SUBX.L Regulatory News (SUBX)

13 June 2012

To

The London Stock Exchange

10 Paternoster Square

London

EC4M 7LS

Dear Sirs

Announcement of Notice of Meeting of the holders of US$180,000,000 2% Coupon Convertible Unsecured Bonds due 2012, convertible into Equity Shares of Subex Limited (formerly known as Subex Azure Limited) (the Bonds) of which US$39,000,000 in principal amount remain outstanding

ISIN: XS0289206285

We, Subex Limited, authorize London Stock Exchange (the LSE) to release the announcement of Notice of Meeting of the holders of the outstanding Bonds as provided or to be provided by ourselves or on our behalf to the LSE, in the form attached. All capitalized terms used but not defined in this letter have the meanings given to them in the attached Notice of Meeting to the Bondholders (the Notice).

We propose the Extraordinary Resolution to seek approval for certain Modifications and Waivers, as described in more detail in the Notice.

Yours faithfullyFor and on behalf ofSUBEX LIMITED

By:Name: Ramanathan JTitle: Vice President-Finance & Company Secretary

Enclosure:Notice of Meeting to Bondholders dated 13 June 2012

NOTICE OF MEETING OF HOLDERS OFEXISTING 2% BONDS CONVENED ON 5 JULY 2012

THIS NOTICE OF MEETING IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY OR EXCHANGE ANY SECURITIES IN THE UNITED STATES OR IN ANY OTHER JURISDICTION.

THIS NOTICE OF MEETING OR ANY OTHER DOCUMENTS OR MATERIALS RELATING TO THE MEETING HAVE NOT BEEN SUBMITTED TO THE CLEARANCE PROCEDURES OF THE COMMISSIONE NAZIONALE PER LE SOCIETÀ E LA BORSA (CONSOB) PURSUANT TO ITALIAN LAWS AND REGULATIONS. THIS NOTICE OF MEETING IS CIRCULATED IN THE REPUBLIC OF ITALY UNDER THE EXEMPTION PURSUANT TO ARTICLE 101-BIS, PARAGRAPH 3-BIS OF THE LEGISLATIVE DECREE NO. 58 OF 24 FEBRUARY 1998, AS AMENDED (THE FINANCIAL SERVICES ACT) AND ARTICLE 35-BIS, PARAGRAPH 4, LETTER B) OF CONSOB REGULATION NO. 11971 OF 14 MAY 1999, AS AMENDED.

THIS NOTICE OF MEETING IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF bondHOLDERS. IF bondHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD CONSULT THEIR OWN INDEPENDENT PROFESSIONAL ADVISERS IMMEDIATELY.

SUBEX LIMITED

(incorporated in the Republic of India with limited liability under the Indian Companies Act, 1956 with CIN L85110KA1994PLC016663)

(the Issuer)

NOTICE OF MEETING

of the holders of the

U.S.$180,000,000 2% Coupon Convertible Unsecured Bonds due 2012, convertible into Equity Shares of Subex Limited (formerly known as Subex Azure Limited) (the 2% Bonds)

of which U.S.$39,000,000 in principal amount remain outstanding

ISIN: XS0289206285

NOTICE IS HEREBY GIVEN that, pursuant to the provisions of Schedule 3 to the 2% Bond Trust Deed (as defined below) constituting the 2% Bonds and made between the Issuer and the 2% Bond Trustee (as defined below) as trustee for the Bondholders (as defined below), a meeting of the Bondholders convened by the Issuer will be held at 5.30 pm (Singapore time) on 5 July 2012 at the offices of Norton Rose (Asia) LLP, One Raffles Quay, 34-02 North Tower, Singapore 048583 for the purpose of considering and, if thought fit, passing the following resolution which will be proposed as an Extraordinary Resolution in accordance with the provisions of the 2% Bond Trust Deed. Unless the context otherwise requires, capitalised terms used in this Notice of Meeting shall bear the meanings given to them in the 2% Bond Trust Deed.

EXTRAORDINARY RESOLUTION

"THAT THIS MEETING (the Meeting) of the holders (the Bondholders) of the outstanding U.S.$180,000,000 2% Coupon Convertible Unsecured Bonds due 2012, convertible into Equity Shares of Subex Limited (formerly known as Subex Azure Limited) (the 2% Bonds) issued by Subex Limited (formerly known as Subex Azure Limited) (the Issuer) constituted by a trust deed dated 8 March 2007 between the Issuer and The Bank of New York Mellon (formerly known as The Bank of New York), acting through its London Branch, as trustee for the Bondholders (the 2% Bond Trustee) (as amended pursuant to a first supplemental trust deed dated 6 March 2012 (the First Supplemental Trust Deed), and as further amended, restated and/or supplemented in accordance with its terms from time to time, the 2% Bond Trust Deed) by Extraordinary Resolution (as defined in the Trust Deed) HEREBY:

(1) approves, assents and agrees to the modification of the Terms and Conditions of the 2% Bonds as set out in Schedule 1 to the 2% Bond Trust Deed (the Conditions) by (A) amending the definition of Maturity Date appearing in Condition 8.1 to 9 March 2017, such that the Maturity Date of the 2% Bonds shall with effect from settlement date of the Exchange Offer (such settlement being the date on or after the date of the Second Supplemental Trust Deed (as defined below) as notified in writing by the Issuer to the 2% Bond Trustee, but which must not be later than 6 July 2012) be 9 March 2017, and all references to the defined term Maturity Date in the 2% Bond Trust Deed and the Conditions shall be construed accordingly, and (B) amending the definition of Conversion Period appearing in Condition 6.1, such that the end of the Conversion Period applicable to the 5% Bonds shall with effect from the date of the Second Supplemental Trust Deed be the close of business (at the place where the Certificate evidencing the relevant 5% Bonds is deposited for conversion) on 29 January 2017 (or, if that is not a business day, on the immediately preceding business day), instead of 29 January 2012, and all references to the defined term Conversion Period in the 5% Bond Trust Deed and the Conditions shall be construed accordingly, (together, the Modifications);

(2) approves, assents and agrees to the continued accrual of scheduled interest only on the 2% Bonds pursuant to the Modifications in accordance with the provisions set out in Condition 5.1 to, but excluding, 9 March 2017, and to the continued obligation of the Issuer pursuant to the Modifications to redeem each 2% Bond then outstanding at 136.04% of its principal amount on 9 March 2017 in accordance with Condition 8.1;

(3) approves, assents and agrees, pursuant to Condition 4.2 (Negative Pledge and Other Covenants - Other Covenants), to the incurrence by the Issuer of the New Debt (as defined in the Notice of Meeting) and any additional Relevant Indebtedness pursuant to the Additional Transaction (and further assents and agrees to this part of this Extraordinary Resolution taking effect as an Ordinary Resolution in accordance with the requirements of Condition 4.2 (Negative Pledge and Other Covenants - Other Covenants)) (the New Debt Approval);

(4) approves, assents to and agrees irrevocably to waive and vary the provisions, restrictions and requirements of Condition 4.1 (Negative Pledge and Other Covenants - Negative Pledge) such that the creation and subsistence of the New Security (as defined in the Notice of Meeting) pursuant to the Additional Transaction shall at all times expressly be permitted, approved and authorised by the Bondholders and the 2% Bond Trustee and shall not at any time constitute, or be determined or regarded as, or be alleged by the Bondholders, the 2% Bond Trustee or any other person to be, a breach of Condition 4.1 (Negative Pledge and Other Covenants - Negative Pledge) (or any other provision of the 2% Bonds, the Conditions, the 2% Bond Trust Deed or the Agency Agreement) or an Event of Default or Potential Event of Default, and Condition 4.1 (Negative Pledge and Other Covenants - Negative Pledge) and the 2% Bond Trust Deed shall at all times be construed as varied accordingly to permit the creation and subsistence at all times of the New Security (the Negative Pledge Waiver);

(5) approves, assents and agrees irrevocably (A) to waive any and all existing Events of Default or Potential Events of Default under the 2% Bond Trust Deed and the Conditions as well as any Events of Default or Potential Events of Default that may occur as a result of the execution of the Additional Transaction, the incurrence of the New Debt, the creation and subsistence of the New Security and/or the Modifications and (B) to waive and vary the provisions and requirements of Condition 6.3 (Adjustment to Conversion Price) such that the execution of the Additional Transaction, the incurrence of the New Debt, the creation and subsistence of the New Security and/or the Modifications shall at all times expressly be permitted, approved and authorised by the Bondholders and the 2% Bond Trustee (acting on the instructions of the Bondholders) and shall not at any time constitute, or be determined or regarded as, or be alleged by the Bondholders, the 2% Bond Trustee or any other person to be, an event requiring an adjustment to be made to the Conversion Price (as defined in the Conditions) under Condition 6.3 (Adjustment to Conversion Price) (or any other provision of the 2% Bonds, the Conditions, the 2% Bond Trust Deed or the Agency Agreement), and Condition 6.3 (Adjustment to Conversion Price) and the 2% Bond Trust Deed shall at all times be construed as varied accordingly ((A) and (B) together, the Waivers and, together with the Modifications, the New Debt Approval and the Negative Pledge Waiver, the Modifications and Waivers);

(6) approves, assents and agrees to the Modifications and Waivers being effected in accordance with and pursuant to the relevant terms of the 2% Bond Trust Deed and the Conditions and, for the avoidance of doubt, agrees that the Modifications and Waivers do not constitute and shall not at any time be construed by the Bondholders or the 2% Bond Trustee as an Event of Default or Potential Event of Default;

(7) subject to the prior satisfaction (or, if permitted, waiver in accordance with item (10) below) of the conditions precedent referred to in Clause 3 of the draft second supplemental trust deed (the Second Supplemental Trust Deed) attached in Schedule 2 to the Notice of Meeting circulated to the Bondholders on or about 13 June 2012 (the Notice of Meeting) (such satisfaction (or, if permitted, waiver) of the conditions precedent to be confirmed in writing by the Issuer to the 2% Bond Trustee), sanctions, authorises, directs, requests and empowers the 2% Bond Trustee to concur in the Modifications and Waivers and, in order to give effect thereto and to implement the same, forthwith to execute and deliver the Second Supplemental Trust Deed and to concur in and to execute and do, all such other deeds, instruments, acts and things as may be necessary to carry out and give effect to this Extraordinary Resolution;

(8) discharges and exonerates each of the 2% Bond Trustee and the Registered Bondholder (as defined in the Notice of Meeting) and each of their respective directors, officers and employees from all liability for which any of them may have become or may become responsible under the 2% Bond Trust Deed, the 2% Bonds or otherwise in respect of any act or omission in connection with the Modifications and Waivers, their implementation and/or this Extraordinary Resolution and acknowledges that the 2% Bond Trustee has not and will not make any independent assessment of the Modifications and Waivers and the impact thereof on the interests of the Bondholders and is acting solely on the instructions of the Bondholders in respect of this Extraordinary Resolution;

(9) approves, sanctions and assents to every abrogation, amendment, modification, compromise or arrangement in respect of the rights of the Bondholders against the Issuer or against any of its property whether such rights shall arise under the 2% Bond Trust Deed or otherwise arising directly from the Modifications and Waivers and their implementation and this Extraordinary Resolution;

(10) approves, assents and agrees that any of the conditions precedent referred to in the letter from the Issuer, attached as Schedule 1 to the draft Second Supplemental Trust Deed (the Conditions Precedent Confirmation Letter), may be waived by way of written notice given to the Issuer by both a majority of the Bondholders and a majority of the holders of the 5% Bonds (as defined in the Notice of Meeting), other than the conditions listed under (a), (b), (c) and (j) in such Schedule, and acknowledges, assents and agrees that the 2% Bond Trustee shall have no responsibility or liability for acting on the confirmation of the Issuer in the Conditions Precedent Confirmation Letter that such waiver has been obtained from a majority of the Bondholders. The Bondholders further acknowledge and agree that the 2% Bond Trustee shall have no liability or responsibility for monitoring any conditions attached to any such waivers or consents granted by third parties as may be described in the Conditions Precedent Confirmation Letter;

(11) approves, assents and agrees that both a majority of the Bondholders and a majority of the holders of the 5% Bonds (as defined in the Notice of Meeting) can accept and approve any amendments or variations to the New Bond Conditions (as defined in the Notice of Meeting) as may be required pursuant to the satisfaction of the Lender Consent Conditions (as defined in the Notice of Meeting) and that neither the 2% Bond Trustee nor the Trustee of the holders of the New Bonds shall have any liability or responsibility for confirming that any such amendments are accepted and approved by such majority of Bondholders and/or will be in the interests of Existing Bondholders or, once issued, holders of the New Bonds; and

(12) approves, assents and agrees that a majority of the Bondholders and a majority of the holders of the 5% Bonds (as defined in the Notice of Meeting) can nominate two persons to the board of directors of the Issuer as the initial Bondholder Directors (as defined in the Notice of Meeting), that such nominations will be provided directly to the Issuer and the 5% Bonds Trustee will have no responsibility for or liability in connection with such nomination process.

Unless the context otherwise requires, capitalised terms used in this Extraordinary Resolution shall bear the meanings given to them in the 2% Bond Trust Deed or, as applicable, the Notice of Meeting."

Bondholders should note that, among others, one condition precedent to the Second Supplemental Trust Deed being entered into by the Issuer and the 2% Bond Trustee is for confirmation to have been received from The Bank of New York Mellon, acting through its London Branch, as trustee for the Issuer's outstanding U.S.$98,700,000 5% Convertible Unsecured Bonds due 2012 convertible into ordinary shares of the Issuer (the 5% Bonds) that the holders of the 5% Bonds have passed an extraordinary resolution substantially the same as the Extraordinary Resolution set out in this Notice of Meeting and that a second supplemental trust deed giving effect thereto must be entered into at or about the same time as the Second Supplemental Trust Deed.

For the avoidance of doubt, no modifications, waivers or approvals will be made to the 2% Bonds or the 5% Bonds unless: (a) the requisite Extraordinary Resolution approval is first obtained from the holders of the 2% Bonds (in respect of the proposed Modifications and Waivers); and (b) the equivalent requisite extraordinary resolution approval is also obtained from the holders of the 5% Bonds (in respect of the equivalent proposed modifications, waivers and approvals in respect of the 5% Bonds).

The Issuer acknowledges that Holders will rely on the truth and accuracy of each of the statements in the letter from the Issuer to be delivered as a condition precedent to the execution and delivery of the Second Supplemental Trust Deed when voting on the Extraordinary Resolution.

Background

General

Pursuant to extraordinary resolutions passed at meetings of the holders of the 2% Bonds and the 5% Bonds convened by the Issuer on 6 March 2012, the definition of Maturity Date appearing in Condition 8.1 was amended from 9 March 2012 to 9 July 2012 (the First Maturity Date Extension). The First Maturity Date Extension was sought with a view to providing the Issuer with adequate time to consider options, finalise and implement a comprehensive restructuring plan in respect of the 5% Bonds and the 2% Bonds (the Restructuring Plan). Since the First Maturity Date Extension, the Issuer has continued actively to work towards formulating the Restructuring Plan, the two principal components of which may be summarised as follows: (a) the extension of the maturity date and related provisions of both the 2% Bonds and the 5% Bonds to 9 March 2017 pursuant to the Modifications (as referred to in the Extraordinary Resolution set out in this Notice of Meeting) and (b) the execution of a cashless exchange offer by the Issuer under which up to U.S.$131,100,000 new senior U.S. dollar-denominated 5.70 per cent secured convertible bonds due July 2017 (convertible into ordinary shares of the Issuer) (the New Bonds) will be issued to those holders of 2% Bonds and 5% Bonds who agree, and are eligible, to participate in the exchange offer (as described in more detail below) (the Additional Transaction).

Under current regulations of the Reserve Bank of India (RBI) applicable to the 2% Bonds and the 5% Bonds, the Modifications may not be effected unless approval from the RBI is first obtained. In a letter dated 27 April 2012, the Issuer obtained the in-principle approval of the RBI, among other things, to conduct the Exchange Offer, to issue the New Bonds, to create the New Security, and to amend the terms of the Existing Bonds pursuant to the Extraordinary Resolutions.

Regulatory and Other Approvals

In a letter dated 27 April 2012, the Issuer obtained the in-principle approval of the RBI (the RBI Approval), among other things, to conduct the Exchange Offer, to issue the New Bonds, to create the Onshore Security, and to amend the terms of the Existing Bonds pursuant to the Extraordinary Resolutions. However, the RBI Approval requires the following additional approvals (the Additional Approvals) to be obtained: (i) the Issuer is required to seek the consent of the Authorised Dealer with respect to the creation of the charge on the immovable property of the Issuer and the pledge of shares in the Issuer as described in Condition 1.2 of the New Bond Conditions; and (ii) the Issuer is required to seek a final approval from the RBI for the creation of the charge on the present and future movable property of the Issuer (including the pledges over the shares of the Offshore Secured Subsidiaries held by the Issuer) and over the FCCB Repayment Fund. The Issuer has not yet received the Additional Approvals.

Further, the Issuer has not yet received the requisite consents and approvals from certain of its existing lenders in connection with the issuance of the New Bonds and related matters. It is anticipated that the existing lenders shall provide such consents and approvals prior to the settlement date of the Exchange Offer, but may impose such conditions to their consents and approvals (the Lender Consent Conditions) as may require an amendment or variation to the terms and conditions of the New Bonds (the New Bond Conditions).

The consents and approvals from certain of its existing lenders are a Condition Precedent which must be satisfied, prior to the settlement of the Exchange Offer, and such Condition Precedent is not capable of amendment, rescission or waiver by the Issuer, the Holders or any party to the Exchange Offer.

AS SOON AS POSSIBLE FOLLOWING RECEIPT OF ANY OUTSTANDING LENDER CONSENTS, THE ISSUER PROPOSES TO MAKE AN ANNOUNCEMENT TO EXISTING BONDHOLDERS SPECIFYING THE TERMS OF SUCH CONSENT (TO THE EXTENT MATERIAL TO THE EXCHANGE OFFER) TOGETHER WITH A SUMMARY OF ANY AMENDMENTS THAT ARE REQUIRED TO BE MADE TO THE TERMS AND CONDITIONS OF THE NEW BONDS. BEFORE SUBMITTING ELECTRONIC EXCHANGE CONFIRMATIONS AND INVESTOR REPRESENTATION LETTERS, HOLDERS OF EXISTING BONDS ARE ADVISED TO CONSIDER WAITING UNTIL SUCH TIME THAT ADDITIONAL INFORMATION WITH RESPECT TO THE LENDER CONSENTS IS MADE AVAILABLE TO THEM.

NOTWITHSTANDING THE ABOVE, HOLDERS WHO HOLD EXISTING BONDS THROUGH EUROCLEAR OR CLEARSTREAM, LUXEMBOURG ARE URGED TO SUBMIT THE ELECTRONIC EXCHANGE CONFIRMATIONS AND INVESTOR REPRESENTATION LETTERS AT LEAST 48 HOURS IN ADVANCE OF THE CUT-OFF DEADLINE TO AVOID DELAYS THAT MIGHT AFFECT THE VALID EXCHANGE OF THEIR EXISTING BONDS.

Rationale for the Restructuring Plan

The Issuer believes that the Restructuring Plan is both necessary and desirable for the Issuer and beneficial for Bondholders for the principal reasons set out below.

The Restructuring Plan will significantly aid the Issuer in effectively and responsibly dealing with its obligations under the 2% Bonds and the 5% Bonds, and has been formulated to provide a final solution to its current unfavourable debt position. Although the Issuer has been witnessing sustained operational profits, it has been unable to set aside sufficient funds to meet its redemption obligations under the 2% Bonds and the 5% Bonds due to its current debt profile (among other things). Given the current market conditions in India and globally, the Issuer has been unable to secure funds in the form of equity as well.

As a consequence of the economic downturn and the highly volatile nature of the global and local capital markets, the trading price of the Issuer's shares has fallen significantly. The closing price of the Issuer's shares on the BSE and the NSE on 12 June 2012 was Rs. 23.05 and Rs. 22.95 respectively, which is approximately 28.70% and 28.58% respectively of the 5% Bonds conversion price and approximately 3.51% and 3.50% respectively of the 2% Bonds conversion price. As a result of the disparity between the trading price of the Issuer's shares and the respective conversion prices of the 2% Bonds and the 5% Bonds, the Issuer believes that it is unlikely that holders of the 2% Bonds and the 5% Bonds will exercise their conversion right. Currently, the accreted redemption value of both the 2% Bonds and the 5% Bonds payable on maturity is significantly greater than the value of the Issuer's shares receivable on conversion. Thus, the share price will need to increase substantially from its present levels in order for it to make economic sense for holders to convert the 2% Bonds and the 5% Bonds into shares of the Issuer.

The Restructuring Plan provides an incentive to the holders of the 2% Bonds and the 5% Bonds to exchange their 2% Bonds and/or (as applicable) 5% Bonds for New Bonds as the conversion right for the New Bonds is likely to be exercisable at a substantially lower price. In addition, the New Bonds contain a mandatory conversion provision pursuant to which (as soon as practicable and in any event within 25 days following their issuance) an amount of New Bonds equal in value to the redemption premium of the relevant 2% Bonds and/or (as applicable) 5% Bonds which are exchanged for New Bonds will be mandatorily converted into shares of the Issuer, as more particularly described in the Exchange Offer Memorandum. The Issuer believes that these factors will increase the probability of material amounts of the Issuer's debt being converted into equity, thereby improving the debt-to-equity ratio of the Issuer.

The Issuer therefore believes that the Restructuring Plan is the only viable option available to the Issuer to avoid a payment default on the 2% Bonds and the 5% Bonds on 9 July 2012. Failure to redeem the 2% Bonds and/or the 5% Bonds on 9 July 2012 would constitute an Event of Default, and would be likely to give rise to events of default under other indebtedness of the Issuer. Unless a further restructuring could be agreed with its creditors, such a default may ultimately lead to the insolvency of the Issuer, among other things.

The Issuer further believes that the Restructuring Plan will enhance investor confidence and improve the image of the Issuer in the international markets and among foreign investors, lenders and its clients by dealing responsibly and in a timely manner with the restructuring of the 2% Bonds and the 5% Bonds. As a part of the Exchange Offer, and also for the purposes of compliance with the listing agreements pertaining to composition of the board of directors of the Issuer, Mr. Subash Menon will cease to be the Chairman of the Issuer on the date of issue of the New Bonds and shall continue to be the Founder, Managing Director & CEO of the Company.

The Additional Transaction

At or about the time of the Meeting, and as part of the Restructuring Plan, the Issuer will also be implementing the Additional Transaction which will be available only to certain holders of 2% Bonds and 5% Bonds who (i) hold a certain minimum denomination of 2% Bonds or, as applicable, 5% Bonds (expected to be approximately U.S.$200,000 in the case of the 2% Bonds) and (ii) who are eligible to participate in such transaction under the laws of applicable jurisdictions and are able to make certain representations which are likely to include the representations set forth in Schedule 1 hereto (Eligible Holders). The Waivers, the New Debt Approval and the Negative Pledge Waiver are required in order to allow the Additional Transaction to proceed. Further information on the Additional Transaction will be made available to Eligible Holders in an Exchange Offer Memorandum dated the same date as this Notice of Meeting (the Exchange Offer Memorandum).

Eligible Holders or Direct Participants (on behalf of Eligible Holders) which participate in the Additional Transaction with respect to all or a portion of their 2% Bonds will be deemed to have issued instructions to the relevant Clearing System to instruct The Bank of New York Mellon Depository (Nominees) Limited as registered holder of the 2% Bonds to authorise the Principal Agent to issue and complete a block voting instruction in accordance with Schedule 3 (Provisions for meetings of Bondholders) of the 2% Bond Trust Deed and in such block voting instruction to appoint the Principal Agent as proxy to vote in favour of the Extraordinary Resolution at the Meeting of Holders for the applicable 2% Bonds and any adjournment thereof in respect of the full principal amount of 2% Bonds of such series submitted for exchange.

Bondholders who are not Eligible Holders, or who decline to participate in the Additional Transaction, will be bound by the amendments set out in the Extraordinary Resolution in the event that the Extraordinary Resolution is duly passed at the Meeting.

The New Debt Approval 

Pursuant to Condition 4.2 (Negative Pledge and Other Covenants - Other Covenants) of the Conditions, the Issuer has undertaken (among other things) that, save in certain circumstances, it will not incur additional Relevant Indebtedness without the approval of an Ordinary Resolution if immediately following the incurrence of such additional Relevant Indebtedness the aggregate quantum of the Group's Relevant Indebtedness would exceed the Maximum Debt Level (each such term being as defined in Condition 4.2 (Negative Pledge and Other Covenants - Other Covenants)).

The Additional Transaction will result in the incurrence of additional Relevant Indebtedness by the Issuer (the New Debt). The New Debt, when aggregated with any existing Relevant Indebtedness of the Group, will exceed an amount equal to the Maximum Debt Level. In order for the Issuer to be able to incur the New Debt, the Issuer is also seeking an Ordinary Resolution (as defined in Condition 4.2 (Negative Pledge and Other Covenants - Other Covenants)) from Bondholders for the approval of the New Debt in accordance with Condition 4.2 (Negative Pledge and Other Covenants - Other Covenants).

The Negative Pledge Waiver

The Additional Transaction will also result in the creation and subsistence of certain new security interests for the benefit of the holders of the New Bonds only over certain assets of the Issuer and certain shares in the Issuer, and the issued share capital of certain of the Issuer's subsidiaries, as more particularly described in the Exchange Offer Memorandum (together, the New Security), and as described below.

The obligations of the Issuer under the New Bonds will be secured by the following security interests in India granted in favour of the Onshore Security Trustee for the benefit of itself, the Trustee for the New Bonds, the Agents, the Offshore Security Trustees and the Bondholders (together, the Onshore Security):

(i) a charge governed by Indian law over present and future movable and immovable assets of the Issuer (including work in progress, client receivables and intellectual property) on a first-ranking basis or, to the extent already secured by Existing Onshore Security (as defined below) over such movable and immovable assets, if applicable, on a second-ranking pari passu basis for so long as the relevant Existing Onshore Security subsists, and subject to the provisos below;

(ii) a pledge governed by Indian law of all the equity shares of the Issuer held directly or indirectly by the Promoters and Promoter Group at any time on a first-ranking basis or, to the extent already secured by Existing Onshore Security over such shares, if applicable, on a second-ranking pari passu basis for so long as the relevant Existing Onshore Security subsists, and subject to the provisos below; and

(iii) a first-ranking pari passu charge governed by Indian law over the FCCB Repayment Fund and granted jointly and equally in favour of the Onshore Security Trustee (to secure the Bonds), Axis Bank Limited (to secure the Axis Bank Facility) and State Bank of India (to secure the SBI Facility)), as more particularly described in the Deed of Hypothecation,

provided that:

(A) in the case of paragraphs (i) and (ii) above, and subject to the proviso set out in (B) immediately below, upon the unconditional release by or on behalf of the relevant secured creditor(s) of all or any portion of such Existing Onshore Security over such assets or shares (as applicable), the relevant second-ranking security created in favour of the Onshore Security Trustee over such assets or shares (as applicable) will be modified without delay (and, in any event, no later than 10 business days in India) following such release to become and remain first-ranking security (and the Issuer and Promoters and Promoter Group, as applicable, have agreed in the Onshore Security Documents promptly to do all acts and deeds and execute all documents (including the making of all regulatory filings under applicable law with the appropriate governmental authority) to give effect to the same), as more particularly described in the relevant Onshore Security Document,

and provided further that:

(B) subject to obtaining a Reserved Matter Approval (as defined in Condition 4.4 of the New Bond Conditions), the Issuer shall be permitted to grant first-ranking security on an exclusive basis or on a pari passu basis to any existing or new creditor(s) over the relevant assets or shares (as applicable) forming part of the Existing Onshore Security as at the Closing Date and shall not be required to create first-ranking security in favour of the Onshore Security Trustee over such assets or shares (as applicable) at such time as required under (A) immediately above (a) if any such release is made to facilitate or is in connection with (at any time) any addition, transfer, variation, supplement, replacement and/or renewal of the facility to which such Existing Onshore Security relates (and regardless of whether or not any such action involves the same or new creditors or is on the same or new terms), or (b) (at any time) for or in connection with the procurement by the Issuer of any other facility (and regardless of whether or not any such action involves the same or new creditors or is on the same or new terms), and subject, in the case of any action taken under (a) or (b), to the Maximum Debt Level (as defined in Condition 4.2 of the New Bond Conditions) not being exceeded.

In addition to the Onshore Security, the obligations of the Issuer under the New Bonds will be secured by the following security interests located outside of India and granted in favour of the Offshore Security Trustees for the benefit of themselves, the Trustee for the New Bonds, the Agents, the Onshore Security Trustee and the Bondholders (together, the "Offshore Security"):

(a) A charge governed by English law over all the issued share capital of Subex (UK) Limited, a wholly-owned subsidiary of the Issuer incorporated in England and Wales;

(b) A pledge governed by New York law over all the issued share capital of Subex Inc., a directly wholly-owned subsidiary of Subex (UK) Limited incorporated in Delaware, USA;

(c) A charge governed by Singapore law over all the issued share capital of Subex (Asia Pacific) Pte Ltd, a wholly-owned subsidiary of Subex (UK) Limited incorporated in Singapore; and

(d) A charge governed by Ontario law over all the issued share capital of Subex Americas Inc., a wholly-owned subsidiary of the Issuer incorporated in Ontario, Canada.

Bondholders should note that, as at the date of this Notice of Meeting, substantially all of the material assets of the Offshore Secured Subsidiaries have been secured in favour of creditors of the Offshore Secured Subsidiaries. Accordingly, for so long as such existing security subsists, upon any enforcement of the Offshore Security, the Offshore Security Trustees would not be able to effect any sale of any such secured assets and the value of each such Offshore Secured Subsidiary (should it be offered for sale as a going concern) is likely to be significantly reduced.

For these purposes:

Bondholder Directors means directors of the Issuer who have been nominated by the holders of the New Bonds or nominated pursuant to the Extraordinary Resolution in this Notice of Meeting;

Deed of Hypothecation means the unattested deed of hypothecation between the Issuer and the Onshore Security Trustee dated on or about the Closing Date and expressed to be governed by Indian law (as the same may be amended, supplemented and/or restated in accordance with its terms from time to time);

Existing Onshore Security means: (a) a first-ranking pari passu charge over the current and fixed assets of the Issuer and a first-ranking pledge over 4,101,801 equity shares of the Issuer held by Mr. Subash Menon and Kivar Holdings Private Limited, granted in favour of Axis Bank Limited to secure a Rs. 1010 million (approximately U.S.$18.24 million) working capital facility (the Axis Bank Facility); (b) a first-ranking pari passu charge over the current and fixed assets of the Issuer granted in favour of State Bank of India to secure a Rs. 750 million (approximately U.S.$13.55 million) working capital facility (the SBI Facility); and (c) a first-ranking pari passu pledge over 3,500,000 equity shares of the Issuer held by Kivar Holdings Private Limited granted in favour of Easyaccess Financial Services Limited to secure a Rs. 150 million (approximately U.S.$2.71 million) facility;

FCCB Repayment Fund has the meaning given to such term in Condition 1.3 of the New Bond Conditions;

New Security means the Onshore Security and the Offshore Security;

Offshore Secured Subsidiariesmeans each of Subex (UK) Limited, Subex Inc., Subex (Asia Pacific) Pte Ltd, and Subex Americas Inc.;

Offshore Security Trustees means BNY Mellon Corporate Trustee Services Limited (or any branches or affiliates of The Bank of New York Mellon in each relevant jurisdiction) in their capacity as offshore security trustees holding the Offshore Security on trust for the benefit of themselves, the Trustee of the New Bonds, the Agents, the Onshore Security Trustee and the Bondholders (and which term shall, where the context so permits, include all other persons for the time being acting as security trustees under the Offshore Security Documents);

Offshore Security Documents means each of the pledge and/or charge agreements pursuant to which the Offshore Security will be created as described in Condition 1.2 of the New Bond Conditions;

Onshore Security Documents means the Deed of Hypothecation, the Pledge Agreement and the Security Trustee Deed;

Onshore Security Trustee means Axis Trustee Services Limited in its capacity as security trustee in India holding the Onshore Security on trust for the benefit of itself, the Trustee, the Agents, the Offshore Security Trustees and the Bondholders (and which term shall, where the context so permits, include all other persons for the time being acting as security trustee under the Onshore Security Documents);

Pledge Agreement means the pledge agreement between the Promoters and Promoter Group, the Onshore Security Trustee and the Issuer dated on or about the Closing Date and expressed to be governed by Indian law (as the same may be amended, supplemented and/or restated in accordance with its terms from time to time);

Promoters and Promoter Group means (i) as at the Closing Date, each of Mr. Subash Menon, Mr. Sudeesh Yezhuvath and Kivar Holdings Private Limited; and (ii) as of any subsequent date, Mr. Subash Menon, Mr. Sudeesh Yezhuvath, Kivar Holdings Private Limited and/or each other person listed as a promoter of the Issuer under any filings made by the Issuer pursuant to regulations issued by the Securities and Exchange Board of India;

Security Documents means the Onshore Security Documents and the Offshore Security Documents; and

Security Trustee Deed means the security trustee deed dated on or about the Closing Date and made between the Issuer, the Trustee of the New Bonds and the Onshore Security Trustee (as the same may be amended, supplemented and/or restated in accordance with its terms from time to time).

In order for the Issuer to be able to create and issue the New Security, the Issuer is also seeking a waiver from Bondholders of the provisions of Condition 4.1 (Negative Pledge and Other Covenants - Negative Pledge).

Bondholders should note that the Modifications and Waivers would permit the Issuer to take certain previously prohibited actions and may increase the credit risk with respect to the 2% Bonds, may adversely affect the market price of the 2% Bonds and/or may otherwise be materially adverse to the interests of holders of the 2% Bonds.

Documents Available for Inspection

Bondholders may, at any time during normal business hours on any weekday (Saturdays, Sundays and bank and other public holidays excepted) prior to and during the Meeting, obtain copies of the documents listed below at the specified office of the Principal Agent set out below and at the registered office of the Issuer.

Documents available:

·; a copy of this Notice of Meeting;

·; a copy of the 2% Bond Trust Deed;

·; a copy of the First Supplemental Trust Deed;

·; a copy of the Agency Agreement (as defined in the 2% Bond Trust Deed); and

·; a copy of the draft Second Supplemental Trust Deed.

General

The attention of Bondholders is particularly drawn to the quorum required for the Meeting and for an adjourned Meeting which is set out in the 2% Bond Trust Deed and summarised in "- Voting and Quorum" below. Having regard to such requirements, Bondholders are strongly urged either to attend the Meeting or to take steps to be represented at the Meeting, as referred to below, as soon as possible.

None of the 2% Bond Trustee, the Principal Agent or any other Agent expresses any view as to the merits of the Modifications and Waivers or the Extraordinary Resolution but the 2% Bond Trustee has authorised it to be stated that it has no objection to the Modifications and Waivers and the Extraordinary Resolution being put to Bondholders for their consideration. None of the 2% Bond Trustee, the Principal Agent or any other Agent has been involved in negotiating the Modifications and Waivers and none of them makes any representation that all relevant information has been disclosed to the Bondholders in or pursuant to this Notice of Meeting. Accordingly, each of the 2% Bond Trustee and the Principal Agent recommends that Bondholders who are unsure of the impact of the Modifications and Waivers and the Extraordinary Resolution should seek their own financial, tax and legal advice.

The Issuer, the 2% Bond Trustee and the Principal Agent will each bear certain customary legal, accounting and other professional fees and expenses associated with the Modifications and Waivers, as more particularly agreed between them.

All of the 2% Bonds are held by The Bank of New York Mellon Depository (Nominees) Limited, as a nominee of a common depository for Euroclear Bank S.A./N.V. (Euroclear) and/or Clearstream Banking, société anonyme (Clearstream, Luxembourg) (the Registered Bondholder). For the purposes of this Notice of Meeting, holder of Bonds or Bondholder shall mean each person who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principal amount of the 2% Bonds, unless the context otherwise requires, and related expressions shall be construed accordingly, and the passing of the Extraordinary Resolution shall be deemed an instruction to the Registered Bondholder to approve the Extraordinary Resolution in accordance with its terms.

