TEMPLATE FOR A SHARE SUBSCRIPTION AGREEMENT

SHARE SUBSCRIPTION AGREEMENT

This SHARE SUBSCRIPTION AGREEMENT is entered into at [●], on this [●] day of [●]
BY AND BETWEEN
[●], a private limited company duly organized and existing in accordance with the laws of India, having its
registered office at [●] (hereinafter referred to as the “Company”, which term shall include its successors,
liquidators and permitted assigns), of the FIRST PART;
AND
[●], [son/daughter] of Mr. [●], having Indian Passport bearing no. [●], and having [his/her] permanent
place of residence at [●] (hereinafter referred to as the “Investor”, which term shall include [his/her]
successors, administrators and assigns) of the FINAL PART;
(The Company and the Investor are hereinafter collectively referred to as “Parties” and severally as
“Party”)
WHEREAS, the Company is engaged in the Business of [●];
WHEREAS, as of the Agreement Date (as hereinafter defined), the Company has an authorized share
capital of INR [●], divided into [●] equity shares of INR [●] each and a total issued and paid-up equity
share capital of INR [●], divided into [●] equity shares of INR [●] each;
WHEREAS, [●], being a company duly organized and existing in accordance with the laws of India,
having its registered office at [●] (hereinafter referred to as the “Promoter Company”), is the legal
and beneficial owner of [●]% ([●] percent) of the total issued, subscribed and paid-up share capital of
the Company and controls the management and operations of the Company.
WHEREAS, the Promoter Company and Investor have simultaneous to the execution of this Agreement
entered into a loan agreement dated [●] (“Loan Agreement”), in terms of which, the Investor has
provided to the Promoter Company a loan aggregating to INR [●] on the terms and conditions contained
therein;
WHEREAS, Company has agreed to issue to the Investor and the Investor has agreed to subscribe to
Investor Equity Shares (as defined hereinafter);
AND WHEREAS, the Company and the Investor are entering into this Agreement to record the terms and
conditions reflect their agreement and understanding in relation to the Investor Equity Shares.
Now, therefore, in consideration of the foregoing and the covenants and promises of the contained herein
and other consideration, the sufficiency and adequacy whereof are hereby acknowledged, and intending to
be legally bound, the parties agree as follows:
Definitions
In this Agreement, unless repugnant or contrary to the context hereof, the following terms, when
capitalised (and their cognate expressions), shall have the meanings assigned herein:
1. “Agreement” means this Share Subscription Agreement, including all schedules and annexures
attached hereto, and any subsequent written modifications agreed to by and between the Parties in
terms hereof;
2. “Agreement Date” means the date on which this Agreement is signed and executed by the Parties;
3. “Business” means the business carried on by the Borrower from time to time inter alia including
the [●];
4. “Company” has the meaning assigned to such term in paragraph 1 of the description of Parties
hereinabove;
5. “Financing Documents” means the Loan Agreement and includes all any other agreement or
document which the Company and the Investor agree to designate as a ‘Financing Documents’;
6. “Financial Year” means the financial year of the Company, which begins on April 1st of a
calendar year and ends on March 31st of the next calendar year;

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7. “INR” or “Rupees” means Indian Rupees, the lawful currency of the Republic of India;
8. “Investor” has the meaning assigned to such term in paragraph 2 of the description of Parties
hereinabove;
9. “Investor Equity Shares” means Equity Shares issued by the Company to Investor, in accordance
with the terms and conditions contained in this Agreement;
10. “Loan” means a loan amount of INR [●] million, granted and disbursed by the Investor to the
Promoter Company, in accordance with the terms and conditions contained in the Loan Agreement;
11. “Third Party” means any Person other than the Parties;
12. “Transaction Documents” means, collectively, this Agreement and the Financing Documents.

