 - DEED OF ADHERENCE 59
SCHEDULE 8- ANTI DILUTION PROTECTION (BROAD BASED WEIGHTED AVERAGE) 60
..
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applicable law.
SHARE SUBSCRIPTION AND SHAREHOLDERS AGREEMENT
THIS SHARE SUBSCRIPTION AND SHAREHOLDERS AGREEMENT (the “Agreement”) is made

and executed on [●] day of [●] 2019.
BY & BETWEEN:
(A) [●] Private Limited, a company incorporated under the provisions of the Companies
Act, 2013,having its registered office at [●](hereinafter referred to as the “COMPANY”),
which expression shall, unless repugnant to the context or meaning thereof, be
deemed to mean and include its authorized representatives, successors-in-interest
and permitted assigns) of the FIRST PART;
(B) INVESTORS, as detailed in Schedule 1, of the SECOND PART, who shall hereinafter
where the context so permits be referred to individually as “Investor” and collectively
as “Investors”;
(C) BUSINESS ADVISORS, as detailed in Schedule 1, of the THIRD PART, who shall
hereinafter where the context so permits be referred to individually as “Business
Advisor” and collectively as “Business Advisors”;
(D) PROMOTERS, as detailed below, of the FOURTH PART:
(i) [●], aged about [●] years, residing at [●], (hereinafter referred to as “[●]”,which
expression shall, unless repugnant to the context or meaning thereof, be deemed to
mean and include his legal heirs, executors, successors and permitted assigns);
(ii) [●],aged about [●] years, residing at [●](hereinafter referred to as “[●]” which
expression shall, unless repugnant to the context or meaning thereof, be deemed to
mean and include his legal heirs, executors, successors and permitted assigns);
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applicable law.
[●] and [●] where the context so permits, shall be referred to individually as “Promoter”
and jointly as “Promoters”.
The Company, the Investors, the Business Advisors and the Promoters, are hereinafter,
where the context so permits, referred to individually as “Party” and jointly as “Parties”.
WHEREAS: -
1. The Company is in the business of [●]. (“Business”).
2. The Company is desirous of issuing and allotting and the Investors are desirous of
subscribing to Compulsorily Convertible Preference Shares in the Company in the
manner set forth in this Agreement.
3. Accordingly, the Investors have agreed to invest an aggregate amount of up to INR

[●] (Rupees [●] only), by way of subscription of Compulsorily Convertible Preference
Shares of the Company as per the terms of this Agreement to provide funds for the
growth and expansion of the Company.
4. The Company is also desirous of receiving advisory services from the Business
Advisors and in consideration of the said advisory services the Promoters have
proportionately transferred Advisor Shares (as defined below) to the Business
Advisors as captured in Schedule 2.
5. On [●] the Company issued an offer letter to the shareholders of the Company,
offering a total number of [●] ([●]) Compulsorily Convertible Preference Shares to
the shareholders of the Company on a pro rata basis to their shareholding in the
Company. The shareholders of the Company have declined the offer vide
e-mail/letter dated [●]and pursuant to which the Board has decided to issue such
Compulsorily Convertible Preference Shares by issuing them to the Investors as per
Section 62 (1)(a)(iii) of the Companies Act, 2013.
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applicable law.
6. The Parties are desirous to provide for certain of their respective rights and
obligations regarding the management of the Company and certain other rights and
obligations as set forth herein and to record their respective representations,
warranties, covenants and agreements as under.
7. The current authorized capital of the Company is Rs. [●]/-(Rupees [●] only) divided
into [●]([●]) Equity Shares of Rs.[●]/-([●]) each. The paid-up capital of the Company is
Rs.[●]/- (Rupees [●]only) divided into [●]([●]) Equity Shares of Rs.[●]/-([●]) each and
[●] ([●]) preference shares of [●] each. The shareholding pattern prior to the
consummation of the transaction herein is captured in Schedule 2.
8. The current directors of the Company are [●] and [●].
9. The pre-money valuation of the Company is INR [●]/- (Rupees [●] only).
NOW, THEREFORE, IN CONSIDERATION OF THE REPRESENTATIONS, PROMISES AND

MUTUAL COVENANTS AND AGREEMENTS SET FORTH HEREIN AND FOR OTHER GOOD
AND VALUABLE CONSIDERATION PAID HEREUNDER, THE RECEIPT AND SUFFICIENCY
OF WHICH IS HEREBY ACKNOWLEDGED, THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION

1.1. Unless otherwise defined in the Agreement, the following terms when capitalized
shall have the meaning set out as follows:
1.1.1. “Act” means the (Indian) Companies Act, 1956, to the extent applicable, and the
(Indian) Companies Act, 2013, including any amendments thereto, any statutory
replacement or re-enactment thereof, and any rules, regulations, notifications,
ordinances and clarifications made there under;
1.1.2. “Advisor Shares” means up to[●]([●]) number of Equity Shares comprising of 2.5%
(two point five percent) of the share capital of the Company (on a Fully Diluted Basis)
transferred to the Business Advisors by the Promoters as captured in Schedule 2, in
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applicable law.
consideration of advisory services;
1.1.3. “Affiliate” in relation to a Person
i. being a corporate entity, shall mean any entity or Person, which controls at least
20% (twenty percent) of the total share capital or of the business decisions under an
agreement;
ii. being an individual, any entity or Person, which is Controlled by such Person or a
Relative (the term “Relative” would have the meaning as ascribed to it under the Act)
of such individual;
iii. in any other case shall mean a Person Controlled by a Party / Parties to this
Agreement;
1.1.4. “Agreement” means this share subscription and shareholders’ agreement entered
into by the Parties, and as amended from time to time, and shall include all the
schedules, annexures and exhibits to this Agreement;
1.1.5. “Annual Operating Plan" means an annual operating budget and strategic plan
prepared by Company management each year in good faith based on reasonable
projections, that states, among other customary matters, projected sales revenue,
operating expenditure, capital expenditures, cash flow and key financial ratios for
the following year;
1.1.6. “Articles” means the articles of association of the Company and as amended from
time to time;
1.1.7. “Board” means the board of directors of the Company as constituted from time to
time;
1.1.8. “Business Day” means a day, not being a Saturday or a Sunday or a public holiday,
on which banks are open for business in India in the context of a payment being
made to or from a scheduled commercial bank in a place other than India, in such
other place;
1.1.9. “Cause” means with respect to a Promoter, the determination by the Board with the
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consent of the Investor Director that:
a) Such Promoter has acted in material breach of his duty of care or fiduciary duty
to the Company which has a Material Adverse Effect on the business of the
Company;
b) Such Promoter has committed an act of fraud, wilful misconduct, dishonesty,

gross negligence or abuse of authority including but not limited to leaking
Confidential Information of the Company, colluding with the competitors of the
Company or intentionally and materially harming the interests of the Company
or has attempted to do any of the above;
c) Such Promoter has continuously been failing to perform assigned duties even
after receiving written notification of the failure from the Company’s Board;
and/or
d) Such promoter has engaged in an act of moral turpitude or misconduct;
1.1.10. “Change in Control” shall be deemed to have occurred if the Promoters holding in
the Company falls below 51% (fifty one percent) of the share capital of the Company
on a Fully Diluted Basis by virtue of one or more Transfer(s) of the Shares held by
the Promoters;
1.1.11. “Charter Documents” mean the memorandum of association and articles of

association of the Company, including the restated articles of association, if any;
1.1.12. “Closing” shall mean completion of all processes as set out in Clause 3.4 of this
Agreement;
1.1.13. “Closing Date” shall have the meaning ascribed to such term under Clause 3.4 of
this Agreement;
1.1.14. “Compulsorily Convertible Preference Shares” or “CCPS” means fully and

Compulsorily Convertible Preference Shares with face value of INR [●]/- (Rupees [●]
only) each and at a premium of INR [●]/- (Rupees [●]only) each, to be subscribed by
the Investors, as per the terms of this Agreement and as set out against their
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respective names in Schedule 3;
1.1.15. “Conditions Precedent to Closing” shall have the meaning ascribed to such term
under Clause 3.3 of this Agreement;
1.1.16. “Conditions Subsequent to Closing” shall have the meaning ascribed to such term
under Clause 3.5 of this Agreement;
1.1.17. “Confidential Information” means all Intellectual Property Rights, oral, written
and/or tangible information relating to the business, products, affairs, performance
and finances of the Company, which for the time being is confidential, proprietary to
it and/or not generally available to the public or treated by it as such and including,
but not limited to, information relating in whole or in part to trade secrets, present
and future products, services, business plans and strategies, marketing ideas and
concepts, especially with respect to unannounced products and services, present
and future product plans, pricing, volume estimates, financial data, product
enhancement information, business plans, marketing plans, sales strategies,
customer information (including customers' applications and environments), market
testing information, development plans, specifications, customer requirements,
designs, plans or other technical and business information;
1.1.18. “Consent” means any permit, permission, license, approval, authorization, consent,
clearance, waiver, no objection certificate or other authorization of whatever nature
and by whatever name called which is required to be granted by the Government,
the creditors or any other authority or under any applicable Law;
1.1.19. “Control” (including, with its correlative meanings, the term “under common control
with”), as used with respect to any Person, means the power, direct or indirect, to
direct or cause the direction of the management and policies of such Person
whether by contract or otherwise. In any event, and without limitation of the
previous sentence, for purposes of this Agreement any Person owning 51% (fifty
one percent) or more of the voting securities of another Person shall be deemed to
control over that Person;
1.1.20. “Conversion Ratio” shall have the meaning set out in Clause 5.2;
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applicable law.
1.1.21. “Date of Conversion” shall mean the date on which the Equity Shares are allotted
to an Investor upon the exercise of his right to convert the Compulsorily Convertible
Preference Shares;
1.1.22. “Deed of Adherence” shall be the deed of adherence agreeing to be bound by the
terms of this Agreement as set forth in Schedule 8;
1.1.23. “Director” means a director on the Board of the Company, from time to time;
1.1.24. “Employees Stock Option Plan” or “ESOP” means the employee stock option plan
as formulated and approved by the Board of the Company, and applicable, inter
alia, to the employees and Directors;
1.1.25. “Encumbrance” shall mean any mortgage, pledge, equitable interest, assignment
by way of security, conditional sales contract, hypothecation, right of other Persons,
claim, security interest, encumbrance, title defect, title retention agreement, voting
trust agreement, interest, option, lien, charge, commitment, restriction or limitation
of any nature whatsoever, including restriction on use, voting rights, transfer,
receipt of income or exercise of any other attribute of ownership, right of set-off,
any arrangement (for the purpose of, or which has the effect of granting security), or
any other security interest of any kind whatsoever, or any agreement, whether
conditional or otherwise, to create any of the same;
1.1.26. “Equity Shares” means equity shares in the issued, subscribed and paid up share
capital of the Company having a face value of INR[●]/- (Rupees [●] only) each, when
issued and each having 1 (one) vote;
1.1.27. “Fair Market Value” shall be such value as an independent valuer acceptable to the
Parties shall determine in accordance with the applicable Law;
1.1.28. “Financial Year” means the financial year of the Company commencing on April 1
every calendar year and ending on 31 March of the following year, or such other
financial year of the Company as the Company may from time to time legally
designate as its financial year;
1.1.29. “Fully Diluted Basis" means that the calculation is to be made assuming that all
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outstanding convertible securities (whether or not by their terms then currently
convertible, exercisable or exchangeable), stock options, warrants, including but not
limited to any outstanding commitments to issue shares at a future date whether or
not due to the occurrence of an event or otherwise, have been so converted,
exercised or exchanged;
1.1.30. “Government” means the Government of India and includes any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of India;
1.1.31. “INR” means Indian Rupees, the national currency of the Republic of India;
1.1.32. "Intellectual Property" includes ideas, concepts, creations, discoveries, inventions,

improvements, know how, trade or business secrets, trademarks, service marks,
designs, utility models, tools, devices, models, methods, procedures, processes,
systems, principles, algorithms, works of authorship, flowcharts, drawings, books,
papers, models, sketches, formulas, teaching techniques, electronic codes,
proprietary techniques, research projects, and other confidential and proprietary
information, computer programming code, databases, software programs, data,
documents, instruction manuals, records, memoranda, notes, user guides; in either
printed or machine-readable form, whether or not copyrightable or patentable, or
any written or verbal instructions or comments;
1.1.33. “Intellectual Property Rights” include (i) all rights, title, and interest under any
statute or under common law including patent rights; copyrights including moral
rights; and any similar rights in respect of intellectual property, anywhere in the
world, whether negotiable or not; (ii) any licenses, permissions and grants in
connection therewith; (iii) applications for any of the foregoing and the right to apply
for them in any part of the world; (iv) right to obtain and hold appropriate
registrations in intellectual property and, (v) all extensions and renewals thereof (vi)
causes of action in the past, present or future, related thereto including the rights to
damages and profits, due or accrued, arising out of past, present or future
infringements or violations thereof and the right to sue for and recover the same;
1.1.34. “Key Management Team” shall mean the key managerial personnel as defined
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under the Act;
1.1.35. “Law” includes all applicable statutes, enactments, acts of legislature or parliament,
laws, ordinances, rules, bye-laws, regulations, notifications, guidelines, policies,
directions, directives and orders of any Government, statutory authority, tribunal,
board, court or recognized stock exchange and, if applicable, international treaties;
1.1.36. “Liquidation Event”shall mean the following:
i. Commencement of any proceedings for the voluntary or involuntary winding up of

the Company in accordance with the Act or the passing of an order by any court
appointing a provisional liquidator or administrator in any other proceeding
seeking the winding up of the Company; or
ii. The consummation of a consolidation, merger, reorganization or other similar

transaction (whether in one or a series of transactions) of the Company resulting in
its Shareholders, collectively, retaining less than a majority of the voting power of
the Company or the surviving entity immediately following such transaction after
giving effect to any conversion, exercise or exchange of any securities convertible
into or exercisable or exchangeable for, such voting securities; or
iii. Sale or transfer (other than in accordance with this Agreement) of more than the
then outstanding Shares such that Shareholders who held 50% (fifty percent) of
Shares of the Company prior to such transfer do not retain at least 50% (fifty per
cent) shareholding in the Company after such transfer; or
iv. Occurrence of a Change in Control; or
v. The sale of, transfer of or creation of an Encumbrance of any nature whatsoever,

on a substantial part of the assets and properties of the Company, including but
not restricted to tangible and intangible assets of the Company, or any order of any
court resulting in the sale of, transfer of or creation of an Encumbrance of any
nature whatsoever on a substantial part of the assets and properties of the
Company including but not restricted to tangible and intangible assets of the
Company (whether in one or a series of transactions), which has not been vacated
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within 15 (fifteen) days of the passing of such order by the court;
1.1.37. “Lock –in” shall have the meaning set out in Clause 6.1.1;
1.1.38. “Material Adverse Effect” shall mean the occurrence of any event, change,
circumstance or impact that individually or in the aggregate (taking into account all
other such events, changes, circumstances or effects), is or is reasonably likely to (a)
have a material adverse change to the financial conditions, properties, assets
(including intangible assets), liabilities, business, operations, results of operations or
prospects of Company, including any adverse change, event, development, or effect
arising from or relating to (i) general business or economic conditions, (ii) national or
international political or social conditions, (iii) financial, banking, or securities
markets, (iv) changes in Indian Generally Accepted Accounting Principles (“GAAP”) (v)
changes in any applicable Laws; and/or (vi) the validity, legality or enforceability of
the rights or remedies of the Investors under the Transaction Documents; or (b)
materially hinder or delay the Company’s or the Promoters’ ability to consummate
the transactions contemplated herein, or (c) materially hinder Company’s or the
Promoters’ ability to operate its business substantially in the manner previously
conducted, or (d) materially hinder the management or conduct of business of the
Company in the event that a Promoter/Key Management Team disassociates or
exits from the Company without the prior approval of the Investor Director;
1.1.39. “Memorandum” means the memorandum of association of the Company and as

amended from time to time;
1.1.40. “Person” means and includes an individual, proprietorship, partnership,

corporation, company, unincorporated organization or association, trust or other
entity, whether incorporated or not;
1.1.41. “Promoter Shares” shall mean the number of shares as held by the Promoters and
as set out against their respective names;
1.1.42. “Qualified IPO” means a duly completed initial public offering of the Equity Shares
of the Company;
1.1.43. “Registrar of Companies” or “ROC” mean the Registrar of Companies having
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jurisdiction with respect to any particular matter;
1.1.44. “Representations and Warranties” shall mean the representations and warranties
as set out in Schedule 6 of this Agreement;
1.1.45. “Requirement of Law” means, in relation to any Person, any law, statute, treaty,
rule, regulation, licence or franchise or determination of an arbitrator or a court or
other government authority or stock exchange, in each case applicable or binding
upon such Person or any of its property or to which such Person or any of its
property is subject or pertaining to any or all of the transactions contemplated or
referred to herein;
1.1.46. “Reserved Matters” means matters as listed in Clause 12.2;
1.1.47. “Restated Articles” means the restated and amended articles to reflect the terms
of the Transaction Documents, which shall be to the satisfaction of the Investors and
substantially in conformity with this Agreement;
1.1.48. “SEBI” means the Securities and Exchange Board of India, a body established under
the provisions of the Securities and Exchange Board of India Act, 1992;
1.1.49. “SEBI Guidelines” means the Securities and Exchange Board of India (Issue of
Capital and Disclosure Requirements) Regulations, 2009 and/or the Securities and
Exchange Board of India (Substantial Acquisitions of Shares & Takeovers)
Regulations, 2011, as the context may require;
1.1.50. “Securities” shall mean with respect to the Company, the Company’s equity or
preference shares, or any options, warrants, loans, convertible preference shares or
other securities that are directly or indirectly convertible into, or exercisable or
exchangeable as Equity Shares;
1.1.51. “Shares” mean Equity Shares and/or CCPS of the Company;
1.1.52. “Shareholders” mean the duly registered holders of the Shares from time to time
of the Company;
1.1.53. “Stock Exchanges” means the National Stock Exchange, the Bombay Stock
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Exchange or such other exchanges as may be determined by the Investors from
time to time;
1.1.54. “Subscription Money” means up to INR [●]/- (Rupees [●] only) which shall be the
total of the Investors’ portion of the Subscription Money, as set out against their
respective names in Schedule 4 hereto;
1.1.55. “Subscription Shares” means upto [●]([●]) CCPS, which shall be the total of
Investors’ portion of the Subscription Shares, as set out against their respective
name in Schedule 4 hereto;
1.1.56. “Subsidiary” has the meaning given to the said term in the Act;
1.1.57. “Tax” or “Taxation” means all forms of taxation, duties, levies, imposts and social
security charges, including without limitation corporate income tax, wage
withholding tax, provident fund, employee state insurance and gratuity
contributions, value added tax, customs and excise duties, capital tax and other
legal transaction taxes, dividend withholding tax, real estate taxes, other municipal
taxes and duties, environmental taxes and duties and any other type of taxes or
duties in any relevant jurisdiction, together with any interest, penalties, surcharges
or fines relating thereto, due, payable, levied, imposed upon or claimed to be owed
in any relevant jurisdiction;
1.1.58. “Third Party” means any individual, person or legal entity that is not defined herein
or ascribed any special meaning in this Agreement;
1.1.59. “Transaction Documents” shall mean this Agreement and all other deeds and
documents as may be executed or required to give effect to the transactions
contemplated by the foregoing;
1.1.60. “Transaction” means the subscription to the CCPS of the Company by the Investors
at the Closing in accordance with the terms of this Agreement;
1.1.61. “Transfer” (including the terms “Transferred by”, “Transferring” and

“Transferability”) means and includes:-
i. any transfer or other disposition of the Securities or voting interests or any interest
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applicable law.
therein, including, without limitation, by operation of Law, by court order, by
judicial process, or by foreclosure, levy or attachment;
ii. any sale, assignment, pledge, hypothecation, creation of security interest in, lien,
exchange, gift, donation, redemption, conversion or transfer in any other way,
whether or not voluntarily of such Securities or any interest therein, pursuant to an
agreement, arrangement, instrument or understanding by which the legal title to or
beneficial ownership of such Securities or any interest therein passes from one
Person to another Person or to the same Person in a different legal capacity,
whether or not for value;
iii. the granting of any Encumbrance in, or extending or attaching to, such Securities or
any interest therein; or
iv. creation of a right in favour of Third Party in any other manner other than provided
above.
1.2. INTERPRETATION. Unless the context of this Agreement otherwise requires:
a. words of any gender include each other gender;
b. words using the singular or plural number also include the plural or singular
number, respectively;
c. grammatical and cognate variations of all terms defined in the Agreement shall
have the same meaning as given to the terms defined in the Agreement;
d. the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to
this entire Agreement and not to any particular clause, article or section of this
Agreement;
e. the phrases “ordinary course of business” and “ordinary course of business

consistent with past practice” refer to the business and practice of the
Company;
f. whenever this Agreement refers to a number of days, such number shall refer
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applicable law.
to calendar days unless otherwise specified;
g. all accounting terms used herein and not expressly defined herein shall have
the meanings given to them under the Indian generally accepted accounting
principles(GAAP);
h. headings and captions are used for convenience only and shall not affect the
interpretation of this Agreement;
i. references to recitals, clauses, sub-clauses, sections, sub-sections, schedules,

annexures and appendices shall be deemed to be a reference to the recitals,
clauses, sub-clauses, sections, sub-sections, schedules and appendices of this
Agreement.
j. any reference to any statute or statutory provision shall include:
i. all subordinate legislation made from time to time under that

provision (whether or not amended, modified, re-enacted or
consolidated);
ii. such statute or provision as may be amended, modified, re-enacted or

consolidated.
k. any reference to an agreement, instrument or other document (including a

reference to this Agreement) herein shall be to such agreement, instrument or
other document as amended, supplemented or novated pursuant to the terms
thereof;
l. the word “including” herein shall always mean “including, without limitation”;
m. time is of the essence in the performance of the Parties’ respective obligations;

if any time period specified herein is extended, such extended time shall also
be of the essence.
n. the schedule, annexures and exhibits to this Agreement form an integral part
of this Agreement.
o. words / phrases not defined in this Agreement shall have the same meaning as
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applicable law.
assigned to them under the Companies Act, 1956 or the Companies Act, 2013
whichever is applicable to such word/phrase or the General Clauses Act 1987.
p. The words “other” and “otherwise” shall not be construed ejusdem generis with
any foregoing words where a wider construction is possible.
q. any terms defined elsewhere in this Agreement shall, for the purposes of this
Agreement, have the meaning as is so ascribed to such terms.
r. References to the knowledge, information, belief or awareness of any Person

shall be deemed to include the knowledge, information, belief or awareness of
such Person after examining all information and making all due diligence
inquiries and investigations which would be expected or required from a
Person of ordinary prudence.
2. EFFECTIVE DATE
2.1. The Agreement shall come into effect and be in full force on and from the date first
mentioned in this Agreement (the “Effective Date”).
3. MATTERS RELATING TO THE SUBSCRIPTION OF SHARES BY

INVESTORS
3.1. SUBSCRIPTION
3.1.1. The Investors agree to invest and subscribe to, and the Company agrees to allot and
issue to the Investors the Subscription Shares against the payment of the
Subscription Money by the Investors as per the terms and conditions mentioned in
this Agreement and in the manner set out herein below.
3.1.2. Subsequent to the allotment of Shares as captured in Clause 3.1.1 above, the share
holding pattern of the Company (on a Fully Diluted Basis), shall be as set out in
Schedule 3 hereto.
3.1.3. Separate agreement with each Investor: The Company’s agreement with each
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applicable law.
Investor is a separate agreement, and the allotment and issuance of the
Subscription Shares to each Investor is a separate allotment and issuance.
3.2. PAYMENT OF SUBSCRIPTION MONEY
3.2.1. Each of the Investors shall pay the respective portion of the Subscription Money to
the Company by way of bank remittance as per the payment instructions in
Schedule 5 hereto.
3.2.2. On the Closing Date, upon fulfillment of the Conditions Precedent to Closing as set
out under Clause 3.3 and within 10 (ten) Business Days from fulfillment of the
Conditions Precedent to Closing, each of the Investors shall remit their respective
portion of the Subscription Money to the bank account of the Company. The
remittance of the Subscription Money in the manner set out in this Agreement shall
constitute full and final payment of the Subscription Money by each of the Investors.
3.2.3. The Parties agree that notwithstanding anything contained in this Agreement, in the
event that the Closing does not occur in the manner and time envisaged in this
Agreement after remittance of the respective portions of the Subscription Money by
each of the Investors, as the case may be, then, without prejudice to the other rights
that the Investors may have under this Agreement and under Law or equity, the
Company shall refund within 3 (three) Business Days from the Closing Date, such
portion of the Subscription Money as received from the Investors.
3.3. CONDITIONS PRECEDENT TO CLOSING
3.3.1 The Investors shall not be obligated or liable to subscribe and the Company shall
not be obligated or liable to offer or allot any or all of the Subscription Shares,
unless and until all the conditions set forth in this Clause 3.3 (“Conditions
Precedent to Closing”) have been satisfied and unless such satisfaction of any of
the Conditions Precedent to Closing have been waived or deferred in writing by the
Investors.
3.3.2 The Conditions Precedent to Closing shall be the following:
19
applicable law.
a) The Company, through its authorized representative, and the Promoters shall have
duly executed each of the Transaction Documents to which they are Parties;
b) The Company and the Promoters shall have furnished to each of the Investors a
certified copy of the resolutions of the Board of Directors and the Shareholders (as
the case may be) approving (a) in-principle, the issue of the Subscription Shares to
the Investors, pursuant to the terms of this Agreement; and (b) the execution of this
Agreement and the execution hereof by the person signing or negotiating this
Agreement and any such documents executed in relation to the Transaction
contemplated herein for and on behalf of the Company and authorizing the
Transactions contemplated under this Agreement;
c) The Company and the Promoters shall have, if required, increased and reclassified
its authorized share capital to enable the issuance and allotment to the Investors
and shall have provided final drafts of the amended Charter Documents
incorporating the relevant provisions of this Agreement;
d) Nothing shall have occurred or shall be likely to occur, which, in the opinion of the
Investors, has or may reasonably be expected to have a Material Adverse Effect;
e) The Representations and Warranties of the Company and the Promoters, set out in
Schedule 6 of this Agreement, shall be true, correct and complete as of the date of
this Agreement and as of the Closing Date;
f) The Company and the Promoters shall ensure that all Consents required for
rendering its obligations under this Agreement enforceable, legal, valid and binding,
whether from any governmental agencies, shareholders or any other person have
been obtained and shall continue to be in force;
g) The Company shall have entered into employment agreements with each of the
Promoters, other employees and such other persons as the Board may decide;
h) The Company shall set aside [●]% ([●] only) Equity Shares towards ESOP, as reflected
in Schedule 3 hereto, to be granted to the deserving employees of the Company
20
applicable law.
from time to time and consisting of 10% of the unissued share capital of the
Company;
i) The Company shall procure a valuation certificate validating the issuance price of
the Subscription Shares, from a practicing chartered accountant;
j) The Company shall open a separate bank account for the purposes of receipt of
monies from the Investors;
k) The Promoters shall have transferred, in the ratio of their inter se shareholding, the
Advisor Shares to [●], duly executing share transfer form in Form SH-4, as set out in
the Companies (Share Capital and Debentures) Rules, 2014, and ensuring
compliance with all applicable Law for effectuating such transfer;
l) The Company shall ensure that it has rectified any issues arising from the findings of
the legal, financial and secretarial due diligence of the Company, to the satisfaction
of the Investors;
m) The Parties shall ensure that all the aforesaid Conditions Precedent to Closing are
duly fulfilled on or before the expiry of 30 (thirty) calendar days from the date of
signing of this Agreement or such extended period, if at all, as the Investors may
agree in writing.
3.4 CLOSING AND ALLOTMENT OF SHARES
3.4.1 Within 5 (five) Business Days upon receipt of Subscription Money (“Closing Date”),
the Company and the Promoters shall ensure that the Company will carry out the
following actions:
a) The Board of Directors shall hold a meeting of the Board and resolve to allot and
issue Subscription Shares to the Investors.
b) Issue the duly stamped, signed and sealed share certificates in relation to the
Subscription Shares issued by the Company which shall have the following legend
printed:
21
applicable law.
“The Shares represented by this certificate are subject to the terms and conditions contained in
the Share Subscription and Shareholders Agreement dated [●] and the Articles of
Association.”
c) Register each of the Investors as members of the Company and as the registered
owners of the respective Subscription Shares and also register each of the Business
Advisors as members of the Company and as the registered owners of the
respective Advisor Shares, and provide a certified true copy of the relevant extract
of the updated register of members maintained by the Company to each of the
Investors and Business Advisors.
3.5 CONDITIONS SUBSEQUENT TO CLOSING
3.5.1 The Company and the Promoters shall ensure that the following conditions
(“Conditions Subsequent to Closing”) are satisfied within 30 (thirty) calendar days
from the Closing Date:
a) The Company shall file Form PAS 3 and MGT 14 with the Registrar of Companies for
the allotment of Subscription Shares to the Investors and provide an acknowledged
copy of the same to each of the Investors;
b) The Company shall file Form MGT 14 with the Registrar of Companies with respect
to the adoption of the Restated Articles and provide an acknowledged copy of the
same to the Investors;
c) The Company shall comply with the provisions of the Foreign Exchange
Management Act, 1999 (“FEMA”) by filing Form FC-GPR with respect to the receipt of
foreign investment, wherever applicable;
d) The Company shall formulate and the Board shall approve the Employee Stock
Option Plan;
e) The Company shall update the statutory registers to reflect the Transaction activities
herein.
22
applicable law.
3.6 USE OF SUBSCRIPTION MONEY
The Subscription Money shall be utilized by the Company for the furtherance of the
Company’s business as decided by the Board and as per the Annual Operating Plan
discussed with the Investors.
The Company and the Promoters covenant and undertake to the Investors that
under any circumstances the Subscription Money will not be used to repurchase the
Shares from existing shareholders or for their personal guarantee or for any other
purpose without specific prior written approval from the Investors.
4. DIVIDENDS
The CCPS shall carry a dividend of 0.1% per annum on a preferential basis and on an
“as-if-converted” basis, which shall be calculated on the face value of such CCPS.
Each of the Investors shall be paid dividend at no less than 100% of the rate of
dividend paid to any other class of the Shareholders.
5. CONVERSION OF THE COMPULSORILY CONVERTIBLE PREFERENCE