Bondholders who are not Eligible Holders or who decline to participate in the Additional Transaction will be bound by the amendments set out in the Extraordinary Resolution in the event that the Extraordinary Resolution is duly passed at the Meeting.

Voting and Quorum

(1) Eligible Holders or Direct Participants (on behalf of Eligible Holders) may be eligible to participate in the Additional Transaction with respect to all or a portion of their 2% Bonds. Any such Eligible Holders or Direct Participants (on behalf of Eligible Holders) who elect to participate in the Additional Transaction (in the manner set out in the Exchange Offer Memorandum) need take no further action in relation to voting at the Meeting in respect of the Extraordinary Resolution with respect to such 2% Bonds for which they so participate in the Additional Transaction. By participating in the Additional Transaction with respect to all or a portion of its 2% Bonds, the relevant holder of the 2% Bonds will be deemed to have issued instructions to the relevant Clearing System to instruct The Bank of New York Mellon Depository (Nominees) Limited as registered holder of the 2% Bonds to authorise the Principal Agent to issue and complete a block voting instruction in accordance with Schedule 3 (Provisions for meetings of Bondholders) of the 2% Bond Trust Deed and in such block voting instruction to appoint the Principal Agent as proxy to vote in favour of the Extraordinary Resolution at the Meeting of Holders for the applicable 2% Bonds and any adjournment thereof in respect of the full principal amount of 2% Bonds of such series submitted for exchange.

(2) BONDHOLDERS AND DIRECT PARTICIPANTS (DIRECTLY OR ON BEHALF OF BENEFICIAL OWNERS) WHO BELIEVE THAT THEY MAY BE ELIGIBLE TO PARTICIPATE IN THE ADDITIONAL TRANSACTION ARE URGED NOT TO VOTE (BY PROXY, BLOCK VOTING INSTRUCTION OR OTHERWISE) FOR OR AGAINST THE EXTRAORDINARY RESOLUTION UNTIL SUCH TIME THAT ADDITIONAL INFORMATION WITH RESPECT TO THE ADDITIONAL TRANSACTION IS MADE AVAILABLE TO THEM.

(3) The provisions governing the convening and holding of the Meeting are set out in Schedule 3 (Provisions for meetings of Bondholders) to the 2% Bond Trust Deed, a copy of which is available for inspection as referred to above.

(4) A Bondholder wishing to attend and vote at the Meeting in person must produce a valid voting certificate or valid voting certificates issued by the Principal Agent relative to the Bond(s), in respect of which it wishes to vote.

(5) A Bondholder not wishing to attend and vote at the Meeting in person may, in accordance with the procedures of Clearstream, Luxembourg or Euroclear, instruct the Principal Agent to issue a block voting instruction and appoint a proxy (or, in the case of a Bondholder that is a corporation, a representative) to attend and vote at the Meeting in accordance with its instructions.

(6) An accountholder with Euroclear or Clearstream, Luxembourg (an Accountholder) who wishes to obtain a voting certificate or procure the Principal Agent to issue a block voting instruction and appoint a proxy (or, as the case may be, representative) to attend and vote at the Meeting (or, if applicable, any adjourned such Meeting) on his behalf should (not less than 48 hours before the time appointed for the holding of the Meeting (or, if applicable, any adjourned such Meeting) and within the relevant time limit specified by Euroclear or Clearstream, Luxembourg (as the case may be)) request the relevant clearing system to block the 2% Bonds in his own account and to hold the same to the order or under the control of the Principal Agent.

(7) An Accountholder whose 2% Bonds have been so blocked will thus be able to obtain a voting certificate from the Principal Agent, or procure that a block voting instruction is given either by deposit of a voting instruction form with or otherwise in accordance with the procedures of Euroclear or Clearstream, Luxembourg. For the avoidance of doubt, an Accountholder may obtain a voting certificate or procure a block voting instruction from the Principal Agent to the extent that the Accountholder has deposited voting instructions with Euroclear or Clearstream, Luxembourg no later than 10 a.m. (London time) on 2 July 2012.

(8) Any Bond(s) so held and blocked for the purpose of obtaining a voting certificate will be released to the Accountholder by the relevant clearing system on the earliest of (i) the conclusion of the Meeting (or, if applicable, any adjourned such Meeting) and (ii) (within the time limit specified by the relevant clearing system) the surrender of the voting certificate to the Principal Agent who issued the same.

(9) Any Bond(s) so held and blocked for the purpose of obtaining a block voting instruction will be released to the Accountholder by the relevant clearing system on the earliest of (i) the conclusion of the Meeting (or, if applicable, any adjourned such Meeting) and (ii) (within the time limit specified by the relevant clearing system) such 2% Bond(s) ceasing in accordance with the procedures of the relevant clearing system and with the agreement of the Principal Agent to be held to its order or under its control; provided, however, in the case of (ii) above, that if the Principal Agent has caused a block voting instruction to be delivered to the Issuer in respect of such Bond(s), such Bond(s) will not be released to the relevant Accountholder unless and until the Principal Agent has notified the Issuer of the necessary revocation of or amendment to such block voting instruction.

(10) At the Meeting, the quorum required to pass the Extraordinary Resolution is two or more persons present in person holding voting certificates or being proxies or representatives and holding or representing in the aggregate not less than 75 per cent. in principal amount of the 2% Bonds for the time being outstanding (as defined in the 2% Bond Trust Deed). If a quorum is not present at the Meeting, the Meeting will be adjourned and the Extraordinary Resolution will be considered at an adjourned Meeting (notice of which will be given to Bondholders). The quorum at such adjourned Meeting shall be two or more persons present in person holding voting certificates or being proxies or representatives and holding or representing in the aggregate not less than 25 per cent. in principal amount of the 2% Bonds for the time being outstanding (as defined in the 2% Bond Trust Deed).

(11) Whilst the 2% Bonds are represented by the Global Certificate, the registered holder thereof is treated as two persons for the purposes of any quorum requirements of a meeting of Bondholders and, at any such meeting, as having one vote in respect of each U.S.$100,000 in principal amount of 2% Bonds in respect of which the Global Certificate is issued.

(12) Every question submitted to each Meeting shall be decided in the first instance by a show of hands and in case of equality of votes, the chairman of the Meeting shall both on a show of hands and on a poll have a casting vote in addition to the vote or votes (if any) to which he may be entitled as a holder of a voting certificate or as a proxy or representative. A poll may be demanded by the chairman of the Meeting, the Issuer, the 2% Bond Trustee or any person present holding a voting certificate or being a proxy or representative of in the aggregate not less than 2 per cent. in principal amount of the 2% Bonds for the time being outstanding (as defined in the 2% Bond Trust Deed). On a show of hands every person who is present in person and produces a voting certificate or is a proxy or representative shall have one vote. On a poll every person who is so present shall have one vote in respect of each U.S.$100,000 in principal amount of the 2% Bonds represented by the voting certificate so produced or in respect of which he is a proxy or representative.

(13) To be passed, the Extraordinary Resolution requires a majority in favour consisting of not less than three-quarters of the votes cast. If passed, the Extraordinary Resolution shall be binding upon all the Bondholders whether present or not present at the Meeting and whether or not voting, and each of them shall be bound to give effect to it accordingly.

(14) Notice of the results of the Meeting to vote on the Extraordinary Resolution shall be given to Bondholders by the Issuer as soon as possible after the Meeting but in any event no later than seven days following the Meeting.

(15) This Notice of Meeting and all non-contractual obligations arising out of or in connection with it are governed by, and shall be construed in accordance with, English law.

(16) Bondholders whose 2% Bonds are held by Euroclear or Clearstream, Luxembourg should contact the following for further information:

Euroclear: Custody Operations Department Tel: (Brussels)

+322 224 4245, Fax: +322 224 1459

Clearstream, Luxembourg: Corporate Action (CIE) Department Tel: (Luxembourg)

+352 46 564 8065, Fax: +352 46 564 8248

(17) The address and contact details of the Principal Agent and Paying Agent with respect to the 2% Bonds are as follows:

The Bank of New York Mellon

One Canada Square

London E14 5AL

Attention: Trustee Administration Manager

Fax: +44 20 7964 4637

This Notice of Meeting is given by:

SUBEX LIMITED

13 June 2012

SCHEDULE 1

Minimum Denominations and Representations

To be eligible to participate in the Additional Transaction referenced in the Notice of Meeting to which this Schedule is attached, Bondholders or Direct Participants (directly or on behalf of beneficial owners) must (i) hold a certain minimum denomination of 2% Bonds (expected to be approximately U.S.$200,000) and (ii) be able to make certain representations, which are likely to include the representations set out below. Such holders are urged not to vote (by proxy, block voting instruction or otherwise) for or against the Proposals set forth in the Notice of Meeting until such time that the Exchange Offer Memorandum with respect to the Additional Transaction is made available to them.