Clause 1 - Subscription of Equity Shares

1.1. Subject to and upon the terms and conditions set forth herein, on the Agreement Date, Investor shall
subscribe for, and the Company shall issue and allot to Investor, the Investor Equity Shares as set
out below:
1.1.1. Investor shall subscribe for the Investor Equity Shares for an aggregate consideration of the
Investor Equity Shares Subscription Price; and
1.1.2. Upon the completion of the issue and allotment of the Investor Equity Shares subscribed
pursuant to Clause , Investors shall hold approximately [●] per cent of the total issued and
paid-up equity share capital of the Company.
1.2. The shareholding structure upon the subscription of the Investor Equity Shares pursuant to Clauses
shall be as set out in Annexure 2.
1.3. Action on the Agreement Date: On the Agreement Date, the following actions shall be undertaken:
1.3.1. Investor shall give instructions to its bankers to remit the Investor Equity Shares Subscription
Price to the bank account designated by the Company as advance towards subscription of the
Investor Equity Shares;
1.3.2. The Company shall hold a meeting of its board of directors (“Board”), at which the following
shall be resolved in Agreed Form:
1. the Investor shall be allotted and issued the Investor Equity Shares; and
2. the name of the Investor be entered in the register of members maintained by the
Company as the holder of such Investor Equity Shares.
1.3.3. The Company shall duly issue and deliver to the Investor the certificate(s) representing the
Investor Equity Shares.
Clause 2 - Terms and Conditions of Issue of Investor Equity Shares
2.1. Income:-The Investor Equity Shares shall be entitled to dividend, to be paid in respect of each
financial year or other accounting period of the Company.
2.2. Voting and General Meetings:-
1. The Investor, as holders of the Investor Equity Shares shall, by virtue of and in respect of
their holdings of Investor Equity Shares, have the right to receive notice of, attend, speak and
vote on a resolution at a general meeting of the Company.
2. Whenever the Investor is entitled to vote at a general meeting of the Company, upon any
resolution proposed at such a general meeting, on a show of hands, the Investor shall have
one (1) vote, and on a poll the Investor or his proxy shall be entitled to exercise the number
of votes which he would have been entitled to exercise on a fully diluted basis.
Clause 3 - Representations, Warranties and Undertakings
In order to convince and induce the Investor to enter into this Agreement and subscribe to the Investor
Equity Shares, the Company makes the following representations, warranties and undertakings:
3.1. Standing:-The Company is a private company limited by shares duly formed, validly existing and
in good standing under the laws of India.

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3.2. Requisite Authority:-The Company has all requisite power and authority to enter into the
Transaction Documents to which it is a party, and to undertake the transactions contemplated
therein.
3.3. Consents:-No permit, application, notice, approval, qualification, waiver from or authorization of,
or registration with, any Governmental Authority or any Third Party is required to be made or
obtained by the Company in connection with the execution, delivery and performance of the
Transaction Documents.
3.4. Compliance with Applicable Laws:-The Company is in compliance with all Applicable Laws and
has not been in material conflict with or in alleged or actual violation or breach or default under any
material law applicable to the Company.
3.5. Accounts & Financial Statements:-The Accounts and the Management Accounts shall present
fairly the financial position of the Company as at the dates of the statements reflected therein, and
the results of the operations for the period covered thereby.
3.6. Taxes:-Company has filed on its behalf all tax returns which are required to be filed (“Returns”),
and has paid, or made provision for the payment of, all taxes with respect to the periods, property or
transactions covered by said Returns, or pursuant to any assessment received by it.
3.7. Disclosure:-All documents, reports or other information pertaining to the Company that have been
furnished to the Investor by or on behalf of the Company, taken as a whole, are true and correct in
all material respects and do not contain any untrue statement of a material fact.
Clause 4 - Affirmative Covenants
The Company hereby covenants and agrees that, in the case of the covenants described below:
4.1. Information Covenants:-The Company shall furnish to Investor:
1. within [] days after the end of a Financial Year, Accounts of Company audited by its
auditor;
2. within [] days after the end of the 2nd and the 4th quarter of every Financial Year, the
Management Accounts of Company;.
3. from time to time, such other information or documents (financial or otherwise) with respect
to the Company, as Investor may reasonably request in writing; and
4. information provided to its shareholders at the same time as it is provided to them.
4.2. Books, Records and Inspections:-The Company will keep proper books of record and account in
which full, true and correct entries shall be made of all dealings and transactions in relation to the
Business and its activities; and will permit representatives of the Investors at its expense to visit and
inspect any of Company’s properties.
4.3. Change in Shareholding:-There shall not be any direct/ indirect change in shareholding of the
Company, which results in the Company not being part of the Group Company, and/ or [●] holding
less than [●] shares in the Company;
4.4. Compliance with Applicable Laws:-The Company will comply with all Applicable Laws in
respect of the conduct of the Business.
Clause 5 - Negative Covenants
5.1. Security:-The Company will not create, incur, maintain, assume or suffer to exist any security upon
or with respect to any property of Company, whether now owned or hereafter acquired, or sell any
such property subject to an understanding or agreement, contingent or otherwise, to repurchase such
property, or assign any right to receive income or permit the filing of any financing statement under
any recording or notice statute.
5.2. Consolidation, Merger, Sale of Assets, Issuance of New Shares:-The Company will not wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or consolidation, or convey,
sell, lease or otherwise dispose of all or a substantial part of its property.
5.3. Advances, Investments, Loans and Guarantees:-The Company will not directly or indirectly,
lend money or credit, make advances or provide guarantees or indemnities to any other Person or
purchase or acquire any stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any other Person, or purchase or own a futures contract or otherwise become

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 liable for the purchase or sale of currency or other commodities at a future date in the nature of a
futures contract, or discount any bills for any Person.
5.4. Modifications to Constitutional Documents:-The Company will not amend, and will cause to be
amended, any of its Constitutional Documents.
5.5. Business:-The Company will not engage in any business other than the Business.
5.6. Subsidiaries:-The Company shall not incorporate any new subsidiaries or, other than in the
ordinary course of the Business, enter into any unincorporated joint venture or other similar
arrangements with any Person.
Clause 6 - Events of Default and Remedies
6.1. Events of Default:-The occurrence of any of the following events or circumstances shall constitute
an “Event of Default” hereunder:
1. the Promoter Company fails to repay the Loan and/ or interests or any other fees and costs, if
any, due and payable under the Financing Documents;
2. any representation or warranty of the Company made in the Transaction Documents, or in any
certificate or other writing delivered pursuant to the Transaction Documents, proves to have
been incorrect in any material respect when made or reaffirmed;
3. the Company fails to perform or observe any covenant or agreement contained in the
Transaction Documents to which it is a party, or admits its inability to, or intends not to,
perform one or more of its obligations under Transaction Documents;
4. any non-compliance by the Company with any final judgement entered against it.
6.2. Other Remedies:-Upon the occurrence and during the continuation of an Event of Default, the
Investors may exercise any or all rights and remedies at law or in equity, including without
limitation or prejudice to the Inventor’s other rights and remedies, any and all rights and remedies
available under any of the Transaction Documents.
Clause 7 - Miscellaneous
7.1. Costs and Expenses:-The Company shall pay within [] business days after demand, all reasonable
costs and expenses of the Investor in connection with any and all amounts which the Investor has
paid relative to curing any Event of Default under this Agreement.
7.2. Indemnity:-The Company shall pay, indemnify, and hold the Investor and each of its officers,
directors, employees, counsel, agents and attorneys-in-fact and Affiliates harmless from and against
any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits,
costs, charges, expenses or disbursements of any kind or nature whatsoever.
7.3. Assignment:-The Company shall not assign or otherwise transfer any of its rights under this
Agreement or any of the other Transaction Documents to any Third Party. The Investor shall have
the right to assign this Agreement including all rights and obligations hereunder, either by way of
novation or otherwise, to any Third Party, without the consent of the Company; provided that if
such a consent from the Company is required as per Applicable Law, then the Company shall give
such consent, without any demur or protest.
7.4. No Waiver:-There shall be a waiver of any Provision of this Agreement unless such waiver is
evidenced in writing and signed by the waiving Party.
7.5. Severability:-Any provision hereof which is 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 hereof and without affecting the validity or enforceability of
any provision in any other jurisdiction.
7.6. Governing Law and Jurisdiction:-The validity, construction and performance of this Agreement
or the other Transaction Documents shall be governed by the laws of the Republic of India, and the
courts at [] shall have exclusive jurisdiction.
7.7. Dispute Resolution
1. This Agreement shall be governed by the laws of the [Place].

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 2. If any difference or dispute shall arise between the Parties hereto as to the construction or true
intent and meaning of any of the terms and conditions herein contained or as to any payment to be
made in pursuance hereof or as to any other matter arising out or as to any other matter arising out
of or connected with or incidental to these presents or as to the rights, duties and obligations of
either Party, such difference or dispute as and when the same arise, shall be mutually settled by
negotiation or conciliation as per the Agreement between the Parties. If the said dispute or
difference could not be settled by conciliation within [number of days] days of having been raised
by one of the Parties to this Agreement, it shall be referred to a sole arbitrator to be appointed by
the Parties with mutual consent. If there is a difference and lack of consensus on the nomination
of a sole arbitrator, then each of the Parties would nominate their respective arbitrators to form a
three-member arbitral tribunal. The arbitration shall be conducted in accordance with the
Arbitration and Conciliation Act, 1996. The venue of such arbitration will be [Place], and the
language of the arbitration shall be [Language]. All disputes pertaining to this Agreement shall be
subject to the courts in [Place] alone.

IN WITNESS WHEREOF THE PARTIES HERETO HAVE SET AND SUBSCRIBED THEIR
RESPECTIVE HANDS TO THESE PRESENTS ON THE DAY, MONTH AND YEAR HEREIN
WRITTEN:
SIGNED AND DELIVERED BY [NAME OF COMPANY B]
BY THE HAND OF MR./ MS [●],
AUTHORISED AS PER BOARD RESOLUTION
PASSED AT BOARD MEETING DATED [●]
ON THE [●] DAY OF [●]
IN THE PRESENCE OF:
WITNESS:
[●]
SIGNED AND DELIVERED BY [NAME OF THE INVESTOR].
BY THE HAND OF MR./ MS [●],
IT’S AUTHORISED REPRESENTATIVE
ON THE [●] DAY OF [●]
IN THE PRESENCE OF:
WITNESS:
[●]
Annexure 1
Present shareholding structure of the Company.
Annexure 2
Post-closing shareholding structure of the Company.
[NOTE: This is a draft Share Subscription Agreement entered between two companies in India. It may be
more detailed depending upon the agreed terms, conditions and arrangement between the parties and also
the status and jurisdiction of the parties. Each agreement has to be drafted keeping in view the
peculiarities involved in each such situation in order to avoid any conflict of interest in the future or any
legal obligations.]