SHARES
5.1. The Investors shall be entitled, at the Investors’ option (exercisable at their sole
discretion) to require the Company to convert all or any part of their CCPS into
Equity Shares, at any time prior to the expiry of 20 (twenty) years from the date of
issuance of the CCPS, in accordance with the terms and conditions of this
Agreement. However, the CCPS shall automatically convert into Equity Shares at the
then applicable Conversion Ratio upon the closing of a Liquidation Event, such that
the Investors can exit upon closing of such Liquidation Event.
5.2. Upon the Investors electing to convert the CCPS, each CCPS shall be convertible into
1 Equity Share of the Company at an initial conversion ratio of 1:1 unless adjusted as
provided hereunder (“Conversion Ratio”) and at a conversion price of INR[●]/-
(Rupees [●] only).
23
applicable law.
5.3. The Conversion Ratio shall be continuously adjusted until the Date of Conversion for
all stock dividends, stock splits, consolidations or such other similar events or
corporate issues (other than pursuant to the ESOP or bonus issue approved by the
Board) including any adjustment, in the event the Company issues additional Shares
at a purchase price less than that as mentioned in Schedule 4 herein in order that
the conversion rights of the Investors are not adversely affected by such events.
5.4. Adjustment for Anti-dilution protection: The Conversion Ratio and the conversion
price shall be continuously adjusted on a broad based weighted average basis as
provided in Schedule 8 of this Agreement until the Date of Conversion in accordance
with Clause 10 thereof.
5.5. For conversion of the CCPS, the Investors shall give a notice of conversion (“Notice
of Conversion”) to the Company, stating that the Investors or any member thereof
intends to convert the CCPS (or a portion thereof) held by it.
5.6. Upon receipt of the Notice of Conversion the Company shall take all necessary
corporate actions, obtain all necessary consents and subject to applicable Law, issue
such number of Equity Shares as provided above and within 15 (fifteen) days after
receipt of such notice and the accompanying share certificates, the Company shall
issue and deliver to the holder of the converted CCPS, a share certificate or
certificates for the aggregate number of Equity Shares issuable upon such
conversion.
5.7. Voting: As the holder of the CCPS, the Investors shall have the right to a number of
votes equal to number of Equity Shares issuable upon conversion of the CCPS on an
“as- if- converted” basis. The holders of CCPS shall vote with holders of Equity Shares
on all matters except as otherwise required by Law. Provided however, that in the
event of any adjustment in conversion price, the number of votes associated with
each CCPS will change accordingly.
Should the Investors at any time be restricted by applicable Law from exercising
votes (equal to number of Equity Shares issuable upon conversion of the CCPS) in
the manner provided above, each of the Promoters agree that, until the conversion
of the CCPS into Equity Shares, each Promoter shall vote in accordance with the
24
applicable law.
reasonable instructions of the Investors at a general meeting or provide proxies to
the Investors for the purposes of a general meeting for achieving the purposes of
this Agreement, in respect of such number of Equity Shares held by each of them
such that a relevant percentage (the “Relevant Percentage”) of the Equity Shares of
the Company are voted on in the manner required by the Investors. For the
purposes of this Clause, the Relevant Percentage shall be equal to the percentage of
Equity Shares in the Company that the Investors would hold if it were to elect to
convert its respective CCPS, into Equity Shares, in accordance with this Agreement.
The obligation of each of the Promoters to vote their Equity Shares as aforesaid
shall be pro-rata in accordance with their respective shareholding in the Company.
6. SHARE TRANSFERS
6.1 RESTRICTION ON TRANSFER OF PROMOTERS’ SHARES
6.1.1 The Promoters shall not Encumber or otherwise Transfer or cause to be Transferred
in favour of any Third Party, any of the Promoter Shares (including any Shares held
by their Affiliate) (“Lock-in”), unless previously approved by the Board and not until
the Investors and the Business Advisors have been provided a complete Exit as per
the provisions of Clause 7 below. Provided nothing in this Clause shall be construed
to restrict inter-se Transfer of Shares amongst the Promoters or Transfer by the
Promoters to their Affiliates and Immediate Relatives. Immediate Relatives for the
purpose of this Clause means spouse, parents and children of each of the Promoter.
6.1.2 Subject to Clause 6.1.1 above, the Promoter Shares held by each Promoter as on the
Effective Date shall be released on an equal annual basis over a period of 4 (four)
years from the Effective Date.
6.1.3 For the purpose of this Agreement, in respect of each Promoter, all such Promoter
Shares which are released from Lock-in shall be referred to as “Released Shares”,
and all the Promoter Shares which are subject to Lock-in shall be referred to as
“Unreleased Shares”.
6.1.4 Provided, however, subject to applicable Laws, in case of an exit opportunity by way
of an Qualified IPO, merger, acquisition, takeover or a strategic sale, or in case of
25
applicable law.
death/permanent disability, all the Promoter Shares held by each Promoter shall be
considered as fully released from Lock-in and the Promoters are eligible for full
economic benefit of all the Promoter Shares held by each of them.
6.1.5 The Company shall not register any Transfer of the Promoter Shares, unless the
procedure set out in this Clause has been complied with. Any Transfer of Promoter
Shares which is not in compliance with the provisions of this Clause shall be void ab
initio and the Company shall refuse to record or acknowledge such Transfers.
6.1.6 Each Promoter shall have voting rights in respect of all Promoters’ Shares held by
him in accordance with the terms of this Agreement, whether or not the Shares are
released from Lock-in.
6.1.7 In the event any Promoter leaves the employment of the Company for Cause:
(i) the Released Shares of such Promoter shall be compulsorily offered at face value
to the a) Company, and upon refusal to buy back by the Company, to the b) existing
Shareholders in the ratio of their inter se shareholding in the Company on such date
of termination. On termination of any of the Promoters’ employment, for any
reason other than for Cause, the Released Shares held by such Promoter shall be
compulsorily offered, at 20%(twenty percent) discount of the lower of the fair
market value or the value as per the immediately previous round of financing in the
Company, to the a) the Company, and upon refusal to buy back by the Company, to
the b) existing Shareholders in the ratio of their inter-se shareholding in the
Company.
(ii) 50% (fifty percent) of the Unreleased Shares of the Promoter shall be transferred
to the ESOP pool at face value and the remaining 50% (fifty percent) shall be
transferred to the existing Shareholders proportionate to their inter-se shareholding
in the Company on such date of termination, at face value.
6.1.8 Without prejudice to the provisions contained herein, if the exiting Promoter or a
representative appointed by the exiting Promoter is on the Board of Directors, such
person shall forthwith resign as a Director of the Company.
26
applicable law.
6.2 RESTRICTIONS ON TRANSFERS
6.2.1 A Shareholder can Transfer its Shares in the Company only after the Transfer has
been approved by the Board of the Company and is in accordance with and subject
to the terms and conditions set forth in this Agreement and more particularly in this
Clause 6.2, including without limitation Clause 6.3 (Right of First Refusal) and 6.4
(Tag Along Right).
6.2.2 Any attempt by any Shareholder to Transfer its Shares in contravention of the
provisions contained in Clause 6.2.1 above shall be considered void and invalid. The
Investors’ CCPS and the Advisor Shares shall be freely transferable and assignable
by the Investors and the Business Advisors and their successors in interest at all
times without any conditions or restrictions, except that the Investors cannot sell or
otherwise transfer any CCPS and the Business Advisors cannot sell or otherwise
transfer any Advisor Share or the beneficial interest in the same, to any competitor
or any directors, associates, or persons acting in tandem with such competitor,
unless Shareholders holding at least 75% (seventy five percent) of the Shares of the
Company (on a Fully Diluted Basis) agree through a special resolution to allow
transfer of the CCPS or the Advisor Shares, as applicable. This restriction on sale
shall hold till 3 (three) years from the Effective Date of this Agreement or a Qualified
IPO, whichever is earlier.
6.2.3 If any Shareholder sells any Shares in the Company to a Third Party, then such
purchaser shall execute a Deed of Adherence as detailed in Schedule 7 to this
Agreement.
6.3 RIGHT OF FIRST REFUSAL.
6.3.1 None of the Promoters can Transfer any of their Shares to a Third Party without first
offering the said Shares (“Sale Shares”) to the Investors and the Business Advisor(s)
(“ROFR Right Holders”). Each of the ROFR Right Holders shall have the right, but not
the obligation, to purchase such Sale Shares, on a pro-rata basis, from the selling
Promoter(s) (“Selling Promoter”).
6.3.2 Within 2 (two) Business Days of agreeing to sell or Transfer the Sale Shares or at
27
applicable law.
least 30 (thirty) days before the date of the proposed sale (whichever is earlier), the
Selling Promoter, shall send a written notice (the “Sale Notice”) to each of the ROFR
Right Holders, setting forth in detail the terms of the proposed sale, including the (i)
name of the Person(s) to whom the sale is proposed to be made (the “Purchaser”),
(ii) the proposed sale price per Share (“Sale Price”), (iii) the date of the proposed sale
(which shall not be less than 30 days from the date of receipt of the Sale Notice) and
(iv) number of Sale Shares in the Company that are proposed to be sold.
6.3.3 Upon receipt of the Sale Notice, each of the ROFR Right Holders shall have the right,
exercisable at their sole discretion to purchase the Sale Shares at the Sale Price on
the terms and conditions mentioned in the Sale Notice, by serving upon the Selling
Promoter a written notice in that regard within 10 (ten) Business Days of receipt of
the Sale Notice (“Right of First Refusal/ROFR”).
6.3.4 The Parties agree that each of the ROFR Right Holders may, at their sole discretion,
choose not to exercise the Right of First Refusal. In the event any of the ROFR Right
Holders do not wish to exercise the Right of First Refusal, then the same shall be
informed to the Selling Promoter and the remaining ROFR Right Holders within 10
(ten) Business Days of receipt of the Sale Notice.
6.3.5 If any or all of the ROFR Right Holders exercise their Right of First Refusal as
mentioned above, within 10 (ten) Business Days from the date of receipt of the Sale
Notice, subject to the necessary regulatory Consents, the Selling Promoter shall
tender the respective Sale Shares to such ROFR Right Holders, and within 15 (fifteen)
Business Days thereafter, payments for the same shall be made to the Selling
Promoter as consideration for the Sale Shares at the Sale Price.
6.3.5 If none of the ROFR Right Holders exercise their Right of First Refusal and do not
serve a written notice upon the Selling Promoter within the time period specified in
Clause 6.3.3 above, then the Selling Promoter may sell or Transfer the Sale Shares to
the Purchaser at the Sale Price as mentioned in the Sale Notice. Provided that the
sale to the Purchaser shall be subject to the Tag Along Right as set forth in Clause
6.4 below, unless such Tag Along Right is waived in writing by any of the ROFR Right
Holders.
28
applicable law.
6.3.6 The Parties agree that if completion of the sale, under this Clause, to the proposed
Purchaser does not take place within a period of 90 (ninety) calendar days from the
date of the Sale Notice, the Selling Promoter’s right to transfer under this Clause
shall lapse and the provisions of this Clause shall once again apply.
6.4 TAG ALONG RIGHT
6.4.1 Upon receipt of the Sale Notice as provided in Clause 6.3.2 above, each of the
Investors and the Business Advisor(s)(the “Right Holders”) shall have the right to
Transfer the Shares allotted under this Agreement, together with the Selling
Promoter(s) on a pro-rata basis and on the terms and conditions as set out in this
Clause (the “Tag Along Right”) at the Sale Price and subject to any other terms and
conditions that the Sale Shares may be subject to as mentioned in the Sale Notice.
6.4.2 If any of the Right Holders choose to exercise the Tag Along Right, then such Right
Holder shall serve upon the Selling Promoter a written notice in that regard within
10 (ten) Business Days of receipt of the Sale Notice by such Right Holder.
6.4.3 The Parties agree that any or all of the Right Holders may, at their discretion, choose
not to exercise their Tag Along Right. In the event any of the Right Holders do not
wish to exercise the Tag Along Right, then the same shall be informed to the Selling
Promoter of the same within 10 (ten) Business Days of receipt of the Sale Notice.
6.4.4 If any or all of the Right Holders exercise the Tag Along Right as mentioned above,
then the Selling Promoter shall ensure that the Purchaser purchases or accepts the
Transfer of the Shares of such Right Holder(s) along with the Sale Shares mentioned
in the Sale Notice at the Sale Price and on the terms mentioned in the Sale Notice.
The Selling Promoter shall ensure that the Purchaser completes the Transfer of the
Right Holders’ Shares at the same time as completion of Transfer of the Sale Shares
held by the Selling Promoter. The Selling Promoter shall ensure that under any and
all circumstances, the Right Holders’ Shares are sold or Transferred to the Purchaser
before the sale or Transfer of the Sale Shares, failing which the sale or Transfer of
the Sale Shares by the Selling Promoter shall be void.
6.4.5 If none of the Right Holders exercise the Tag Along Right and serve a written notice
29
applicable law.
upon the Selling Promoter within the time period specified in Clause 6.4.2 above,
then the Selling Promoter may sell or Transfer the Sale Shares to the Purchaser at
the Sale Price and on the terms and conditions mentioned in the Sale Notice (and
not at any other price or on any other terms).
6.4.6 The Parties agree that if completion of the sale under Clause 6.4.5 to the proposed
Purchaser does not take place within the period of 90 (ninety) calendar days from
the date of the Sale Notice, the Selling Promoter’s right to transfer under Clause 6.3
shall lapse and the provisions of this Clause 6.4 shall once again apply.
6.4.7 The purchase or sale/Transfer under these Clauses 6.3 and 6.4 shall be subject to
the necessary Consents being obtained.
6.5 PRE-EMPTIVE RIGHT
6.5.1 After the Closing Date and until the execution and completion of a Qualified IPO, if
the Company intends to raise additional funding (“Additional Funding”), the
Company shall raise the Additional Funding by way of further subscription to
securities by each of the Investors and the Business Advisor(s) (“Pre-emptive Right
Holder”), which subscription may be made by each of the Pre-emptive Right Holder
on a pro-rata basis at their sole and absolute discretion, on terms and conditions,
including price, which are mutually acceptable to the Pre-emptive Right Holders and
the Promoters (“Acceptable Terms”). Notwithstanding anything contained in this
Clause 6.5.1, if at any time the Pre-emptive Right Holders agree to a ratio for
subscription to Shares in an Additional Funding other than their pro-rata
preemptive rights, then such ratio agreed to by the Pre-emptive Right Holders will
override their pro-rata preemptive rights.
6.5.2 In this regard, the Company shall provide each of the Pre-emptive Right Holders
with a notice on the option to provide the Additional Funding on Acceptable Terms.
6.5.3 Upon the Company providing a notice, the Investors shall have a period of 30 (thirty)
Business Days from the receipt of such notice, to agree to invest in the Additional
Funding.
30
applicable law.
6.5.4 If all or any of the Pre-emptive Right Holders waive the right herein or the
Acceptable Terms are not satisfactory to the concerned Parties, the Company shall
be entitled to approach a Third Party or potential investor for the purposes of
making such an Additional Funding, or the balance thereof.
6.5.5 The Parties agree that if completion of the issuance under Clause 6.5.4 to the
proposed Third Party does not take place within the period of 90 (ninety) calendar
days from the date of the issuance of the notice as mentioned in Clause 6.5.2 above,
the right to issue under this Clause 6.5 shall lapse and the provisions of this Clause
shall once again apply.
6.5.6 The Parties hereby agree that there exists no commitment by the Pre-emptive Right
Holders to further capitalize the Company or provide finance to the Company in the
form, inter alia, of guarantees or loans.
6.5.7 For the purpose of clarification, the rights available to the Investors in this Clause 6.5
shall not apply in case of application of the provisions of Clause 10 hereto.
6.6 PROMOTERS’ RIGHTS – RIGHT TO PURCHASE
If any of the Investors or the Business Advisors propose to sell their Shares on
mutually agreeable terms, offer would be first made to the other Investors and
Business Advisors. The other Investors and Business Advisors would have a period
of 30 (thirty) days to accept or reject the offer. After the other Investors and
Business Advisors decline in part or whole to purchase the Shares of the
Investor/Business Advisor desirous of selling, the shareholding will be offered to the
Promoters on the same terms and conditions as offered to the other Investors and
Business Advisors. The Promoters would have a period of 30 (thirty) days to accept
or reject the offer. If the Promoters do not accept the offer in whole, then the
Investor/Business Advisor desirous of selling, shall be free to sell the Shares to a
Third Party on terms no less favorable than those offered to the Promoters.
31
applicable law.
7. REDEMPTION RIGHTS AND DRAG ALONG RIGHTS
7.1. The Promoters would work towards a plan that would give the Investors and the
Business Advisors an exit by the 5th anniversary of the Closing Date. This can happen
in the following ways:
7.1.1. The Promoters shall make efforts to arrange for an exit of the Investors and the
Business Advisors through acquisition of the CCPS and the Advisor Shares by a Third
Party or where the Company decides to raise subsequent rounds of funding, the
Investors and the Business Advisors at their sole discretion, may decide to sell their
CCPS and Advisor Shares, as applicable, to such Third Party at a mutually agreed
price.
7.1.2. If after a period of 5 (five) years from the Closing Date, the Promoters have not been
able to execute an exit for the Investors and the Business Advisors, specified in
Clause 7.1.1 above, the Investors and the Business Advisors can, through written
notice, offer their respective CCPS and Advisor Shares, as applicable, to the
Company and/or the Promoters to provide them an exit by buying back the Shares
at a Fair Market Value, determined by a mutually agreed independent valuer.
7.1.3. In the event that even after completion of 5 (five) years from the Closing Date, no
exit has been provided to the Investors and the Business Advisors as specified in
Clause 7.1.1 above and neither the Company nor the Promoters purchase the CCPS
and the Advisor Shares as offered to them by the Investors and/or the Business
Advisors, as applicable, under Clause 7.1.2 above, the Investors and the Business
Advisors will have the unilateral right to sell their CCPS and/or Advisor Shares, as
applicable to any Third Party. If such Third Party requires additional Shares in the
Company then the Investors (with the consent of holders of more than 75% of the
Investor CCPS) shall have the right to drag along and require the Promoters to sell
some or all of their Promoter Shares at the same price (or an equivalent price in
case the sale is of CCPS) at which the Investors and/or the Business Advisors
propose to sell their Shares to such Third Party to enable such an exit.
7.1.4. The Company shall on the request of the Investors list on the Institutional Trading
32
applicable law.
Platform (ITP) of the Bombay Stock Exchange or National Stock Exchange platform
that provides equivalent capital gains benefit for the sale of Shares of the Investors
and/or the Business Advisors to any party at any time during which time any of the
Investors or the Business Advisors hold any Shares in the Company.
7.1.5. Notwithstanding any of the above, in case the Promoters are able to provide a
partial exit opportunity then the same will be first offered to the Investors and the
Business Advisors, in proportion to their shareholding in the Company (on a Fully
Diluted basis).
7.2. Notwithstanding the provisions of Clause 6.6 above, if 75% (seventy five percent) or
more of the Shareholders of CCPS decide to sell the CCPS held by them to any Third
Party (hereinafter the “Exiting Investors”), then such Exiting Investors shall have the
right to drag along the other Shareholders and such Shareholders shall be obliged
to transfer their Shares to such Third Party as identified by the Exiting Investors on
terms no less favorable than those offered to the Exiting Investors.
8. INFORMATION AND REPORTING

