vmiklos@vmobile:~/git/test$ ls
vmiklos@vmobile:~/git/test$ mkdir server
vmiklos@vmobile:~/git/test$ cd server
vmiklos@vmobile:~/git/test/server$ mkdir main
vmiklos@vmobile:~/git/test/server$ cd main
vmiklos@vmobile:~/git/test/server/main$ git init
Initialized empty Git repository in .git/
vmiklos@vmobile:~/git/test/server/main$ echo "foo" > main.c
vmiklos@vmobile:~/git/test/server/main$ git add main.c
vmiklos@vmobile:~/git/test/server/main$ git commit -m "import main"
Created initial commit 1ceae8f: import main
 1 files changed, 1 insertions(+), 0 deletions(-)
 create mode 100644 main.c
vmiklos@vmobile:~/git/test/server/main$ cd ..
vmiklos@vmobile:~/git/test/server$ mkdir libfoo
vmiklos@vmobile:~/git/test/server$ cd libfoo
vmiklos@vmobile:~/git/test/server/libfoo$ git init
Initialized empty Git repository in .git/
vmiklos@vmobile:~/git/test/server/libfoo$ echo "foo" > libfoo.c
vmiklos@vmobile:~/git/test/server/libfoo$ git add libfoo.c
vmiklos@vmobile:~/git/test/server/libfoo$ git commit -m "import libfoo"
Created initial commit 5979d36: import libfoo
 1 files changed, 1 insertions(+), 0 deletions(-)
 create mode 100644 libfoo.c
vmiklos@vmobile:~/git/test/server/libfoo$ cd ../..
vmiklos@vmobile:~/git/test$ mkdir client
vmiklos@vmobile:~/git/test$ cd client
vmiklos@vmobile:~/git/test/client$ git clone ../server/main
Initialized empty Git repository in /home/vmiklos/git/test/client/main/.git/
remote: Generating pack...
Done counting 3 objects.
Deltifying 3 objects...
 100% (3/3) done
Total 3 remote: (delta 0), reused 0 (delta 0)
Indexing 3 objects...
 100% (3/3) done

vmiklos@vmobile:~/git/test/client$ cd main
vmiklos@vmobile:~/git/test/client/main$ ls
main.c
vmiklos@vmobile:~/git/test/client/main$ git submodule add ../../server/libfoo/ libfoo
Initialized empty Git repository in /home/vmiklos/git/test/client/main/libfoo/.git/
remote: Generating pack...
remote: Done counting 3 objects.
remote: Deltifying 3 objects...
 100% (3/3) done
Total 3 (delta 0), reused 0 (delta 0)
Indexing 3 objects...
 100% (3/3) done

vmiklos@vmobile:~/git/test/client/main$ git submodule init
Submodule 'libfoo' (/home/vmiklos/git/test/server/libfoo/.git) registered for path 'libfoo'
vmiklos@vmobile:~/git/test/client/main$ git commit -a -m "registered libfoo submodule"
Created commit 2c65310: registered libfoo submodule
 2 files changed, 4 insertions(+), 0 deletions(-)
 create mode 100644 .gitmodules
 create mode 160000 libfoo
vmiklos@vmobile:~/git/test/client/main$ cd ../../server/main
vmiklos@vmobile:~/git/test/server/main$ echo bar >> main.c
vmiklos@vmobile:~/git/test/server/main$ git add git commit -m "bar in main"
vmiklos@vmobile:~/git/test/server/main$ git add main.c
vmiklos@vmobile:~/git/test/server/main$ git commit -m "bar in main"
Created commit 1c26399: bar in main
 1 files changed, 1 insertions(+), 0 deletions(-)
vmiklos@vmobile:~/git/test/server/main$ cd ../libfoo
vmiklos@vmobile:~/git/test/server/libfoo$ echo bar >> libfoo.c
vmiklos@vmobile:~/git/test/server/libfoo$ git add libfoo.c
vmiklos@vmobile:~/git/test/server/libfoo$ git commit -m "bar in libfoo"
Created commit 07ceadb: bar in libfoo
 1 files changed, 1 insertions(+), 0 deletions(-)
vmiklos@vmobile:~/git/test/server/libfoo$ cd ../../client/main
vmiklos@vmobile:~/git/test/client/main$ git submodule update