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Private Equity Purchase Agreement

Private Equity Purchase Agreement Template for India

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Key Requirements PROMPT example:

Private Equity Purchase Agreement

"I need a Private Equity Purchase Agreement under Indian law for a $50 million investment in a healthcare technology company, where the PE firm will acquire 35% stake with board representation rights and a path to majority ownership by 2025."

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Document background
The Private Equity Purchase Agreement is a crucial transaction document used when a private equity investor acquires a stake in an Indian target company. This agreement is essential for documenting the investment terms, protecting investor rights, and ensuring compliance with Indian regulatory requirements including the Companies Act 2013, SEBI regulations, and Foreign Exchange Management Act (for foreign investors). The document addresses key aspects such as share transfer mechanics, valuation adjustments, governance rights, exit provisions, and regulatory compliance. It's particularly important in the Indian context due to specific regulatory requirements around foreign investment, sectoral caps, pricing guidelines, and corporate governance norms. The agreement typically includes detailed warranties and indemnities reflecting Indian market standards and legal requirements, making it a fundamental document for any private equity transaction in India.
Suggested Sections

1. Parties: Identification of all parties to the agreement including the seller(s), purchaser(s), and the target company

2. Background: Recitals explaining the context of the transaction and current ownership structure

3. Definitions: Comprehensive definitions of terms used throughout the agreement

4. Sale and Purchase: Core transaction terms including shares/securities being sold and purchase price

5. Purchase Price and Payment: Detailed terms of consideration, payment mechanism, and any adjustments

6. Conditions Precedent: Conditions that must be satisfied before completion of the transaction

7. Pre-Completion Obligations: Obligations of parties between signing and completion, including conduct of business requirements

8. Completion: Mechanics of closing, including timing, location, and deliverables

9. Warranties and Representations: Comprehensive warranties from seller regarding the business, shares, and authority to sell

10. Limitations on Liability: Limitations on warranty claims and general liability caps

11. Indemnification: Indemnity provisions protecting parties against specific risks and losses

12. Confidentiality: Obligations regarding confidential information and public announcements

13. Governing Law and Jurisdiction: Choice of law and dispute resolution mechanisms

14. General Provisions: Standard boilerplate clauses including notices, amendments, and entire agreement

Optional Sections

1. Management and Operations: Include when the deal involves ongoing management rights or operational requirements

2. Tag-Along and Drag-Along Rights: Include when certain shareholders are given specific exit rights

3. Anti-Dilution Protection: Include when protecting against future dilutive issuances

4. Non-Compete and Non-Solicit: Include when restricting seller's future business activities

5. Earn-out Provisions: Include when part of purchase price is contingent on future performance

6. Foreign Investment Compliance: Include for cross-border transactions requiring specific compliance measures

7. Employee Matters: Include when transaction affects employment arrangements or requires specific HR provisions

8. Intellectual Property Rights: Include when IP forms a material part of the transaction value

Suggested Schedules

1. Disclosure Schedule: Detailed disclosures against warranties and representations

2. Share Capital Structure: Complete breakdown of target company's share capital and securities

3. Material Contracts: List and copies of material contracts affecting the business

4. Intellectual Property: Schedule of all IP rights owned or licensed by the target

5. Properties: Details of all real estate owned or leased by the target

6. Employee Information: Details of key employees, benefits, and employment terms

7. Completion Deliverables: List of all documents and items to be delivered at completion

8. Existing Encumbrances: Details of all existing charges and encumbrances

9. Form of Resignation Letters: Template resignation letters for outgoing directors

10. Form of Board Resolutions: Template board resolutions required for completion

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Affiliate
Agreement
Applicable Law
Board
Business
Business Day
Closing
Closing Date
Companies Act
Company
Completion
Conditions Precedent
Confidential Information
Consideration
Control
Disclosure Schedule
Encumbrance
Equity Shares
FEMA
Financial Statements
Financial Year
Fully Diluted Basis
Governmental Authority
Group Companies
Indebtedness
Indemnified Parties
Intellectual Property Rights
Investment Amount
Investor
Key Employees
Material Adverse Effect
Material Contracts
Ordinary Course of Business
Parties
Person
Promoters
Purchase Price
Purchaser
RBI
Related Party
Relative
Representatives
SEBI
Sale Shares
Seller
Shareholders Agreement
Subsidiary
Tax
Third Party
Transaction Documents
Transfer
Warranties
Working Day
Clauses
Interpretation
Sale and Purchase
Purchase Price
Payment Terms
Conditions Precedent
Pre-Completion Covenants
Completion Obligations
Post-Completion Obligations
Warranties and Representations
Indemnification
Confidentiality
Non-Compete
Non-Solicitation
Board Composition
Reserved Matters
Information Rights
Tag-Along Rights
Drag-Along Rights
Exit Rights
Anti-Dilution
Transfer Restrictions
Management Rights
Corporate Governance
Regulatory Compliance
FEMA Compliance
Tax Matters
Dispute Resolution
Force Majeure
Termination
Notices
Assignment
Amendment
Severability
Governing Law
Jurisdiction
Costs and Expenses
Further Assurance
Entire Agreement
Relevant Industries

Technology

Manufacturing

Healthcare

Financial Services

Real Estate

Consumer Goods

E-commerce

Infrastructure

Renewable Energy

Education

Pharmaceuticals

Telecommunications

Retail

Agriculture

Logistics

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Investment

Compliance

Due Diligence

Risk Management

Tax

Corporate Secretarial

Executive Leadership

Board of Directors

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Investment Director

Private Equity Partner

Corporate Lawyer

Investment Banker

Company Secretary

Chief Legal Officer

Transaction Advisory Partner

Due Diligence Manager

Compliance Officer

Managing Director

Board Director

Investment Committee Member

Industries
Indian Contract Act, 1872: Fundamental law governing contract formation, validity, and enforcement in India. Essential for ensuring the purchase agreement meets basic contractual requirements.
Companies Act, 2013: Primary legislation governing company operations in India, including share transfers, corporate governance, and compliance requirements for private equity transactions.
Securities and Exchange Board of India (SEBI) Act, 1992: Regulates securities market and protects investor interests. Relevant for PE transactions, especially if dealing with listed companies or convertible instruments.
SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011: Important for determining disclosure requirements and compliance needs if the target company is listed.
Foreign Exchange Management Act (FEMA), 1999: Crucial for cross-border PE transactions, governing foreign investment limits, pricing guidelines, and reporting requirements.
Income Tax Act, 1961: Addresses tax implications of the PE transaction, including capital gains, tax withholding obligations, and transfer pricing if applicable.
Competition Act, 2002: Relevant for larger transactions that might require competition commission approval or notification.
Registration Act, 1908: Governs the registration of documents and may be relevant if the agreement needs to be registered.
Stamp Act (Various State Stamp Acts): Determines the stamp duty payable on the agreement, which varies by state in India.
Information Technology Act, 2000: Relevant for electronic execution of agreements and digital signatures if the agreement is being executed electronically.
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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