8.1 The Investors and the Business Advisors shall receive from the Company:
a. Quarterly (un-audited) financial statements as soon as practicable, but in any

event within 30 (thirty) calendar days from each half year end;
b. Annual (audited) financial statements as soon as practicable, but in any event

within 150 (one hundred and fifty) calendar days following the closure of the
preceding Financial Year;
c. Annual Operating Plan (including quarterly budget containing an income

statement, a statement of cash flow, a balance sheet and detailed break-down of
working capital) and headcount details, no later than 15 (fifteen) days of the end of
each fiscal year for the following fiscal year.
8.2 The aforementioned financial statements shall be submitted including and along
with financial projections, order book, business strategy, credit position and cash
33
applicable law.
flow statements, and such other information and documents as the Investors
and/or the Business Advisors may reasonably request.
9. VISITATION AND INSPECTION RIGHTS

The Investors and/or the Business Advisors and/or their authorized representatives
and/or agents/ observer shall be provided access, at all times during normal
business hours, subject to prior notice of 2 (two) Business Days being given, be
entitled to visit the office of the Company and to inspect / audit its material
contracts and financials, site, stores, accounts, documents, records, premises, and
equipment and all other property of the Company. The Company shall use
reasonable efforts to provide such information, data, documents, evidence as may
be required for the purpose of and in the course of such inspection in connection
therewith. The Investors shall be entitled, to consult with the statutory auditors of
the Company regarding the financial affairs of the Company. It shall be the
responsibility of the Promoters to ensure that the obligations under this clause are
given full effect.
10. ANTI-DILUTION PROTECTION

If at any time after the Closing Date, the Company issues to any Person (other than
pursuant to the ESOP or bonus issue approved by the Board (including the Investor
Director)), Equity Shares or other instruments that are convertible into Equity Shares
or which confer a right to subscribe to Equity Shares at a later date, at a price per
share that is lower than the current valuation, then the Investors and the Business
Advisors shall be entitled to such number of additional Shares as calculated using
the broad based weighted average formulae and as captured in Schedule 8 hereto.
11. BOARD OF DIRECTORS

11.1 The Board of the Company shall consist of a maximum of [●] ([●]) Directors. The
Promoters shall be entitled to appoint 2 (two) Directors and the Investors shall be
entitled to appoint 1 (one) Director (“Investor Director”). So long as the Investors
34
applicable law.
hold any Shares in the Company, the Company will permit a representative of the
Investors (“Board Observer”) to attend all meetings (whether in person, telephonic
or other) of the Board of the Company, including all committees thereof, in a
non-voting observer capacity and shall provide to the Board Observer, concurrently
with and in the same manner as distributed to the directors or other voting
members of the respective board, copies of all meeting notices, agendas, board
materials, information, draft resolutions, proposed actions by written consent, and
other communications so distributed.
11.2 The chairman of the Board shall be a nominee of the Promoters and shall not have
a casting vote.
11.3 For the Board meetings, to constitute a valid quorum, a minimum of 2 (two)
Directors, including the Investor Director shall need to be present within 1 (one)
hour, in case a valid quorum is not present, the meeting shall automatically stand
adjourned to 7 (seven) Business Days later (“Adjourned Meeting”), at the same time
and the same venue. If at such Adjourned Meeting also, no valid quorum is present
within 3 (three) hours from the time that the Adjourned Meeting should have begun,
then the Directors present at such Adjourned Meeting, not being less than 2 (two),
shall be deemed to constitute a valid quorum and the Board may, proceed to
discuss and decide on the matters on the agenda (except for any Reserved Matters
specified in Clause 12.2 below in case of absence of the Investor Director) and any
decisions so taken shall be binding on all the Parties.
11.4 Written notice of at least 14 (fourteen) days of every meeting of the Board of
Directors shall be given to every Director and every alternate Director at their usual
address whether in India or abroad, provided always that a meeting may be
convened by a shorter notice than 14 (fourteen) days with consent of all the
Directors.
11.5 The notice of each Board meeting shall include an agenda setting out the business
proposed to be transacted at the meeting. Unless waived in writing by all Directors,
any item not included in the agenda of a meeting shall not be considered or voted
upon at that meeting of the Board.
35
applicable law.
11.6 Subject to provisions of the Act, this Agreement (specifically and without limitation,
this Clause 11 hereof) and Articles, all decisions of the Board shall be taken by
majority vote of the Directors present or represented at the meeting.
11.7 Dead-Lock: In case of a deadlock in the decision making at the Board, the matters
shall be placed before the Shareholders.
11.8 Subject to provisions of the Act, a resolution by circulation shall be as valid and
effectual as a resolution duly passed at a meeting of the Directors called and held
provided it has been circulated in draft form, together with the relevant papers, if
any, to all the Directors, in India or abroad, and has been approved by a majority of
the Directors entitled to vote thereon. Provided however, no resolution in relation to
any of the matters listed under Clause 12.2 shall be passed at a Board Meeting
unless approved by the Investor Director as mentioned in Clause 12.1 below.
12. RESERVED MATTERS

12.1. All matters shall be decided at the Board Meetings by a simple majority unless
otherwise provided by the applicable Law. However, the following matters shall
require the approval of the Investor Director or the written approval of the Investors
or any authorized representative of the Investors at the general meeting, which
consent shall be received in the form of a favorable vote and deemed to be an
affirmative vote by the Investors on a resolution passed at a meeting of the Board or
the Shareholders of the Company.
12.2. The Reserved Matters requiring the affirmative vote in advance of the Investor
Director or the written approval of the Investors or any authorized representative of
Investors in writing shall be the following:
(a) alteration or changes to the rights, preferences or privileges of any equity share or
any series of preference shares of the Company;
36
applicable law.
(b) increase or decrease or other alteration or modification in the authorized number of
the equity shares or preference shares or issuance of any shares/security by the
Company;
(c) creation (by reclassification or otherwise) of any new class or series of equity shares
or preference shares;
(d) sale, transfer, mortgage, charge, pledge, creation of a lien or other encumbrance,
lease, exchange or other disposition of material assets or any interest therein or
sale or disposition of any part of the undertaking and/ or goodwill of the Company
or the Subsidiaries;
(e) any action that results in the redemption or buy-back of any equity shares or
preference shares of the Company except repurchases at cost upon terminations of
employment;
(f) entering into, variation or termination of any material agreement or arrangement

outside the ordinary scope of business by the Company or the Subsidiaries;
(g) changes in the authorized number of directors on the Board, the manner of
appointment of Directors, or appointment of any Directors;
(h) removal of the Investors Director;
(i) declaration or payment of any dividends or other distributions on any shares of the
Company;
(j) amendments to the memorandum of association, articles of association and other

charter or organizational documents of the Company or any of its Subsidiaries;
(k) formation of any Subsidiary or entering into any joint venture or similar
arrangement by the Company or any of its Subsidiaries, acquisition of other
businesses (other than short term investments in bank deposits/mutual funds to
park short term surplus funds);
37
applicable law.
(l) commencement of any new line of business other than as stated in the main objects
clause of the memorandum of association of the Company which is in effect as on
the Effective Date hereof;
(m) any material transactions or dealings by the Company, its Subsidiaries or any of
their directors with any connected person other than in the ordinary course of
business (subject to the obligation to disclose all such transactions to the Investors);
(n) mergers, acquisitions, change of voting control, amalgamations, consolidations,

spin-offs, sale of substantial assets, bankruptcy, voluntary liquidation, winding up,
compromise with creditors, other similar or related actions, either by or of the
Company;
(o) appointment or change of the statutory or internal auditors of the Company;
(p) authorizing any indebtedness in excess of Rs. 25,00,000/- (Rupees Twenty Five Lakhs
only) or creation of any lien or charges or mortgage or encumbrance on the assets
of the Company in connection therewith;
(q) approval of an any exit opportunity;
(r) determining the pricing, and place/stock exchange of a Qualified IPO;
(s) changes to material accounting or tax policies or practices;
(t) any change in the Financial Year for preparation of audited accounts;
(u) acquire or sell shares, securities, debentures, and bonds in or of any other
company;
(v) winding up and/or liquidation events of the Company or any of its Subsidiaries;
(w) conversion of the Company from a private company to a public company;
(x) each of the above with respect to each Subsidiary of the Company.
12.3. The Parties agree that the principles set out in Clause 12.1 are fundamental to the
governance of the Company and each Party undertakes not to commit any act or
38
applicable law.
omission that would violate or prejudice the spirit and intent of this Clause 12.1. If
any other provision of this Agreement conflicts with the provisions of this Clause
12.1, the provisions of this Clause 12.1 shall prevail and be given effect to.
12.4. Meetings of Shareholders of the Company: A general meeting of the Shareholders

shall be convened by serving at least 21 (twenty one) days written notice to all
Shareholders, with an explanatory statement containing all relevant information
relating to the agenda for the general meeting.
12.5. The valid quorum for a Shareholders meeting shall be at least 2 (two) persons,
present in person or by proxy. No business shall be transacted unless there is a
valid quorum, both at the time the meeting is called to order and throughout the
meeting. Each member shall receive at least 21 (twenty one) Business Days’ notice of
a meeting unless all the members agree otherwise for shorter notice period. The
agenda and schedule for the meeting will be sent to the members 21 (twenty one)
days prior to the meeting, the receipt of which, only if duly confirmed by the
members will amount to a valid notice.
12.6. If within 1 (one) hour of the time appointed for a general meeting there is no
quorum, the meeting shall stand automatically adjourned to the same place and at
the same time (as the previous meeting) 7 (seven) Business Days later (“Adjourned
Shareholders Meeting”).
12.7. If at the Adjourned Shareholders Meeting the required quorum is not present within
3 (three) hours from the time that the Adjourned Shareholders Meeting should have
begun, any 2 (two) shareholders/ authorized representatives present shall form the
quorum for the Adjourned Shareholders Meeting and may proceed to discuss and
vote only upon any matter listed in the agenda of such original meeting of the Board
(except for any Reserved Matters) and no other matters will be voted upon or be
passed at such a meeting.
12.8. Notwithstanding the above, the approval or passing of a resolution in a

Shareholders’ meeting shall require the presence of valid quorum and approval of
such resolution by the affirmative vote of a majority of Shareholders (or their
authorized representatives) present and voting, provided that the approval or
39
applicable law.
passing of a resolution in respect of a Reserved Matter shall also require an
affirmative vote of the Investors.
13. LIQUIDATION PREFERENCE

Upon the occurrence of a Liquidation Event, subject to the applicable Law, the
Investors and the Business Advisors will have liquidation rights senior to all other
outstanding securities of the Company. The Investors and the Business Advisor shall
be entitled to receive an amount, which shall be equal to the sum of (i) the value of
the respective Subscription Shares or Advisor Shares (as applicable) at the current
valuation of Shares of the Company, less any dividends already paid; and ii) amount
of the Company’s assets, in proportion of their Shareholding in the Company (on a
Fully Diluted Basis), left after payment of an amount to the Investors and the
Business Advisors in point (i) above; or complete cash proceeds from the
Liquidation Event, when the proceeds are lower than the value of all the
Subscription Shares and Advisor Shares. The Investors and the Business Advisors
will have no liability whatsoever.
14. CORPORATE ACTION

If on discussion and determination of the Board, including with the approval of the
Investor Director, the Company decides to undertake any of the following actions:
a) moving the Intellectual Property that is core to the business of the Company
to a new entity;
b) carrying on the business of the Company by the Promoters in a new entity;
c) creating a holding-subsidiary relationship with the Company; and
d) continuing the business of the Company by a separate entity,
the Company and the Promoters shall forthwith ensure that the percentage of
shareholding of the Investors and the Business Advisors as on as-is basis is reflected
40
applicable law.
in the new entity incorporated pursuant to this clause and necessary
documentation shall be executed to give effect to the same.
15. EMPLOYEE STOCK OPTION PLAN (ESOP)

The Company within 30 (thirty) days from the Closing Date, shall ensure that the
ESOP is adopted by the Board as per Clause 3.5.1(d). The vesting period of the
options shall be annual over a period of 4 (four) years with an initial cliff of 1 (one)
year. The terms and conditions of the ESOP shall be to the satisfaction of the
Investor Director.
16. TERMINATION
16.1. Notwithstanding anything contained in this Agreement, the rights and obligations of
the Shareholders under this Agreement shall terminate upon the occurrence of the
earlier of the following:
a. Upon the completion by the Company of a Qualified IPO; provided that such
rights under this Agreement, which are not inconsistent with the listing agreement
shall continue to be in force; or
b. By the written consent of all Parties.
16.2. Provided however that, notwithstanding anything contained in this Clause 16 or any
other provisions of this Agreement, Clause 21(Governing Law and Arbitration),
Clause 30 (Confidentiality) and Clause 23 (Notices) and this Clause 16.2 of this
Agreement shall survive the termination of this Agreement.
17. INDEMNIFICATION
17.1. Indemnification Event: The Company (“Indemnifying Parties”) shall indemnify,
defend and hold harmless, each of the Investors and the Business Advisors and
their respective agents (collectively the “Indemnified Parties”),from and against any
and all losses (direct and/or indirect), damages, costs and expenses incurred or
suffered, by any of the Indemnified Parties including third party claims, arising out
of or in connection with any of the following (but not limited to the same) (“Claim”):
41
applicable law.
(a) any misrepresentation, failure and/ or any breach of any: (i) Representation and/ or
Warranties as set forth in Schedule 6 of this Agreement; or (ii) any representation
and/ or warranty of the Company under any other Transaction Document; and/or
(b) any infringement or violation of third party Intellectual Property Rights; and/ or
(c) negligence, willful misconduct or fraud of the Indemnifying Party or Indemnifying

Party’s officers, employees, agents, directors and advisors; and/ or
(d) any failure to comply with the Law or contractual obligations; and/ or
(e) non-payment of Taxes by the Company; and/ or
(f) any litigation, event, matter or circumstance arising or existing in relation to the
Company’s’ subsequent to the date of incorporation of the Company which was not
disclosed to the Shareholders in writing prior to execution of this Agreement.
17.2. PROCEDURE FOR INDEMNIFICATION:
a) If any of the Indemnified Parties sustain or incur, or are likely to sustain or incur, any
Claim, the Indemnified Parties shall promptly but not later than 60 (sixty) calendar
days from the Claim being incurred or sustained issue a notice in writing
(“Indemnification Notice”) to the Company, describing in reasonable detail the
Losses sustained or incurred by the Indemnified Party.
b) Within 30 (thirty) calendar days of receipt of the Indemnification Notice, the

Company shall absolutely and unconditionally indemnify for any Claim sustained or
incurred by the Indemnified Parties in the manner provided in the Indemnification
Notice, subject to the applicable Law.
c) Each of the Indemnified Parties shall be entitled, in its absolute discretion, to take
such action as it may deem necessary to avoid, dispute, deny, resist, appeal,
compromise or contest or settle any Claim (including without limitation, making
claims or counterclaims against third parties). The Indemnified Parties shall consult
with the Company prior to settling any claim. The indemnification rights of the
Parties under this Agreement are independent of, and in addition to, such other
rights and remedies as the Indemnified Parties may have under the applicable Law
42
applicable law.
or in equity or otherwise, including the right to seek specific performance,
rescission, restitution or other injunctive relief, none of which rights or remedies
shall be affected or diminished thereby.
18. SPECIFIC PERFORMANCE

Each of the Shareholders shall be entitled to an injunction, restraining order, right for
recovery, suit for specific performance or such other equitable relief as a court of
competent jurisdiction may deem necessary or appropriate to restrain the other
Parties from committing any violation or enforce the performance of the covenants,
representations and obligations contained in this Agreement. These injunctive
remedies are cumulative and are in addition to any other rights and remedies the
Shareholders may have at law or in equity, including without limitation a right for
damages.
19. EXPENSES
The Company shall bear its own fees and expenses incurred for the purpose of the
Transaction under this Agreement. The Company will also reimburse the Investors
for all expenses incurred in connection with legal documentation of the Transaction
as well as those incurred in connection with enforcing the Investors’ rights under the
documents, including future modifications, amendments, waivers, and the like,
subject to a maximum of Rs. [●] (Rupees[●] only) exclusive of applicable taxes,
payable in full after the Transaction.
20. ARTICLES
The Parties shall ensure that Articles of the Company, shall at all times incorporate
the terms of this Agreement to the maximum extent permitted under Law and the
Shareholders hereby agree to exercise their voting rights and take such other
actions as may be necessary to cause the Company to adopt the provisions of this
Agreement into the Articles at Closing Date, and to make all amendments thereto,
including appropriate amendments to the Articles, as may be required from time to
time. Every Shareholder, present and future, shall be deemed to join the Company
43
applicable law.
with full knowledge of the terms and conditions set forth in this Agreement.
21. GOVERNING LAW AND ARBITRATION

21.1. This Agreement and its performance shall be governed by and construed in all
respects in accordance with the Laws of the Republic of India and the courts at New
Delhi shall have the exclusive jurisdiction over any dispute arising under this
Agreement. In the event of a dispute or difference (“Dispute”) relating to any of the
matters set out in this Agreement, the Parties shall discuss in good faith to resolve
the Dispute. In case the Dispute is not settled within 30 (thirty) calendar days, it shall
be referred to arbitration in accordance with the Arbitration and Conciliation Act,
1996 ("Arbitration Act"), as amended from time to time.
21.2. All Disputes that have not been satisfactorily resolved under Clause 21.1 above shall
be referred to arbitration before a sole arbitrator to be jointly appointed by the
Parties. In the event the Parties are unable to agree on a sole arbitrator within 10
(ten) calendar days following the 30 (thirty) calendar day period specified in Clause
21.1 above (“Initial Period”), the matter will be referred to a panel of arbitrators
(“Panel”) to be appointed within 10 (ten) calendar days from the expiry of the Initial
Period. Both Parties to the dispute (that is the party instituting the arbitration
proceeding and the respondent party) shall appoint 1 (one) arbitrator each to the
Panel and the 2 (two) arbitrators so appointed by the Parties shall together appoint
one more arbitrator to the Panel.
21.3. The arbitration proceedings shall be conducted in the English language. Subject to
Clause 21.5 below, the Parties shall equally share the costs of the arbitrator’s fees
but shall bear the costs of their own legal counsel engaged for the purposes of the
arbitration.
21.4. The Panel shall make an award in writing within 60 (sixty) Business Days of the
reference of the dispute to arbitration. Such award shall be final and conclusive and
binding upon the Parties and non-appealable to the extent permitted by Law.
21.5. The Parties further agree that the arbitrators shall also have the power to decide on
the costs and reasonable expenses (including reasonable fees of its counsel)
44
applicable law.
incurred in the arbitration and award interest up to the date of the payment of the
award.
21.6. The provisions of this Clause 21 shall survive the termination of this Agreement.
22. ASSIGNABILITY
Except as provided in this Agreement, none of the Parties shall be entitled to assign
their rights and obligations under the Agreement to a third party without the prior
written consent of all the other Parties.
23. NOTICES
23.1. Unless otherwise provided herein, all notices or other communications to be given
shall be made in writing and by letter or email (save as otherwise stated) and shall
be deemed to be duly given or made, in the case of personal delivery, when
delivered; in the case of facsimile transmission, provided that the sender has
received a receipt indicating proper transmission, when dispatched, or, in the case
of a letter, 3 (three) Business Days after being deposited in the post (by registered
post, with acknowledgment due), postage prepaid, to such party at its address or at
such other address as such party may hereafter specify for such purposes to the
other by notice in writing. The addresses referred to are as follows:-
a) In the case of a notice to the Company:

Address :
Attention :
Telephone :
Email :
b) In the case of a notice to the Investors, at their respective addresses mentioned in

Schedule 1.
c) In the case of a notice to the Business Advisors, at their respective addresses

mentioned in Schedule 1.
45
applicable law.
d) In case of notice to the Promoters:
Name :
Address :
Telephone :
Email :
Name :
Address :
Telephone :
Email :
23.2. A notice or other communication received on a day other than a Business Day, or
after business hours in the place of receipt, shall be deemed to be given on the
next following Business Day in such place.
23.3. The address or facsimile numbers for serving notices can be changed by any Party
by properly serving notices on the other Parties informing them of the changes of
address.
23.4. In the event that a Party refuses delivery or acceptance of a notice, request or other
communication, under this Agreement, it shall be deemed that the notice was given
upon proof of the refused delivery, provided the same was sent in the manner
specified in this Agreement.
24. NON COMPETE AND NON-SOLICIT

24.1. During the term of this Agreement and for a period of 36 (thirty six) months from
46
applicable law.
the date any of the Promoters cease to be a Shareholder of the Company, they
shall not directly or indirectly through Third Parties:
(i) solicit the clients of the Company and entice business away from the Company or
any group Companies;
(ii) use the services of or make any offers of employment or contract or subcontract to
the Company’s or a Group Company’s staff or sub-contractors (whether individual or
corporate), current or former employees;
(iii) engage in any business, directly or indirectly, that is in competition with the business of
the Company or any group Company.
25. ASSIGNMENT:
The Promoter herein affirms that he hereby assigns and, to the extent any such
assignment cannot be made at present; hereby agree to assign to the Company,
without further compensation, all of the right, title and interest in and to all Intellectual
Property Rights undertaken pursuant to the business of the Company. The Promoter
provides his affirmation to execute all documents and perform all lawful acts which the
Company considers necessary or advisable to secure its rights hereunder and to carry
out the intent of this Agreement.
26. SEVERABILITY
The Parties agree that, having regard to all the circumstances, the covenants
contained herein are reasonable and necessary for the protection of the Parties and
their Affiliates. Any provision in this Agreement, which is or may become prohibited
or unenforceable in any jurisdiction, shall as to such jurisdiction, be ineffective to
the extent of such prohibition or unenforceability without invalidating the remaining
provisions of this Agreement or affecting the validity or enforceability of such
provision in the same or any other jurisdiction. Without prejudice to the foregoing,
the Parties will immediately negotiate in good faith to replace such provision with a
47
applicable law.
proviso, which is not prohibited or unenforceable and has, as far as possible, the
same legal and commercial effect as that which it replaces.
27. ENTIRE AGREEMENT

This Agreement represents the entire agreement between the Parties in relation to
the terms of the matters contained in this Agreement and shall supersede and
extinguish any previous drafts, agreements or understandings between all or any of
the Parties (whether oral or in written) relating to the subject matter herein and
shall include all schedules and amendments executed by the Parties mutually in
writing.
28. COUNTERPARTS
This Agreement has been signed in counterparts as necessary, each of which shall
be deemed to be an original, and all of which together shall constitute one and the
same instrument.
29. AMENDMENTS AND WAIVERS

Any provision of this Agreement may be amended or waived if, and only if such
amendment or waiver is in writing and signed, in the case of an amendment by each
of the Parties, or in the case of a waiver, by the Party against whom the waiver is to
be effective. No waiver by any Party of any term or condition of this Agreement, in
any one or more instances, shall be deemed to be or construed as a waiver of the
same or any other term or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by Law or otherwise afforded, will be
cumulative and not alternative.
30. CONFIDENTIALITY
Each of the Parties shall maintain the utmost confidentiality, regarding the contents
of this Agreement and the Confidential Information at all times. Provided however,
nothing contained herein shall affect the ability of the Parties to make disclosure to
48
applicable law.
any government authority or any other Person under the provisions of any law,
and/or the ability of the Parties to make disclosures to its lenders, vendors or
customers, provided however in all such circumstances, the Party who is be
required to disclose such information shall have to give prior notice to the other
Parties before making the disclosure, indicating the nature of information that is
proposed to be disclosed. Further, a Party shall not make any announcements to
the public or to any third party regarding the arrangements contemplated by this
Agreement without the prior written consent of the other Parties, provided that
none of the aforesaid Parties shall be liable for making such announcements if the
same are made in the course of business and/or as required to be disclosed by law
or regulation (including SEBI Guidelines) or pursuant to the legal process.
31. INDEPENDENT CONTRACTORS

The Parties are independent contracting parties and will have no power or authority
to assume or create any obligation or responsibility on behalf of each other.
This Agreement will not be construed to create or imply any partnership, agency or
joint venture, or employer-employee relationship.
32. FURTHER ASSURANCES

Each of the Company and the Promoters shall, at any time and from time to time
upon the written request of the Investors:
(a) promptly and duly execute and deliver all such further instruments and documents,
and do or procure to be done all such acts or things, as the Investors may
reasonably deem necessary or desirable in obtaining the full benefits of this
Agreement and of the rights and ownership herein granted; and
(b) do or procure to be done each and every act or thing which the Investors may from
time to time reasonably require to be done for the purpose of enforcing the
Investors’ rights under this Agreement.
49
applicable law.
33. BREACH
33.1. If any Shareholder commits any material breach of his or its obligations under this
Agreement and fails to remedy such breach (if capable of remedy) within 30 (thirty)
calendar days after being given notice in writing so to do by the Board or the other
Party, as may be relevant to such breach, then the Shareholder shall be required to
the extent applicable relinquish his position as a Director and employee of the
Company and any associated Company and hand over all executive responsibility as
required by the Board.
33.2. Notwithstanding anything contained anywhere in this Agreement to the contrary, in

the event any of the Promoter commits any material breach of his obligations under
this Agreement, such Promoter will be obliged to offer his shareholding in the
Company to the Investors and the Business Advisors or the other Promoters at a
discounted rate of 50% (fifty percent) of the pre-money valuation of the Subscription
Shares.
{Signature Pages Follow}
50
applicable law.
IN WITNESS WHEREOF, each of the afore named Parties has signed and executed this
Agreement, and all the original copies hereto, on the date first above written.
Name Signature
For [●]
represented by [●]
Director
Promoter: [●]
Promoter: [●]
51
applicable law.
Signature page to the Share Subscription and Shareholders’ Agreement dated [●]
2019 executed amongst the Company, the Promoters, the Investors and the Business
Advisors thereof.
Name Signature
Investor
Mr.
Advisors thereof.
52
applicable law.
Name Signature
Investor & Business Advisor
M/s
Represented by Mr.
(Director)
Advisors thereof.
Name Signature
_________________ Limited
Represented by _______________
53
applicable law.
54
applicable law.
Advisors thereof.
Name Signature
Business Advisor
[DIRECTOR]
55
applicable law.
Schedule 1
LIST OF INVESTORS
Full Name of the Investor Residential Subscription Amount

and PAN Address in INR
LIST OF BUSINESS ADVISORS

Full Name of the Business Advisor and Address
PAN
56
applicable law.
Schedule 2-Current Shareholding Pattern
Name No. of shares Percentage of

holding
57
applicable law.
Schedule 3-Proposed Shareholding on a fully diluted
basis on closing
Name No. of shares Percentage of

holding
58
applicable law.
Schedule 4- Subscription Schedule
Name Subscription Number of CCPS with a par

Money (upto) value of INR[●]/- and a
premium of INR[●]/-
Total
59
applicable law.
Schedule 5 –Payment Instructions
Beneficiary Account Number:

Beneficiary Name:
Beneficiary Bank:
IFSC CODE:
Purpose: Subscription of Shares
60
applicable law.
Schedule 6 –Representations and Warranties
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE

PROMOTERS
1. CORPORATE EXISTENCE AND POWER
The Company is (a) duly organised, validly existing and in good standing under
the laws of India; (b) has all requisite power and authority to enter into and
execute contracts in its own name.
2.AUTHORISATION, NO CONTRAVENTION
The execution, delivery and performance by the Company of this Agreement and
the transactions contemplated therein (a) have been duly authorised by all
necessary corporate actions of the Company (b) do not violate, conflict with or
result in any breach, default or contravention of (or with due notice or lapse of
time or both would result in any breach, default or contravention of), or the
creation of any encumbrance under, any contractual obligation of the Company
or any Requirement of Law applicable to the Company; and (c) do not violate any
Orders against, or binding upon, the Company or to which any of the Company’s
assets are subject.
3. BINDING EFFECT
This Agreement has been duly executed and delivered by the Company and the
Promoters, and constitute the legal, valid and binding obligations of the
Company and the Promoters, enforceable against the Company and the
Promoters in accordance with the terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganisation, fraudulent conveyance or
61
applicable law.
transfer, moratorium or similar laws affecting the enforcement of creditors’ rights
generally and by general principles of equity relating to enforceability.
4 CORPORATE RECORDS
The statutory books, minute books, register of members and all books of account
of the Company have been properly and accurately maintained in accordance
with any applicable Requirement of Law, are written up-to-date, contain full and
accurate records of all resolutions passed by the directors and the shareholders
of the Company, all issuances and transfers of shares or other securities of any
member of the Company and neither the past nor present members of the
Company have received any notice of any application or intended application for
rectification of its register of members. The Company and its Promoters have
complied with the Requirement of Law applicable to it in respect of corporate
records, including the provisions as to filing of returns, resolutions and other
documents with the Company’s regulatory authority in such jurisdiction.
5. GOVERNMENT AUTHORISATION, THIRD PARTY CONSENTS
No governmental approval, permit and no consent, approval, compliance,

exemption, authorisation, waiver or other action by, or notice to, or filing with,
any government authority or any other person, and no lapse of a waiting period
under any Requirement of Law, including consents, releases and waivers from
any lenders to or creditors of the Company that are required, in order to enable
such Person to execute and deliver this Agreement to which it is a party, is
necessary or required in connection with the execution, delivery or performance
by, or enforcement against, the Company of the transactions contemplated
therein.
6. LITIGATION
There are no contractual or tortious or any other claims pending against the
Company and the Company has not received any notice of any claim (including
Claims for breach or alleged breach of restrictive covenants or defamation) that
62
applicable law.
has been threatened, at law, in equity, in arbitration or before any government
authority against the Company.
7. INSOLVENCY
No order has been made and no resolution has been passed for the winding up
of the Company or for a provisional liquidator to be appointed in respect of the
Company and to the best knowledge of the Company and the Promoters, no
petition has been admitted and no meeting has been convened for the purpose
of winding up of the Company. No receiver has been appointed in respect of all
or any of the assets of the Company.
8. OUTSTANDING LOANS AND REIMBURSEMENTS
The Company has no outstanding loan, expense reimbursement and others due to the
Promoters.
9. COMPLIANCE WITH LAWS
(a) The Company is in compliance with every applicable Requirement of Law and
all Orders issued by any court or Government Authority against the Company
in all respects. (b) (i) The Company has all licenses, permits and
approvals of the Government Authorities (the Permits) that are necessary
for the conduct of the business of the Company;
(ii) such Permits are either in full force and effect or applications seeking their extension
have been filed in a timely manner, and no suspension, revocation or
cancellation of any of them is threatened which, if adversely determined,
may have a material adverse effect on the assets, business, properties,
operations and condition (financial or otherwise) of the Company;
(iii) no violations are or have been recorded in respect of any Permit; and
(iv) no notice has been received by the Company from any Government Authority
requiring a licence, permit or approval that is not a Permit.
63
applicable law.
(c) The Company has not been subject to any action, suit, proceeding,
arbitration, hearing, investigation, complaint, claim, demand, lawsuit, notice,
or other procedure with respect to the violation of any competition law.
10. CAPITALISATION
(a) At the time of Closing, there are no options, warrants, conversion privileges,
subscription or purchase rights or other rights presently outstanding to purchase
or otherwise acquire (i) any authorised but unissued or unauthorised shares of
the Company’s share capital, except ESOP, or (ii) any other securities of the
Company and there are no commitments, contracts, agreements, arrangements
or understandings by the Company to issue any equity shares or other Securities
of the Company.
(b) As of the Closing Date, all of the issued and outstanding equity shares are duly
authorised, validly issued, fully paid, and were issued in compliance with every
applicable Requirement of Law and the Articles.
(c) The Shares are duly and validly authorized.
11. NO DEFAULT OR BREACH, CONTRACTUAL OBLIGATIONS
With respect to each agreement relating to the Company provided to the Investor Group
for the purpose of legal, financial, business and commercial due diligence: (i) the
agreement is legal, valid, binding, enforceable, and in full force and effect; and (ii)
the agreement will continue to be legal, valid, binding, enforceable, and in full
force and effect on identical terms following the consummation of the
transactions contemplated by the Transaction Documents.
12. AUDITED FINANCIAL STATEMENTS
The audited financial statements of the Company are true and fair as per the India GAAP
and other applicable accounting standards.
13. TAXES
(a) The Company is in compliance with the applicable tax laws.
64
applicable law.
(b) No notice has been received from any tax authority claiming any
Encumbrances for Taxes on the assets of the Company.
14. INTELLECTUAL PROPERTY
(a) All Intellectual Property Rights (IPR) used by the Company in connection
with its business are to be registered (so far as they are capable of
registration) in the sole name of the Company.
(b) To the best of the Company’s knowledge, all IPR owned by third parties
and used by the Company is the subject of binding and enforceable
licences from third parties in favour of the Company;
(i) of which no notice to terminate has been received;
(ii) all parties to which have fully complied with all obligations in those
licences;
(iii) in relation to which no disputes have arisen or are foreseeable; and
(iv) in relation to which, no circumstances exist which might lead to their

modification or termination.
(c) The Company has not granted and is not obliged to grant any licences or
assignments (whether express or implied) under or in respect of any IPR
owned or used by the Company. The Company has not disclosed and is
not obliged to disclose to any person (other than an employee or
consultant under enforceable obligations of confidence) any confidential
or secret material owned or used by the Company.
(d) The Company has not received notice of any infringement by it of any
intellectual property rights of any third party and none of the Company’s
business activities infringe the intellectual property rights of any third
party.
(e) There is and has been no infringement of the IPR owned by the Company.
65
applicable law.
(f) All fees for the grant or renewal of registered IPR owned by the Company
have been paid.
(g) All know-how owned, used or exploited by the Company is, to the extent
reasonably practicable, recorded in writing and has been kept secret and
confidential and has not been disclosed to third parties.
(h) To the best of the Company’s knowledge, all persons who are or have
been engaged by the Company, whether as a consultant or an employee,
in relation to any of its products or software have either assigned all rights
they may have in relation to the products and/or software to the Company
or are engaged under contracts which require them to transfer any IPR
developed (whether inside or outside the course of their employment) to
the Company, and none of the processes, products or activities of the
Company give rise to a liability to pay compensation or fees of any sort to
persons who are or have been engaged by the Company, whether as a
consultant or an employee.
(i) Every agreement entered into by the Company for assigning, licensing or
granting of use of any of its IPR contains adequate provisions to safeguard
the right of the Company to own and exploit the IPR that is the subject
matter of such agreement.
15. CUSTOMER RELATIONS
No notice has been received by the Company which has threatened termination,
cancellation or limitation of, or any adverse modification or change in the
business relationship of the Company, with any customer or supplier or any
group of customers or suppliers. To the knowledge of the Company, there exists
no present condition or state of fact or circumstances that would materially
adversely affect the assets, business, properties, operations and condition
(financial or otherwise) of the Company or prevent the Company from
conducting such business relationships or such business with any such customer,
66
applicable law.
supplier or group of customers or suppliers in the same manner as are presently
conducted by the Company.
16. INSURANCE
There are no insurance policies held by or on behalf of the Company.
17. DISCLOSURE
This Agreement and the documents and certificates furnished to the Investors by the
Company do not contain any untrue statement of a material fact or omit to state
a material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which they were made, not
misleading.
18. RELATED PARTY CONTRACTS
All arrangements, agreements or obligations (whether legally enforceable or not)

between the Company with any officer, director, shareholder or other interested
party or any other party related, directly or indirectly to any of them, are on a
commercial and an arm’s length basis.
19. BINDING AUTHORITY
This Agreement constitutes valid, legally binding and enforceable obligations of the
Company. No statute, law, rule or regulation or any order of any authority or
Government bars the Company from issuing and allotting the Equity Shares to
the Investors, as envisaged herein.
20. SUBSIDIARY COMPANIES
The Company does not have any subsidiary company and does not own or control,
whether directly or indirectly, nor does it have any business interest in any other
company, limited or unlimited, partnership, sole proprietorship or other entity.
67
applicable law.
21. INFORMATION PROVIDED BY THE COMPANY TO THE INVESTORS
21.1 All information, documents and statements given or provided by the Company to
the Investors or any of its advisers are true and fair in all respects on the dates
such information, documents and statements were given or provided.
21.2 The Company has not omitted to give or provide any information, documents or
statements to the Investors or its advisers, which would make any information,
document or statement given or provided to the Investors or its advisers
materially misleading.
Schedule 7 - Deed Of Adherence
The DEED OF ADHERENCE made on the [●] day of _______________of the year _____.
BY:
[Name of New Shareholder] (the "New Investor").
RECITALS:
A. On or about [●], (the “Company”), (“the Investors”), _______ (“___”),(“the Promoters”),
& (the “Business Advisors”) (together, the “Shareholders”) entered into a Share
Subscription and Shareholders agreement (the "Agreement").
B. The Agreement forms a part of this Deed and is attached hereto as Exhibit A.
C. The Shareholders wish to have transferred to it [number] [type] shares (the

"Shares") in the capital of the Company from [name] (the "Old Investor") and in
accordance with the Agreement has agreed to enter into this Deed.
NOW THIS DEED WITNESSES as follows:
1. Interpretation: In this Deed, except as the context may otherwise require, all
words and expressions defined in the Agreement shall have the same meanings
68
applicable law.
when used herein.
2. Undertaking: The New Investor hereby undertakes and covenants to the

Company and to all other Persons who are at present or who may hereafter
become bound by the Agreement to adhere to and be bound by all the duties,
burdens and obligations of a Shareholder holding the same class of shares as the
Shares imposed pursuant to the provisions of the Agreement and all documents
expressed in writing to be supplemental or ancillary thereto as if the New Investor
had been an original party to the Agreement since the date thereof.
3. Enforceability: Each existing Shareholder and the Company shall be entitled to

enforce the Agreements against the New Investor, and the New Investor shall,
subject to the Agreements, be entitled to all rights and benefits of the Shareholders
under the Agreements in each case as if the New Investor had been an original
party to the Agreements since the date thereof.
4. Governing Law: This Deed of Adherence shall be governed by and construed in

accordance with the laws of India.
IN WITNESS WHEREOF, this Deed of Adherence has been executed as a deed on the
date first above written.
SIGNED, SEALED AND DELIVERED by [NEW INVESTOR]
in the presence of:
Name: [ ]
69
applicable law.
Schedule 8- Anti Dilution Protection (Broad Based
Weighted Average)
A. Relevant Calculations:
New or Adjusted Conversion Price = Existing Conversion Price * (A + B) / (A + C),
Where:
A = Number of Equity Shares deemed to be outstanding immediately prior to any such
issuance of New Securities on a Fully-Diluted Basis including any Equity Shares to
be issued under any ESOP or employee stock purchase plan approved by the
Board,
B = Aggregate purchase consideration received by the Company with respect to any

such issuance of New Securities divided by the then-effective Existing Conversion
Price, and
C = Number of New Securities issued.
70
applicable law.
B. In performing the foregoing calculations, the following provisions shall be
applicable:
(i) In the case of the issuance of new shares (Current Round) for cash, the
aggregate consideration shall be deemed to be the amount of cash paid
therefore before deducting therefrom any discounts, commissions or placement
fees payable by the Company to any underwriter or placement agent in
connection with the issuance and sale thereof.
(ii) In the case of the issuance of new shares for a consideration in whole or in part
other than cash, the consideration other than cash shall be deemed to be the
fair market value thereof, as determined by one of the internationally reputed
audit firms appointed by the Investor Group at the cost of the Company.
(iii) In the case of the issuance of options to purchase or rights to subscribe for
Equity Shares, securities by their terms convertible into or exchangeable for
Equity Shares, or options to purchase or rights to subscribe for such convertible
or exchangeable securities:
a. the aggregate maximum number of Equity Shares deliverable upon exercise

of such options to purchase, exercise of rights to subscribe for Equity Shares
or conversion of or in exchange for any such convertible exchangeable
securities, shall be deemed to have been issued at the time such options or
rights were issued and for a consideration equal to the consideration
(determined in the manner provided above), if any, received by the Company
upon the issuance of such options or rights plus the exercise price provided
in such options or rights for the Equity Shares covered thereby;
b. on any increase in the number of shares or decrease in exercise price of

Equity Shares deliverable upon exercise of any such options or rights or
conversions of or exchanges for such securities, other than a change
resulting from the anti-dilution provisions thereof, the C shall be readjusted
retroactively to give effect to such increase or decrease and additional Equity
Shares shall be issued to the Investor Group; and
71
applicable law.
c. no further adjustment shall be made as a result of the actual issuance of
Equity Shares on the exercise of any such rights or options or any conversion
or exchange of any such securities.
(iv) All calculations of the C shall be made to the nearest one-hundredth of a cent.
The Company shall not issue any fractional Equity Shares, but shall round up to
the nearest whole share.
72
applicable law.

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SHAREHOLDERS AGREEMENT

[●] PRIVATE LIMITED

1. DEFINITIONS AND INTERPRETATION 5

THIS SHARE SUBSCRIPTION AND SHAREHOLDERS AGREEMENT (the “Agreement”) is made

(D) PROMOTERS, as detailed below, of the FOURTH PART:

1. The Company is in the business of [●]. (“Business”).

3. Accordingly, the Investors have agreed to invest an aggregate amount of up to INR

8. The current directors of the Company are [●] and [●].

NOW, THEREFORE, IN CONSIDERATION OF THE REPRESENTATIONS, PROMISES AND

1. DEFINITIONS AND INTERPRETATION

1.1.3. “Affiliate” in relation to a Person

b) Such Promoter has committed an act of fraud, wilful misconduct, dishonesty,

d) Such promoter has engaged in an act of moral turpitude or misconduct;

1.1.11. “Charter Documents” mean the memorandum of association and articles of

1.1.14. “Compulsorily Convertible Preference Shares” or “CCPS” means fully and

1.1.32. "Intellectual Property" includes ideas, concepts, creations, discoveries, inventions,

1.1.36. “Liquidation Event”shall mean the following:

i. Commencement of any proceedings for the voluntary or involuntary winding up of

ii. The consummation of a consolidation, merger, reorganization or other similar

iv. Occurrence of a Change in Control; or

v. The sale of, transfer of or creation of an Encumbrance of any nature whatsoever,

1.1.39. “Memorandum” means the memorandum of association of the Company and as

1.1.40. “Person” means and includes an individual, proprietorship, partnership,

1.1.43. “Registrar of Companies” or “ROC” mean the Registrar of Companies having

1.1.46. “Reserved Matters” means matters as listed in Clause 12.2;

1.1.51. “Shares” mean Equity Shares and/or CCPS of the Company;

1.1.61. “Transfer” (including the terms “Transferred by”, “Transferring” and

1.2. INTERPRETATION. Unless the context of this Agreement otherwise requires:

a. words of any gender include each other gender;

e. the phrases “ordinary course of business” and “ordinary course of business

i. references to recitals, clauses, sub-clauses, sections, sub-sections, schedules,

j. any reference to any statute or statutory provision shall include:

i. all subordinate legislation made from time to time under that

ii. such statute or provision as may be amended, modified, re-enacted or

k. any reference to an agreement, instrument or other document (including a

m. time is of the essence in the performance of the Parties’ respective obligations;

r. References to the knowledge, information, belief or awareness of any Person

3. MATTERS RELATING TO THE SUBSCRIPTION OF SHARES BY

3.2. PAYMENT OF SUBSCRIPTION MONEY

3.3. CONDITIONS PRECEDENT TO CLOSING

3.3.2 The Conditions Precedent to Closing shall be the following:

3.4 CLOSING AND ALLOTMENT OF SHARES

3.5 CONDITIONS SUBSEQUENT TO CLOSING

5. CONVERSION OF THE COMPULSORILY CONVERTIBLE PREFERENCE

6.3 RIGHT OF FIRST REFUSAL.

6.4 TAG ALONG RIGHT

6.5 PRE-EMPTIVE RIGHT

6.6 PROMOTERS’ RIGHTS – RIGHT TO PURCHASE

8. INFORMATION AND REPORTING

a. Quarterly (un-audited) financial statements as soon as practicable, but in any

b. Annual (audited) financial statements as soon as practicable, but in any event

c. Annual Operating Plan (including quarterly budget containing an income

9. VISITATION AND INSPECTION RIGHTS

10. ANTI-DILUTION PROTECTION

11. BOARD OF DIRECTORS

12. RESERVED MATTERS

(f) entering into, variation or termination of any material agreement or arrangement

(h) removal of the Investors Director;

(j) amendments to the memorandum of association, articles of association and other

(n) mergers, acquisitions, change of voting control, amalgamations, consolidations,

(o) appointment or change of the statutory or internal auditors of the Company;

(q) approval of an any exit opportunity;

(r) determining the pricing, and place/stock exchange of a Qualified IPO;