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Private Equity Investment Agreement Template for England and Wales

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Key Requirements PROMPT example:

Private Equity Investment Agreement

"I need a Private Equity Investment Agreement for a Series B investment of £15 million into a UK-based healthcare technology company, with specific focus on anti-dilution protection and board appointment rights for the incoming investor who will take a 25% stake."

Document background
The Private Equity Investment Agreement is a crucial document used when institutional investors or private equity funds make significant equity investments in private companies. It serves as the primary contractual framework governing the relationship between investors and the target company under English and Welsh law. The agreement typically covers investment terms, shareholder rights, corporate governance, warranties, and exit provisions. It's particularly important for protecting investor interests while ensuring operational flexibility for the target company. The document must comply with UK company law, financial services regulations, and relevant FCA requirements.
Suggested Sections

1. Parties: Identification of all parties to the agreement, including registered addresses and company numbers

2. Background/Recitals: Context of the investment, including company status and investment rationale

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. Investment Terms: Details of investment amount, share class, and pricing

5. Conditions Precedent: Conditions that must be satisfied before completion

6. Completion Mechanics: Process and requirements for completing the investment

7. Warranties and Representations: Statements of fact and assurances from the company and existing shareholders

8. Investor Rights: Specific rights granted to the investor including board representation and information rights

9. Exit Provisions: Terms relating to future sale or IPO of the company

10. Governing Law and Jurisdiction: Specification of applicable law and courts

Optional Sections

1. Anti-dilution Protection: Protection against future down rounds - typically included when investing in early-stage companies

2. Tag-Along Rights: Right to join in sale of shares by other shareholders - included when minority investor protection is needed

3. Drag-Along Rights: Right to force minority shareholders to join in sale - included when majority control is desired

4. Employee Matters: Provisions relating to key employees and ESOP - included when management retention is critical

5. Restrictive Covenants: Non-compete and non-solicitation provisions - included when protecting business interests is crucial

Suggested Schedules

1. Capitalization Table: Current and post-investment share capital structure

2. Warranties: Detailed warranties given by the company and founders

3. Disclosure Letter: Exceptions and qualifications to warranties

4. New Articles of Association: Updated company constitution reflecting investment terms

5. Business Plan: Company's strategic plan and financial projections

6. Form of Board Resolutions: Template resolutions approving the investment

7. Key Performance Indicators: Metrics for monitoring company performance

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions

























































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Relevant Industries
Relevant Teams
Relevant Roles
Industries

Companies Act 2006: Primary legislation governing company operations, including share capital, share classes, directors' duties, company administration, and shareholder rights

Financial Services and Markets Act 2000: Key legislation establishing regulatory framework for financial services, investment restrictions, and financial promotion rules

Financial Services Act 2012: Updates to financial regulation and financial conduct requirements

FCA Rules: Regulatory framework covering investment regulations, conduct of business rules, and client classification

PRA Requirements: Prudential regulations covering capital adequacy requirements and risk management

Law of Property Act 1925: Fundamental property law legislation relevant for asset transfers and security arrangements

Unfair Contract Terms Act 1977: Legislation governing the fairness and enforceability of contract terms

Misrepresentation Act 1967: Law dealing with false statements and representations made during contract formation

Income Tax Act 2007: Tax legislation governing income tax implications of investments

Corporation Tax Act 2010: Tax legislation covering corporate tax aspects of private equity investments

Taxation of Chargeable Gains Act 1992: Legislation governing capital gains tax implications of investment disposals

Enterprise Act 2002: Competition law framework affecting business combinations and mergers

Competition Act 1998: Legislation prohibiting anti-competitive behavior and agreements

Money Laundering Regulations 2017: Regulations requiring due diligence and preventing money laundering in financial transactions

Proceeds of Crime Act 2002: Criminal law framework preventing use of criminal property and proceeds

UK GDPR: Data protection regulation governing processing of personal data

Data Protection Act 2018: UK's implementation of data protection requirements, complementing UK GDPR

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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