1 You (a) are not located or resident in the United States and are not a U.S. person (as defined in Regulation S under U.S. Securities Act of 1933 (the Securities Act); (b) will participate in the Additional Transaction in an offshore transaction in accordance with Regulation S under the Securities Act; and (c) are not an agent, fiduciary or other intermediary acting on a non-discretionary basis for a principal giving instructions with respect to the Additional Transaction from within the United States or for a U.S. person;

2 You (a) (1) are not resident or located in the Republic of Italy or a person located in the Republic of Italy; and (2) you will receive materials related to the Additional Transaction outside Italy and are not acting on behalf of persons resident in and/or located in the Republic of Italy or (b) are a current holder of 2% Bonds and are a qualified investor (investitor qualificato), pursuant to Article 100 of Legislative Decree no. 58 dated 24 February 1998, as amended (the Financial Services Act), as defined in Article 34-ter of Regulation no. 11971 dated 14 May 1999 of Commissione Nazionale delle Società e della Borsa (the Italian Securities Exchange Commission, the CONSOB), as amended from time to time (Regulation no. 11971);

3 You are not a person resident in the Republic of India (as defined in the Foreign Exchange Management Act, 1999, as amended);

4 If you are resident or located in Australia, you are a professional investor as defined in section 9 of the Corporations Act 2001 (Cth) or a wholesale client as defined in section 761G of the Corporations Act 2001 (Cth);

5 If you are resident or located in France, you are either: (a) a qualified investor (investisseur qualifié) who is not an individual; or (b) a provider of investment services relating to portfolio management for the account of third parties (all as defined in Article L.411-1, L.411-2 and D.411-1 to D.411-3 of the French Code Monétaire et Financier);

6 If you are resident or located in Belgium, you are a "qualified investor" referred to in Article 6, paragraph 3 of the Law of 1 April 2007 on public acquisition offers, acting on your own account;

7 If you are resident or located in Hong Kong, you are (a) a professional investor as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong and any rules made under that Ordinance; and (b) will only receive the materials related to the Additional Transaction in circumstances which do not result in such materials being a "prospectus" as defined in the Companies Ordinance (Cap. 32) of Hong Kong or which do not constitute an offer to the public within the meaning of that Ordinance;

8 If you are resident or located in Malaysia, you are a person who can receive the materials related to the Additional Transaction within the conditions specified in Schedules 6 and 7 of the Capital Markets and Services Act 2007;

9 If you are resident or located in the Philippines you are a person whose receipt of the materials related to the Additional Transaction constitutes an exempt transaction under the Securities Regulation Code (Republic Act No. 8799);

10 You are outside Singapore or, if you are located in Singapore, you are a holder of 2% Bonds and you acknowledge that the materials related to the Additional Transaction have not been registered as a prospectus with the Monetary Authority of Singapore and are only made available to holders of 2% Bonds;

11 If you are resident or located in Spain, you are a qualified investor (Inversor Cualificado) as defined in article 39 of the Spanish Royal Decree 1310/2005 of 4 November 2005 or you will receive the materials related to the Additional Transaction pursuant to and in compliance with Law 24/1988, as amended, Royal Decree 1310/2005 and any regulation issued thereunder;

12 You will not acquire the materials related to the Additional Transaction in Switzerland other than lawfully on a private placement basis; and

13 If you are resident or located in the United Kingdom, you are (a) a person falling within the definition of investment professional (as defined in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the Order)); or (b) a high net worth entity as defined in the Order or another person to whom the offer may lawfully be communicated falling within Article 49(2)(a) to (e) of the Order; or (c) a person falling within Article 43 of the Order.

SCHEDULE 2

Form of Second Supplemental Trust Deed for 2% Bonds

[Begins on following page]

Contents

Clause Page

1 Definitions and Interpretation................................................................................................................................... 17

2 Modifications and Waivers to the Principal Trust Deed....................................................................................... 18

3 Conditions Precedent.................................................................................................................................................. 19

4 Costs, Expenses and Indemnification....................................................................................................................... 19

5 Trust Deed.................................................................................................................................................................... 19

6 Notices.......................................................................................................................................................................... 20

7 Counterparts................................................................................................................................................................. 20

8 Governing Law and Jurisdiction................................................................................................................................ 20

9 Third Party Rights....................................................................................................................................................... 20

Schedule 1 Conditions Precedent.......................................................................................................................................... 21

Schedule 2 Conditions Precedent Confirmation Letter....................................................................................................... 22

Schedule 3 Form of Officers' Certificate............................................................................................................................... 24

THIS SECOND SUPPLEMENTAL TRUST DEED is made on [●] July 2012

BETWEEN:

(1) Subex Limited (the Issuer); and

(2) The Bank of New York Mellon, acting through its London Branch (the Trustee).

WHEREAS:

(A) The Issuer and the Trustee have entered into a trust deed (the Original Trust Deed) originally dated 8 March 2007 constituting the Issuer's US$180,000,000 2% Coupon Convertible Bonds due 2012 Convertible into Equity Shares of Subex Limited (formerly Subex Azure Limited) (the Bonds).

(B) By an Extraordinary Resolution dated 6 March 2012, the Bondholders (as defined in the Principal Trust Deed) consented to amend the Original Trust Deed, and requested the Trustee to concur in such amendments and execute a first supplement trust deed (the First Supplemental Trust Deed), in order to amend the definition of Maturity Date appearing in Condition 8.1 (Redemption, Purchase and Cancellation - Maturity) from 9 March 2012 to 9 July 2012 (the Original Trust Deed as amended by the First Supplemental Trust Deed, the Principal Trust Deed).

(C) By an Extraordinary Resolution dated [●] July 2012 (the Extraordinary Resolution), the Bondholders approved, assented and agreed to the Modifications and Waivers (as defined below), and requested the Trustee to concur in such Modifications and Waivers and to execute this second supplement trust deed to give effect thereto (the Second Supplemental Trust Deed).

(D) Pursuant to an exchange offer memorandum dated 13 June 2012 (the Exchange Offer Memorandum), the Issuer announced the launch of a cashless exchange offer (the Exchange Offer) pursuant to which new senior U.S. dollar-denominated 5.70 per cent secured convertible bonds due 2017 (convertible into ordinary shares of the Issuer) (the New Bonds) will be issued to those holders of Bonds and 5% Bonds (as defined below) who agree, and are eligible, to participate in the exchange offer (as described in more detail in the Exchange Offer Memorandum).

(E) In a letter dated 27 April 2012, the Issuer obtained the in-principle approval of the Reserve Bank of India, among other things, to conduct the Exchange Offer, to issue the New Bonds, to create certain security interests in relation to the New Bonds, and to amend the terms of the Bonds pursuant to the Extraordinary Resolution.

NOW THIS DEED WITNESSETH and it is hereby agreed and declared as follows:

1 Definitions and Interpretation

All words and expressions defined in the Principal Trust Deed (including, for the avoidance of doubt, in the Terms and Conditions of the Bonds (the Conditions) set out in Schedule 1 thereto) shall where the context so requires and admits have the same meaning in this Second Supplemental Trust Deed. In addition, in this Second Supplemental Trust Deed the following expressions have the following meanings:

5% Bonds means the Issuer's outstanding US$98,700,000 5% Convertible Unsecured Bonds due 2012 convertible into ordinary shares of the Issuer;

Conditions Precedent means the conditions precedent set out in Schedule 1of this Second Supplemental Trust Deed;

Conditions Precedent Confirmation Letter means the letter from the Issuer substantially in the form set out in Schedule 2;

FCCB Repayment Fund has the meaning given to such term in the Exchange Offer Memorandum;

Modifications and Waivers has the meaning given to such term in Clause 2;

New Bonds Trust Deed means a trust deed constituting the New Bonds and made between the Issuer and The Bank of New York Mellon, London Branch as trustee for the holders of the New Bonds;

New Debt means additional Relevant Indebtedness incurred by the Issuer upon issuance of the New Bonds;

New Security has the meaning given to such term in the Exchange Offer Memorandum;

Registered Bondholder means The Bank of New York Mellon Depository (Nominees) Limited; and

Restructuring Plan has the meaning given to such term in the Exchange Offer Memorandum.

2 Modifications and Waivers to the Principal Trust Deed

2.1 Pursuant to the Extraordinary Resolution, and in accordance with Clause 15.1 of the Principal Trust Deed and Condition 14 (Meetings of Bondholders, Modification, Waiver and Substitution), the Issuer and the Trustee (acting on behalf, and on the instructions, of the Bondholders pursuant to the Extraordinary Resolution) agree that the terms and conditions of the Principal Trust Deed, with effect from the date hereof (subject to the prior satisfaction of each of the Conditions Precedent), shall be amended, waived, varied and modified as follows:

(a) (1) the definition of Maturity Date appearing in Condition 8.1 (Redemption, Purchase and Cancellation - Maturity) (as first amended by the First Supplemental Trust Deed) shall be further amended from 9 July 2012 to 9 March 2017, such that the Maturity Date of the Bonds shall, with effect from the date on which settlement of the Exchange Offer occurs (such settlement being the date on or after the date hereof as notified in writing by the Issuer to the Trustee, but which must not be later than 6 July 2012), be 9 March 2017 instead of 9 July 2012, and all references to the defined term Maturity Date in the Principal Trust Deed and the Conditions shall be construed accordingly, and (2) amending the definition of Conversion Period appearing in Condition 6.1 (Conversion - Conversion Right - Conversion Period), such that the end of the Conversion Period applicable to the Bonds shall with effect from the date hereof be the close of business (at the place where the Certificate evidencing the relevant Bonds is deposited for conversion) on 29 January 2017 (or, if that is not a business day, on the immediately preceding business day), instead of 29 January 2012, and all references to the defined term Conversion Period in the Principal Trust Deed and the Conditions shall be construed accordingly (together, the Modifications);

(b) for the avoidance of doubt, pursuant to the Modifications, scheduled interest only on the Bonds shall continue to accrue in accordance with the provisions set out in Condition 5.1 (Interest - Interest) to, but excluding, 9 March 2017 and the Issuer shall redeem each Bond then outstanding at 136.04% of its principal amount on 9 March 2017 in accordance with Condition 8.1 (Redemption, Purchase and Cancellation - Maturity);

(c) pursuant to the relevant approval of the Bondholders granted in the Extraordinary Resolution (and notwithstanding the restrictions on the incurrence of additional Relevant Indebtedness contained in Condition 4.2 (Negative Pledge and Other Covenants - Other Covenants)), the incurrence by the Issuer of the New Debt and any additional Relevant Indebtedness pursuant to the Exchange Offer is approved and permitted and Condition 4.2 (Negative Pledge and Other Covenants - Other Covenants) shall at all times be construed as varied accordingly to permit the New Debt and any additional Relevant Indebtedness incurred pursuant to the Exchange Offer (the New Debt Approval);

(d) the provisions, restrictions and requirements of Condition 4.1 (Negative Pledge and Other Covenants - Negative Pledge) are irrevocably waived and varied such that the creation and subsistence of the New Security pursuant to the Exchange Offer shall at all times expressly be permitted, approved and authorised by the Bondholders and the Trustee (acting on the instructions of the Bondholders) and shall not at any time constitute, or be determined or regarded as, or be alleged by the Bondholders, the Trustee or any other person to be, a breach of Condition 4.1 (Negative Pledge and Other Covenants - Negative Pledge) (or any other provision of the Bonds, the Conditions, the Principal Trust Deed or the Agency Agreement) or an Event of Default or Potential Event of Default, and Condition 4.1 (Negative Pledge and Other Covenants - Negative Pledge) and the Principal Trust Deed shall at all times be construed as varied accordingly to permit the creation and subsistence at all times of the New Security (the Negative Pledge Waiver);

(e) (A) any and all existing Events of Default or Potential Events of Default under the Principal Trust Deed and the Conditions as well as any Events of Default or Potential Events of Default that may occur as a result of the execution of the Exchange Offer, the incurrence of the New Debt, the creation and subsistence of the New Security and/or the Modifications are irrevocably waived and (B) the provisions and requirements of Condition 6.3 (Adjustment to Conversion Price) are irrevocably waived and varied such that the execution of the Exchange Offer, the incurrence of the New Debt, the creation and subsistence of the New Security and/or the Modifications shall at all times expressly be permitted, approved and authorised by the Bondholders and the Trustee (acting on the instructions of the Bondholders) and shall not at any time constitute, or be determined or regarded as, or be alleged by the Bondholders, the Trustee or any other person to be, an event requiring an adjustment to be made to the Conversion Price (as defined in the Conditions) under Condition 6.3 (Adjustment to Conversion Price) (or any other provision of the Bonds, the Conditions, the Principal Trust Deed or the Agency Agreement), and Condition 6.3 (Adjustment to Conversion Price) and the Principal Trust Deed shall at all times be construed as varied accordingly ((A) and (B) together, the Waivers and, together with the Modifications, the New Debt Approval and the Negative Pledge Waiver, the Modifications and Waivers); and

(f) the Modifications and Waivers are hereby effected in accordance with and pursuant to the relevant terms of the Principal Trust Deed and the Conditions and, for the avoidance of doubt, the Modifications and Waivers do not constitute and shall not at any time be construed by the Bondholders or the Trustee as an Event of Default or Potential Event of Default.

3 Conditions Precedent

The Issuer and the Trustee agree that each of the Conditions Precedent must be met as conditions precedent to the execution and delivery of this Second Supplemental Trust Deed.

4 Costs, Expenses and Indemnification

4.1 Clauses 10.3 and 10.4 of the Principal Trust Deed shall apply, mutatis mutandis, to this Second Supplemental Trust Deed.

4.2 In addition, the Issuer agrees and undertakes fully and effectively to indemnify and hold harmless the Trustee and the Registered Bondholder and the officers, directors and employees of each of the Trustee and the Registered Bondholder (together, the Indemnified Parties) from and against (i) all losses, liabilities, damages, costs, charges and expenses which may be suffered or incurred by any of the Indemnified Parties as a result of any claims (whether or not successful, compromised or settled), actions, demands or proceedings brought or established against any Indemnified Party which do not result from any fraud, gross negligence and/or wilful default on the part of any Indemnified Party and (ii) against any and all other losses, costs, damages, charges or expenses (including legal fees) which an Indemnified Party may suffer or incur which in any case arise as a result of such Indemnified Party acting in reliance on the Conditions Precedent Confirmation Letter delivered to it by the Issuer and in accordance with the Extraordinary Resolution and this Second Supplemental Trust Deed.

5 Trust Deed

This Second Supplemental Trust Deed is supplemental to the Principal Trust Deed and, subject to the Modifications and Waivers to be effected to the Principal Trust Deed hereunder, the Principal Trust Deed and the Bonds shall remain in full force and effect and the Principal Trust Deed and this Second Supplemental Trust Deed shall be read and construed together as one deed. The provisions of the Principal Trust Deed will, except as amended by this Second Supplemental Trust Deed, continue in full force and effect.

6 Notices

6.1 A memorandum of this Second Supplemental Trust Deed shall be endorsed on the original of the Principal Trust Deed by the Trustee and on the duplicate thereof by the Issuer.

6.2 The Issuer shall, as soon as practicable after the Modifications and Waivers set out in Clause 2 of this Second Supplemental Trust Deed become effective, give notice thereof to the Bondholders in accordance with Condition 17 (Notices).

7 Counterparts

This Second Supplemental Trust Deed may be executed in any number of counterparts, each of which is an original and all of which together evidence the same agreement. This Second Supplemental Trust Deed shall not come into effect until each party has executed and delivered at least one counterpart.

8 Governing Law and Jurisdiction

8.1 Governing Law

This Second Supplemental Trust Deed and any non-contractual obligations arising out of or in connection with it are governed by, and shall be construed in accordance with, the laws of England.

8.2 Jurisdiction

(a) The courts of England have exclusive jurisdiction to settle any dispute arising from or connected with this Second Supplemental Trust Deed (a Dispute) (including a dispute regarding the existence, validity or termination of this Second Supplemental Trust Deed or relating to any non-contractual or other obligation arising out of or in connection with this Second Supplemental Trust Deed) or the consequences of its nullity.

(b) The parties agree that the courts of England are the most appropriate and convenient courts to settle any Dispute and, accordingly, that they will not argue to the contrary.

(c) Notwithstanding Clause 8.2(a), this Clause does not prevent any of the Trustee or each of the Bondholders from taking proceedings relating to a Dispute (Proceedings) in any other courts with jurisdiction. To the extent allowed by law, any of the Trustee or each of the Bondholders may take concurrent Proceedings in any number of jurisdictions.

8.3 Service of process

The Issuer irrevocably appoints Norose Notices Limited (for the attention of the Partnership Office Manager (Reference: LN50578)), 3 More London Riverside, London SE1 2AQ, United Kingdomas its authorised agent for service of process in England. Subject to applicable law, such service shall be deemed to be completed on delivery to such process agent (whether or not it is forwarded to and received by the Issuer). The Issuer will procure that, so long as any of the Bonds is outstanding, there shall be in force an appointment of such a person with an office in England with authority to accept service as aforesaid on behalf of the Issuer and, failing such appointing within 15 days after demand by or on behalf of the Trustee, the Trustee shall be entitled by notice to the Issuer to appoint such person at the cost of the Issuer. Nothing herein shall affect the right to serve process in any other manner permitted by law.

9 Third Party Rights

9.1 Save for the Registered Bondholder (who may enforce its rights under Clause 4.2), a person who is not party to this Second Supplemental Trust Deed may not enforce any terms of this Second Supplemental Trust Deed under the Contract (Rights of Third Parties) Act 1999, but this does not affect any right or remedy of any third party which exists or is available apart from that Act.

IN WITNESS WHEREOF this Second Supplemental Trust Deed has been executed as a deed by the parties hereto and is intended to be and is hereby delivered on the day first before written.

Schedule 1Conditions Precedent

Schedule 2Conditions Precedent Confirmation Letter

[to be on Subex Limited Letterhead]

Dated: [closing date] July 2012

To: THE BANK OF NEW YORK MELLON, ACTING THROUGH ITS LONDON BRANCH, as trustee (the Trustee) for the holders (the Bondholders) of the outstanding US$180,000,000 2% Coupon Convertible Bonds due 2012 Convertible into Equity Shares of Subex Limited (formerly known as Subex Azure Limited), issued by Subex Limited (the Issuer) constituted by a trust deed dated 8 March 2007 between the Issuer and The Bank of New York Mellon, acting through its London Branch, as amended pursuant to a first supplemental trust deed dated 6 March 2012.

Re: Second Supplemental Trust Deed - satisfaction of conditions precedent

We refer to Schedule 1 of the form of the second supplemental trust deed attached to the Notice of Meeting of Bondholders dated 13 June 2012 (the Second Supplemental Trust Deed). Capitalised terms in this letter which are not otherwise defined shall have the same meaning as used in the Issuer's Exchange Offer Memorandum dated 13 June 2012.

We hereby confirm that each of the following matters (collectively, the Conditions Precedent) has been satisfied or (if permitted) waived by a majority of the Bondholders on or before the date hereof:

(a) An extraordinary resolution has been passed by the holders of the 5% Bonds approving modifications and waivers in respect of the 5% Bonds which are equivalent to those set out in the Extraordinary Resolution passed by the holders of the 2% Bonds (and, for the avoidance of doubt, including the modification of the maturity date of the 5% Bonds to 9 March 2017 instead of 9 July 2012 and related amendments) (the 5% Bonds Modifications and Waivers);

(b) The Issuer will, and the 5% Bond Trustee has been authorised by the Existing 5% Bonds Extraordinary Resolution to, enter into a supplemental trust deed to give effect to the 5% Bonds Modifications and Waivers on the same date as the Second Supplemental Trust Deed;

(c) The Trust Deed for the New Bonds and the Security Documents have been entered into on the same date as the Second Supplemental Trust Deed;

(d) The Issuer has sufficient authorised capital for the conversion of the New Bonds, the 2% Bonds and the 5% Bonds;

(e) The final approvals of the RBI and an Authorised Dealer Category 1 Bank have been received for the creation of the New Security (including the FCCB Repayment Fund);

(f) Mr. Harry Berry, Mr. Andrew Garman and Mr. V. Balaji Bhat have resigned as directors from the board of directors of the Issuer and two Bondholder Directors nominated by the Existing Bondholders have been appointed to the board of directors of the Issuer;

(g) The Issuer has obtained all necessary internal, corporate and other approvals and consents and complied with all applicable securities and other laws in relation to the Restructuring Plan (including, without limitation, obtaining the consent of the RBI to the Restructuring Plan and shareholder approval for the issue of the New Bonds);

(h) There has been no material adverse change in the financial position or prospects of the Issuer since 31 March 2012;

(i) The Issuer has unconditionally and irrevocably cancelled any and all existing securities and rights to issue securities of the Issuer, other than the 5% Bonds, the 2% Bonds, the New Bonds, the equity shares of the Issuer which are to be issued to its employees pursuant to the employees' stock option plans established by the Issuer and the 69,310,772 existing issued equity shares of the Issuer of face value of Rs. 10 each;

(j) The Issuer has obtained the consents of all lenders and other third parties having contractual rights requiring their approval in order to implement the Restructuring Plan;

(k) The Issuer has executed and delivered to the Trustee for the New Bonds an Officers' Certificate, in the form attached as Schedule 3 to, and on the same date as, each Second Supplemental Trust Deed;

(l) No person who is a "Promoter" of the Issuer received any bonus from the Issuer in the two financial years ended 31 March 2012;

(m) the Issuer having confirmed that its only contractual obligation to make payments upon separation to Mr. Subash Menon in relation to his employment by the Company is as set out in the contract of employment dated 30 April 2007 as amended pursuant to an amendment agreement dated on or about 12 June 2012;

(n) the Issuer having confirmed that its only contractual obligation to make payments upon separation to Mr. Sudeesh Yezhuvath in relation to his employment by the Company is as set out in the contract of employment dated 31 March 2011 as amended pursuant to an amendment agreement dated on or about 12 June 2012;

(o) In-principle approval has been obtained (i) for the listing of the New Bonds on the SGX-ST and (ii) for listing the Shares to be issued upon conversion of the New Bonds on the BSE and the NSE; and

(p) The Issuer has confirmed that no information has been provided to the holders of the 5% Bonds and the 2% Bonds which would constitute unpublished price-sensitive information about the Issuer.

Yours faithfully

SUBEX LIMITED

________________________________________

Name:

Title: Director

Copy to:

The Bank of New York Mellon, acting through its London Branch, as trustee for the holders of the 5% Bonds; and

The Bank of New York Mellon, acting through its London Branch, as trustee for the holders of the New Bonds

Schedule 3Form of Officers' Certificate

[to be on Subex Limited letterhead]

To: THE BANK OF NEW YORK MELLON, ACTING THROUGH ITS LONDON BRANCH, as trustee (the Trustee) for the holders (the Bondholders) of the outstanding US$180,000,000 2% Coupon Convertible Bonds due 2012 Convertible into Equity Shares of Subex Limited (formerly known as Subex Azure Limited), issued by Subex Limited (the Issuer) constituted by a trust deed dated 8 March 2007 between the Issuer and The Bank of New York Mellon, acting through its London Branch, as amended pursuant to a first supplemental trust deed dated 6 March 2012.

Date: [closing date] July 2012

The undersigned officers hereby certify for and on behalf of the Issuer that the representations, warranties and covenants of the Issuer set forth below are true and correct on the date hereof:

1 The operations of the Issuer have been, are and will be conducted at all times in compliance with all applicable anti-money laundering laws, statutes, rules and regulations and any related or similar laws, statutes, rules, regulations or guidelines issued, administered or enforced by any governmental agency in the jurisdictions in which the Issuer is subject thereto (collectively, the Anti-Money Laundering Laws), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Issuer with respect to the Anti-Money Laundering Laws is pending or, to the best knowledge of the Issuer, threatened.

2 Neither the Issuer nor any of its affiliates, directors, officers, employees, agents or representatives, directly or indirectly, has violated, is in violation of, or will violate any of the following (as if the same are applicable to the Issuer and each of its affiliates, directors, officers, employees, agents or representatives): (i) any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended, or the rules and regulations promulgated thereunder (collectively, the FCPA); (ii) the U.K. Bribery Act; (iii) the Canada Corruption of Foreign Public Officials Act; or (iv) any provision of equivalent laws of any other jurisdiction relevant to the Issuer's operations or to which the Issuer or any of its subsidiaries or representatives may be subject.

3

(a) Neither the Issuer nor any of its subsidiaries or any of its or their affiliates, directors, officers, employees, agents or representatives, is or is controlled by a person (a Banned Person) which is a government, an individual or entity that is:

(i) the subject of any sanctions administered or enforced by the U.S. Department of Treasury's Office of Foreign Assets Control, the United Nations Security Council, the European Union, Her Majesty's Treasury, Foreign Affairs and International Trade Canada or other relevant sanctions authority (collectively, Sanctions), nor

(ii) located, organised or resident in a country or territory that is the subject of Sanctions (including, without limitation, Burma/Myanmar, Cuba, Iran, North Korea, Syria and Sudan).

(b) The Issuer represents and covenants that for the past five years, it and its subsidiaries have not knowingly engaged in, are not now knowingly engaged in, and the Issuer will not and will procure that its subsidiaries do not knowingly engage in, any dealings or transactions with any Banned Person, or in any country or territory, that at the time of the dealing or transaction is or was the subject of Sanctions.

4 In connection with the above representations, warranties and covenants, the Issuer shall maintain or promptly (and, in any event, within 60 days of the date hereof) implement all necessary and appropriate controls and procedures reasonably to ensure that:

(a) the Issuer conducts its operations in a manner consistent with the Anti-Money Laundering Laws; and

(b) no violation of the FCPA, the U.K. Bribery Act, the Canada Corruption of Foreign Public Officials Act, or any provision of equivalent laws of any other jurisdiction relevant to the Issuer's operations (in each case, as if the same are applicable to the Issuer) will arise as a result of the Issuer's operations, including, to the best of its knowledge after due inquiry, the operations of its affiliates, directors, officers, employees, agents or representatives; and

(c) the Issuer and, to the best of its knowledge after due inquiry, its affiliates, directors, officers, employees, agents or representatives are not controlled by, and do not knowingly fund or transact business with, a Banned Person.

5 Without limitation to the above, the Issuer represents and covenants that it and its subsidiaries are not, and the Issuer will not be (and will procure that its subsidiaries are not), knowingly in violation or default in any material respect of any other provision of applicable law or regulation or any judgment, order or decree of any court or governmental, administrative or regulatory agency or body or stock exchange authority having jurisdiction over it or any of its assets.

DATED at Bangalore, India, [●] July 2012

SUBEX LIMITED

By: _____________________________________________

Subash Menon

Chairman, Managing Director & CEO

By: _____________________________________________

Ramanathan J

Vice President - Finance & Company Secretary

Copy to:

The Bank of New York Mellon, acting through its London Branch, as trustee for the holders of the 5% Bonds; and

The Bank of New York Mellon, acting through its London Branch, as trustee for the holders of the New BondsSIGNATURES

EXECUTED AND DELIVERED AS A DEED BY

SUBEX LIMITED

Acting by its duly authorised signatory/ies:

_______________________________

Name:

Title:

_______________________________

Name:

Title:

The Trustee

EXECUTED AND DELIVERED AS A DEED BY

THE BANK OF NEW YORK MELLON

By: