Shareholders' agreement

SHAREHOLDERS' AGREEMENT

This Shareholders' Agreement (the "Agreement") is executed at Place of execution on this Execution date (the "Effective Date")

BY AND AMONG

Company name, a company incorporated under the Companies Act, 2013, having its registered office at Company registered office, bearing Corporate Identification Number Company CIN (hereinafter the "Company", which expression shall include its successors and permitted assigns)

AND

Promoter shareholder name, an individual residing at Promoter shareholder address, holding PAN number (hereinafter the "Promoter")

AND

Investor name, a Investor entity type having its registered office at Investor address, holding Investor CIN or PAN (hereinafter the "Investor")

AND

Other shareholder name, Other shareholder address (hereinafter the "Other Shareholder")

The Promoter, the Investor and the Other Shareholder are hereinafter individually a "Shareholder" and collectively the "Shareholders". The Company, the Shareholders and each other Person who may hereafter become a shareholder of the Company may be referred to as the "Parties" and individually a "Party".

RECITALS

NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS CONTAINED HEREIN, THE PARTIES AGREE AS FOLLOWS:

1. DEFINITIONS AND INTERPRETATION

1.1 In this Agreement, unless the context otherwise requires, the following terms shall have the meanings set out below:

1.2 Words denoting the singular shall include the plural and vice versa; references to a statute include amendments, re-enactments and rules made thereunder; headings are for convenience only and shall not affect interpretation.

2. CAPITAL STRUCTURE

2.1 As on the Effective Date, the issued, subscribed and paid-up share capital of the Company is Paid-up capital divided into Total number of shares Shares, held in the following proportions:

2.2 The Company shall maintain a capitalisation table in the form agreed by the Board and shall not allot or issue any Shares or securities convertible into Shares except in compliance with this Agreement.

3. REPRESENTATIONS AND WARRANTIES

3.1 Each Party represents and warrants to the other Parties that: (a) it has full power and authority to execute this Agreement and perform its obligations hereunder; (b) this Agreement constitutes a legal, valid and binding obligation enforceable against it; (c) the execution and performance of this Agreement does not violate any law, agreement, order or judgment binding upon it; and (d) all information provided by it to the other Parties is true and complete in all material respects.

3.2 The Promoter and the Company jointly and severally represent and warrant to the Investor that: (a) the Company is duly incorporated and validly existing under the Act; (b) the financial statements of the Company as at Financial statements date are true and fairly represent the state of affairs of the Company, subject to the exceptions disclosed in Schedule Disclosure schedule number; (c) the Company holds all IP Rights material to its business; (d) there is no litigation, arbitration or investigation pending or threatened against the Company other than as disclosed; and (e) the Company is compliant with applicable laws, including the applicable labour laws and tax laws.

4. GOVERNANCE AND BOARD OF DIRECTORS

4.1 The Board shall consist of Board size directors, comprising: (a) Promoter nominee directors director(s) nominated by the Promoter; (b) Investor nominee directors director(s) nominated by the Investor; and (c) Independent directors independent director(s) appointed by agreement of the Promoter and the Investor.

4.2 Each Party shall procure that its nominees are appointed to the Board and shall vote in favour of such appointment at any general meeting or by circular resolution, as applicable.

4.3 The quorum for a meeting of the Board shall be a majority of the directors then in office, including at least one nominee director of each of the Promoter and the Investor, and no business shall be transacted in the absence of a duly convened quorum.

4.4 If a nominee director fails to attend Consecutive board meeting absences consecutive Board meetings without leave of absence, the appointing Party shall nominate a replacement director.

5. RESERVED MATTERS

5.1 Notwithstanding anything contained in this Agreement, the Company and the Board shall not, and each Party shall procure that the Company and the Board shall not, take any of the following actions without the prior written approval of the Investor (the "Reserved Matters"):

6. INFORMATION AND INSPECTION RIGHTS

6.1 The Company shall deliver to the Investor: (a) unaudited monthly management accounts within Monthly accounts delivery days days of the end of each month; (b) audited annual financial statements within Annual accounts delivery days days of the end of each financial year; (c) the annual business plan and budget at least Budget delivery days days prior to the commencement of each financial year; and (d) prompt notice of any litigation, regulatory action, or event likely to have a material adverse effect on the Company.

6.2 The Investor and its professional advisers may, upon reasonable prior written notice and without unreasonable disturbance to the business of the Company, inspect the books of account, records and premises of the Company during business hours.

7. RESTRICTIVE COVENANTS AND NON-COMPETE

7.1 The Promoter shall not, during the term of this Agreement and for a period of Non-compete period thereafter, directly or indirectly engage in, own, finance or be employed or associated with any business that competes with the business of the Company within Non-compete territory, except through the holding of Shares in the Company.

7.2 The Promoter shall devote substantially the whole of the Promoter's professional time and attention to the business of the Company and shall not, without the prior approval of the Board, hold any directorship or office in any other entity, other than passive shareholding of less than Passive holding limit in a listed company.

7.3 The Parties acknowledge that the covenants in this Clause 7 are reasonable and necessary for the protection of the legitimate business interests of the Company and the Investor.

8. CONFIDENTIALITY

8.1 Each Party shall keep confidential all non-public information relating to the Company or any other Party obtained in connection with this Agreement, shall use such information solely for the purposes of this Agreement, and shall not disclose it to any third party except (a) to its professional advisers bound by confidentiality obligations; (b) with the prior written consent of the Company; or (c) as required by law, regulation, court order or any governmental or regulatory authority.

8.2 The obligations in this Clause 8 shall survive the termination or expiry of this Agreement for a period of Confidentiality period.

9. RESTRICTIONS ON TRANSFER OF SHARES

9.1 Lock-in. No Shareholder shall Transfer any Shares for a period of Lock-in period from the Effective Date, except with the prior written consent of the Investor, except pursuant to Clauses 9.2 to 9.6, or as required under any applicable law.

9.2 Right of First Refusal. If any Shareholder (the "Selling Shareholder") wishes to Transfer any Shares (the "Offer Shares"), it shall first offer the Offer Shares in writing to the other Shareholders in proportion to their existing shareholding at a price and on terms no less favourable than those proposed (the "Third Party Offer"). The other Shareholders shall have Right of first refusal window days to accept the offer, failing which the Selling Shareholder may Transfer the Offer Shares to the proposed third party at a price not less than and on terms no less favourable than the Third Party Offer, within ROFR completion window days.

9.3 Tag-Along. If the Promoter proposes to Transfer Shares to any third party enabling such third party to acquire control of the Company, the Investor shall have the right, exercisable by notice within Tag-along notice window days, to require such third party to purchase from the Investor, at the same price, pro-rata on the same terms, such number of Shares as the Investor may specify up to the Investor's entire shareholding.

9.4 Drag-Along. If Shareholders holding at least Drag-along threshold of the Shares (the "Dragging Shareholders") propose to Transfer their Shares to a bona fide third party for the purpose of a sale of the entire share capital of the Company, each other Shareholder shall, at the option of the Dragging Shareholders, sell all of its Shares to such third party on the same terms, provided the third party offer values the Company at not less than Drag-along minimum valuation and the Dragging Shareholders procure that the third party extends equivalent offers to all Shareholders.

9.5 Transfer to Affiliates. A Shareholder may Transfer Shares to an affiliate of such Shareholder with prior written notice to the Board, provided the transferee agrees in writing to be bound by this Agreement, and the transferor shall remain liable for the obligations hereunder.

9.6 Permitted Transfers. Nothing in this Clause 9 shall restrict a Transfer by a natural person Shareholder by way of gift to immediate relatives as defined under the Companies Act, 2013, or by testamentary disposition, provided the transferee agrees in writing to be bound by this Agreement.

9.7 Any Transfer in contravention of this Clause 9 shall be void and of no effect, and the Company shall refuse registration thereof.

10. DISPUTE RESOLUTION AND ARBITRATION

10.1 Any dispute, controversy or claim arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall first be sought to be resolved by good-faith negotiation between senior representatives of the Parties for a period of Negotiation period days from written notice of the dispute.

10.2 If the dispute is not resolved within such period, it shall be finally resolved by arbitration under the Arbitration and Conciliation Act, 1996, by a sole arbitrator mutually appointed by the Parties, or failing agreement within Arbitrator appointment period days, by arbitration in accordance with the rules of Arbitral institution. The seat of arbitration shall be Arbitration seat, the venue shall be Arbitration venue, and the language of the arbitration shall be English.

10.3 The award of the arbitral tribunal shall be final and binding upon the Parties, and the costs of the arbitration shall be borne as determined by the arbitral tribunal. Subject to Clause 10.4, the Parties waive their rights to appeal the award to the extent permissible under law.

10.4 Nothing in this Agreement shall prevent a Party from seeking urgent interim relief from a court of competent jurisdiction, including under Section 9 of the Arbitration and Conciliation Act, 1996.

10.5 Subject to Clause 10.1, the courts at Exclusive jurisdiction city shall have exclusive jurisdiction over matters arising out of this Agreement.

11. GENERAL PROVISIONS

11.1 Amendments. This Agreement may be amended only by a written instrument signed by the Company, the Promoter and the Investor.

11.2 Waiver. No failure or delay by any Party in exercising any right under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise preclude any further exercise of that or any other right.

11.3 Assignment. No Party may assign its rights or obligations under this Agreement without the prior written consent of the other Parties, except to an affiliate in accordance with Clause 9.5.

11.4 Notices. Any notice under this Agreement shall be in writing and delivered by hand, registered post with acknowledgment due, or email to the addresses set out in Schedule Notice schedule number, and shall be deemed received upon delivery or Email notice deemed receipt days days after dispatch by email.

11.5 Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect, and the Parties shall negotiate in good faith a valid replacement provision reflecting their original intent.

11.6 Entire Agreement. This Agreement, together with the SSA and the Articles, constitutes the entire agreement between the Parties in relation to its subject matter and supersedes all prior understandings, whether written or oral.

11.7 Further Assurances. Each Party shall execute such documents and do such acts as may reasonably be required to give full effect to this Agreement.

11.8 Relationship of Parties. Nothing in this Agreement shall be construed as creating a partnership or agency between the Parties.

11.9 Specific Performance. The Parties acknowledge that damages may not be an adequate remedy for breach of this Agreement, and each Party shall be entitled to seek specific performance and injunctive relief in accordance with the Specific Relief Act, 1963, in addition to any other remedy available in law.

12. TERM AND TERMINATION

12.1 This Agreement shall come into force on the Effective Date and shall remain in force until Agreement expiry condition, unless earlier terminated in accordance with this Clause 12.

12.2 This Agreement may be terminated: (a) by written agreement of the Company, the Promoter and the Investor; (b) by the Investor, upon a material breach by the Company or the Promoter that is not cured within Cure period days of written notice; or (c) automatically, upon the Exit or upon winding-up of the Company.

12.3 Termination shall not affect provisions which by their nature are intended to survive, including Clauses 7, 8, 10, 11 and 12, and accrued rights and remedies.

13. MISCELLANEOUS AND TAXES

13.1 Each Party shall bear its own costs and expenses in connection with the negotiation, preparation and execution of this Agreement, except the stamp duty on this Agreement, which shall be borne by Stamp duty bearer.

13.2 Where any consideration is payable under this Agreement, the Company or the responsible Party shall comply with its obligations under applicable laws, including with respect to deduction of tax at source where applicable, and GST, if applicable, shall additionally be payable at the prevailing rate by the recipient of the services.

13.3 The Company shall ensure that this Agreement and the transactions contemplated herein comply with the Companies Act, 2013, the Foreign Exchange Management Act, 1999 (where applicable), and the rules, regulations and directions issued thereunder.

SCHEDULES

EXECUTION

IN WITNESS WHEREOF, the Parties have executed this Agreement on the day, month and year first above written.

WITNESSES: