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SHAREHOLDERS AGREEMENT
This Shareholders Agreement (the Agreement) is made and effective [DATE]:
BETWEEN:

Mr _______________, residing at _____________________, (hereinafter

referred to as First Shareholder);

AND

Mr _______________, residing at _____________________, (hereinafter

referred to as Second Shareholder);

AND

Mr ________________, residing at _____________________, (hereinafter

referred to as Third Shareholder);

AND

Mr.

__________________

residing

at

______________________________(hereinafter referred to as Fourth

Shareholder).

The first, second, third and fourth shareholders are hereinafter collectively referred to as
Shareholders or individually as Shareholder.
WITNESSETH:
WHEREASthe Shareholders together are holding entire paid-up share capital of [NAME OF
COMPANY] (the Company) that is a private limited company incorporated under the Indian
Companies Act, 2013, with authorized and paid-up share capital of Rs[____]comprising of [_____]
shares of Rs[____]each;

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WHEREAS, in order to insure the harmonious and successful management and control of the
Company, and to provide for an orderly and fair disposition of shares of the Company now or
hereafter owned by any Shareholder, the Shareholders agree to be signatories to this Agreement.
WHEREAS, the present distribution of shares of the Company, each being fully paid is as follows:
Name

Number

of Equity percentage

Shares
First shareholder

Second Shareholder

Third Shareholder

Forth Shareholder

[______]

[______]

[______]

[______]

[______]

[______]

[______]

[______]

NOW, THEREFORE, in consideration of the mutual promises of the parties hereto, and
intending to be legally bound, the Shareholders hereby agree as follows:
1.

DEFINITIONS

1.1

In this Agreement, the following capitalised words and expressions have the meanings
attributed to them below, unless the context otherwise requires:
Act means the Indian Companies Act, 2013;
Agreement means this Agreement, as amended from time to time in accordance with its
terms, together with its schedules and exhibits;
Ancillary Agreementsmeans each of this Agreement, the share purchase agreement and
the share subscription agreement, if any, executed by and between the Shareholders;

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Articles of Association or AoA means the articles of association of the Company;

Buyer means the Company or those Continuing Shareholders who purchase an Offering
Shareholders Shares pursuant to this Agreement.
Board means the board of directors of the Company;
Continuing Shareholders mean all Shareholders other than an Offering Shareholder.
Equity Shares means the equity shares of the Company having a face value of Rs[___]
each;
Fair Market Value means, as of any date, with respect Equity Shares of the Company, the
fair market value of such shares as opined in writing by qualified chartered accountant or a
nationally recognized investment bank, selected and retained by the Shareholders to assess the
market value of each Equity Share of the Company at a given point in time;
General Meeting means a meeting of the shareholders of the Company;
Memorandum of Association or MoA means the memorandum of association of the
Company;
Offering Shareholder means any Shareholder, or his personal representatives, heirs,
administrators, and executors, as the case may be, who pursuant to this Agreement must or
does offer all or any of his Shares to the Company or the Continuing Shareholders.
Shares means equity shares of the Company now or hereafter owned by any Shareholder.
Tax or Taxation means any central, state, local, license fee, share capital, profits, windfall
profits, gross receipts, use, value added, transfer, registration, transaction, documentary,
recording, listing, stamp, premium, severance, ad valorem, occupancy, license, occupation,
withholding, provident fund, insurance, gratuity, employment, dividend or other similar tax,
(including all interests, surcharges, fines and penalties thereon and additions thereto) due,
payable, levied, imposed upon or claimed to be owed to the tax authorities in India or abroad;
2.

BUSINESS OF THE COMPANY

2.1

The Company is a for-profit entity which is engaged in the following business in India (the
Business):

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2.2.1 To provide aspiring and established models and photographers a platform for presenting their
profiles and photo books and for arranging business contacts, particularly with
agents/agencies and brands. The domain name [PLEASE MENTION DOMAIN NAME]
belongs exclusively to the Company and no person, entity, firm, non-profit organization shall
use the said domain without prior permission of the Company. All charges for maintenance of
the said domain name shall be responsibility of the Company.
3.

SHAREHOLDER MEETINGS

3.1

Subject to provisions of the Act, Shareholders shall be required to meet at least once in two
weeks, or as otherwise agreed mutually by the Shareholders.

3.2

Notice for any meeting of the shareholders shall not be less than 1 day unless and to the
extent that the Shareholders consent to a longer period in writing in advance.

3.3

The meeting shall provide the facility for Shareholders based outside India to participate by
way of teleconference or video conference.

3.4

In order to provide transparency, all financial statements, including bank details shall be
disclosed to all Shareholders at the meeting.

3.5

Objective of this meeting is to ensure all Shareholders are aware of expenditures being
undertaken, income received, new members inducted and in general discuss routine affairs of
the Company.

3.6

Each Shareholder shall keep the Company informed, on a current basis, of all events,
discussions, notices or changes with respect to anything that may affect the Company whether
positively or negatively.

4.

EQUAL DISTRIBUTION OF PROFITS

4.1

It is hereby agreed by and between the Shareholders that even though the shareholding
pattern reflects [_________] ratio between the First, Second and Third, Fourth Shareholders,
whenever after-tax profit or distributable income of the Company is declared as dividend and
distributed among Shareholders, it shall be declared in equal proportion.

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5.

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PURCHASE FOR INVESTMENT

Each Shareholder represents and warrants that he is acquiring and has acquired his shares for
his own account for investment and not with a view to, or for resale in connection with, any
distribution thereof or with any present intent of selling any portion thereof.

6.

TRANSFERS OF SHARES
A Shareholder may not transfer, give, convey, sell, pledge, bequeath, donate, assign, encumber
or otherwise dispose of any shares except pursuant to this Agreement.

6.1. Transfers to the Company: Subject to lock-in provisions set-out in clause 6.6 below, a
Shareholder may give, sell, transfer or otherwise dispose of all or any of his Shares to the
Company at such price and on such terms and conditions as such Shareholder and the Board
of Directors of the Company may agree. Valuation of shares shall be done by an independent
person or firm, which has the approval of all Shareholders concerned (Calculated Purchase
Price).
6.2. Transfer to Others:Except as provided for in Paragraph 6.1 above, a Shareholder desiring to
dispose of some or all of his Shares may do so only pursuant to a bona fide offer to purchase
(the Offer) and after compliance with the following provisions. Such Shareholder shall first
give written notice to the Company and the other Shareholders of his intention to dispose of
his Shares, identifying the number of Shares he desires to dispose of, the proposed purchase
price per share and the name of the proposed purchaser and attaching an exact copy of the
Offer received by such Shareholder.
6.3. The Companys Right to Purchase:The Company shall have the exclusive right to purchase all
of the shares which the Offering Shareholder proposes to sell at the Calculated Purchase
Price. The Company shall exercise this right by giving written notice to the Offering
Shareholder (with a copy thereof to each of the Continuing Shareholders) within 30 (thirty)
days after receipt of the notice from the Offering Shareholder (Day Period) that the
Company elects to purchase the shares subject to the Offer and setting fourth a date and time
for closing which shall be not later than 60 (sixty) days after the date of such notice from the
Company. At the time of closing, the Offering Shareholder shall deliver to the Company

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certificates representing the shares to be sold. The shares shall be delivered by the Offering
Shareholder free of any and all liens and encumbrances. All transfer taxes and documentary
stamps shall be paid by the Offering Shareholder.
6.4

The Continuing Shareholders Right to Purchase:If the Company fails to exercise its right to
purchase pursuant to sub clause above, the Continuing Shareholders shall have the right for an
additional period of 30 (thirty) days (the (Additional Day Period) to purchase the shares
which the Offering Shareholder proposes to sell at a mutually agreed purchase price per share.
Any purchase of shares by all or some of the Continuing Shareholders shall be made in such
proportion as they might agree among themselves or, in the absence of any such agreement,
pro rata in proportion to their ownership of shares of the Company (excluding the Offering
Shareholders Shares) at the time of such offer. Said shares shall be delivered by the Offering
Shareholder free and clear of any and all liens and encumbrances. All transfer taxes and
documentary stamps shall be paid by the Offering Shareholder.

6.5

Sale to third party: If either the Company or some or all of the Continuing Shareholders do
not elect to purchase all of the shares which the Offering Shareholder proposes to sell, the
Offering Shareholder may transfer all of the Shares which he proposes to sell pursuant thereto
on the same terms and conditions set fourth in such Offer, provided that any transferee of
such shares shall be bound by this Agreement, and further provided that if such sale is not
completed within 30 (thirty) days after the date notice is received by the Company under
Paragraph 6.2 hereof, all such shares shall again become subject to the restrictions and
provisions of this Agreement.

6.6

Lock-in: the following lock-in provisions shall uniformly apply to each Shareholder:
a.

Notwithstanding anything to the contrary,the Shareholders shall not in any way sell,
transfer or gift or in any way transfer their shareholding for a period of three years from
the date of executing this Agreement.

b.

After the expiry of the above lock-in period, should either Shareholder decide to dilute
his shareholding in the Company, Shareholder should comply with provisions of this
Agreement, in particular clause 6.1 to 6.5.

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7.

ANTI-DILUTION PROTECTION

7.1

In the event that, at any time, the Company issues any additional Equity Shares or any other
shares, rights, options, warrants, appreciation rights or other instruments or securities entitling
the holder to receive any Equity Shares of the Company or any options to purchase or rights
to subscribe for securities by their terms convertible into or exchangeable for Equity Shares
(each, a Dilution Instrument), then each of the Shareholders shall be entitled to subscribe
to such number of Dilution Instruments in proportion to their equity shareholding in the
Company in order to maintain their level of shareholding in the Company.

7.2

Each of the Shareholders shall be entitled to acquire the Dilution Instruments on the terms on
which the Company proposes to issue the Dilution Instruments to any other Person.

8.

RIGHT OF FIRST REFUSAL

8.1

The Company shall not issue, sell or exchange, agree to issue, sell or exchange, or reserve or
set aside for issuance, sale or exchange, any (i) shares of preferred stock or any equity security
of the Company which is convertible into preferred stock or any other security of the
Company, (ii) any debt security of the Company which is convertible into equity shares, or /
and (iii) any option, warrant or other right to subscribe for, purchase or otherwise acquire any
equity security or any such debt security of the Company, unless in each case the Company
shall have first offered to sell to each Shareholder, pro rata in proportion to such
Shareholders then ownership of shares of the Company, (the Offered Securities), at the
Calculated Purchase Price (the Stock Offer).

8.2

Notice of each Shareholders intention to accept, in whole or in part, a Stock Offer shall be
evidenced by a writing signed by such Shareholder and delivered to the Company prior to the
end of the 30 day period of such Stock Offer, setting fourth such portion of the Offered
Securities as such Shareholder elects to purchase (the Notice of Acceptance).

9.

SALE OR REDEMPTION UPON, DISABILITY OR DEATH

9.1

Upon, for whatever reason, Disability (as defined hereinafter) of a Shareholder, or the death of a
Shareholder (any such event hereinafter a Triggering Even), such Shareholders shares

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shall vest with his legal heirs, executors, guardian or personal representative. Such share and
incoming shareholder will be subject to provisions of the Agreement.
9.2

For purposes of this Agreement, Disability of a particular person means the inability, due
to a physical or mental condition, of such person to maintain his relationship with the
Company (including without limitation, fulfilling his duties in any position as an officer,
director, consultant, promoter or shareholder to or of the Company) or to conduct his normal
daily activities on behalf of the Company.

10.

AUDITOR AND FINANCIAL STATEMENTS

10.1

The financial statements of the Company shall be audited at the Companys expense by an
independent auditor (Auditor) selected by the Company.

10.2

The Company shall deliver to each of the Shareholder (a) audited financial statements
within 15 (fifteen) days after the end of each fiscal year; and (b) unaudited half yearly
financial statements within 10 (ten) days of the end of the 6 (six) months period for the first
year of operation and thereafter unaudited quarterly financial statements within 10 (ten) days
of the end of 3 (three) months period.

10.3

Shareholders have the right to inspect the facilities, books, records of the Company.

11.

AGREEMENT BINDING ON ALL PERSONS INTERESTED IN SHARES

11.1 Each person who now or hereafter, including legal heirs, executors, guardian or personal
representative, acquires any legal or equitable interest in any shares shall be bound by the
terms of this Agreement. No issuance or transfer of shares shall be effective and the Company
shall not enter any issue or transfer upon the register of members of the Company or issue a
certificate in the name of any person unless the Company is satisfied that such person is, and
in a manner satisfactory to the Company has acknowledged being bound by this Agreement.
12.

CLOSING

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12.1 Except as otherwise agreed to or expressly provided for herein, closing pursuant to the
exercise of a right to purchase or sell shares pursuant to this Agreement shall be held at the
registered office or registered office of the Company.
13.

NOTICES

13.1 Notices and declarations under this Agreement shall be in writing and sent by registered or
certified mail, return receipt requested, postage paid, to the Company at its principal executive
offices and to Shareholders at their last address as shown on the records of the Company or at
such other address with respect to any party hereto as such party shall notify the other
Shareholders and the Company in writing in the manner specified herein.
14.

SEVERABILITY

14.1 The various provisions of this Agreement are severable from each other and from the other
provisions of the Agreement, and in the event that any provision in this Agreement shall be
held to be invalid or unenforceable by a court of competent jurisdiction, the remainder of this
Agreement shall be fully effective, operative and enforceable.
15.

FREE END CLEAR OF ENCUMBRANCES

15.1 All Shares sold pursuant to the terms of this Agreement shall be free of any and all liens and
encumbrance.
16.

DISPUTE RESOLUTION

16.1 If any dispute arises between the Shareholders and/or the Company during the subsistence of
this Agreement or thereafter, in connection with the validity, interpretation, implementation or
alleged breach of any provision of this Agreement or regarding a question, including the
question as to whether the termination of this Agreement by one Party hereto has been
legitimate (Dispute), the disputing Shareholders hereto shall endeavour to settle such
Dispute amicably. The attempt to bring about an amicable settlement shall be considered to
have failed if not resolved within 60 (Sixty) Business Days from the date of the Dispute.

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16.2 If the Shareholders are unable to amicably settle the Dispute in accordance with aforesaid
within the period specified therein, any Shareholder to the Dispute shall be entitled to serve a
notice invoking this Section and making a reference to arbitration in New Delhi, India in
accordance with The Indian Arbitration and Conciliation Act as in force at the time of
arbitration. The dispute shall be settled by an arbitral tribunal comprising three (3) arbitrators,
with the First and Second Shareholder having the right to appoint one arbitrator, the Third
and Fourth Shareholder appointing one arbitrator and the two arbitrators together appointing
an umpire. The arbitration proceedings shall be conducted in the English language.
16.3 The Arbitrators award shall be substantiated in writing. The court of arbitration shall also
decide on the costs of the arbitration proceedings. In case the arbitrators have not decided on
the costs of the arbitration proceedings, each Party to the Dispute shall bear its own costs, in
relation to the arbitration proceedings.
16.4 The award of the Arbitrator shall be binding on the Parties subject to the applicable laws in
force and the award shall be enforceable in any competent court of law in New Delhi.
16.5 The provisions of this shall survive the termination of this Agreement.
16.6 Courts in New Delhi only shall have jurisdiction to try matters with respect to this Agreement.
17.

ENTIRE AGREEMENT
This instrument contains the entire agreement of the parties and may be changed only by an
agreement in writing signed by the Company and all persons then owning shares.

18.

COUNTERPARTS
This Agreement may be executed in one or more counterparts each of which shall be deemed
an original and all of which together shall be deemed to be one and the same instrument.

IN WITNESS WHEREOF the Parties have executed this Agreement as of the day and year first
above written.

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SIGNED
AND
DELIVERED
by
____________________(first Shareholder);

)
)
)

SIGNED
AND
DELIVERED
by
__________________(second Shareholder);

)
)
)

SIGNED
AND
DELIVERED
by
_________________, (third Shareholder);

)
)
)

SIGNED
AND
DELIVERED
by
__________________(fourth Shareholder)

)
)
)

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