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Private Equity Subscription Agreement Template for India

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Key Requirements PROMPT example:

Private Equity Subscription Agreement

"I need a Private Equity Subscription Agreement for a Series B investment of USD 20 million by a US-based PE fund into our Indian healthcare technology company, with specific provisions for minority shareholder protection and a planned IPO exit by March 2025."

Document background
The Private Equity Subscription Agreement is a crucial document used in private equity transactions in India when investors acquire newly issued shares in a target company. It serves as the cornerstone document that governs the investment relationship, typically used in growth capital, late-stage investments, or buyout scenarios. The agreement must comply with Indian regulatory requirements, including the Companies Act, 2013, SEBI regulations, and where applicable, foreign investment laws. It contains detailed provisions covering investment terms, valuation, governance rights, transfer restrictions, and exit mechanisms. This document is particularly important in the Indian context due to specific regulatory requirements around foreign investment, pricing guidelines, and sector-specific investment restrictions.
Suggested Sections

1. Parties: Identification of the company, investor(s), and other relevant parties to the agreement

2. Background/Recitals: Context of the transaction, including company's business and purpose of investment

3. Definitions and Interpretation: Definitions of key terms and rules of interpretation for the agreement

4. Subscription and Payment Terms: Details of shares being subscribed, price per share, and payment mechanisms

5. Conditions Precedent: Conditions that must be satisfied before the investment obligation becomes binding

6. Closing: Process and requirements for completing the investment transaction

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

8. Investor Rights: Special rights granted to investors including board seats, veto rights, and information rights

9. Transfer Restrictions: Limitations on transfer of shares and special transfer rights

10. Covenants: Ongoing obligations of the company and promoters

11. Events of Default: Circumstances constituting breach and corresponding remedies

12. Indemnification: Protection against losses and liability allocation

13. Confidentiality: Obligations regarding confidential information

14. Notices: Process for formal communications between parties

15. Governing Law and Dispute Resolution: Applicable law and mechanism for resolving disputes

16. General Provisions: Standard boilerplate clauses including amendments, waivers, and severability

Optional Sections

1. Tag-Along Rights: Include when investors require the right to join in sale of shares by promoters

2. Drag-Along Rights: Include when majority investors need the right to force other shareholders to join in a sale

3. Anti-Dilution Protection: Include when investors require protection against future down rounds

4. FCPA/Anti-Corruption Provisions: Include for foreign investors or when required by investor policy

5. Exit Rights: Include when investors require specific exit mechanisms or timelines

6. Founder/Promoter Lock-in: Include when requiring founders to maintain minimum shareholding

7. Multiple Closings: Include when investment is to be made in tranches

8. Foreign Investment Compliance: Include for foreign investors to ensure FEMA compliance

Suggested Schedules

1. Schedule 1 - Capital Structure: Pre and post-investment shareholding pattern

2. Schedule 2 - Subscription Details: Detailed breakdown of shares, price, and consideration

3. Schedule 3 - Company Warranties: Comprehensive list of company representations and warranties

4. Schedule 4 - Conditions Precedent: Detailed list of conditions to be satisfied before closing

5. Schedule 5 - Closing Checklist: List of documents and actions required at closing

6. Schedule 6 - Reserved Matters: List of actions requiring investor consent

7. Schedule 7 - Corporate Governance Rights: Detailed provisions regarding board composition and governance

8. Appendix A - Deed of Adherence: Format for new shareholders to become party to the agreement

9. Appendix B - Financial Statements: Latest financial statements of the company

10. Appendix C - Disclosure Schedule: Exceptions to warranties and representations

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

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Relevant Industries

Technology

Healthcare

Manufacturing

Financial Services

E-commerce

Consumer Goods

Real Estate

Infrastructure

Renewable Energy

Education

Telecommunications

Retail

Biotechnology

Agriculture

Media and Entertainment

Relevant Teams

Legal

Finance

Compliance

Corporate Development

Investment

Board of Directors

Company Secretarial

Risk Management

Corporate Strategy

Mergers & Acquisitions

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Investment Director

Private Equity Partner

Corporate Lawyer

Investment Manager

Deal Principal

Managing Director

Company Secretary

Compliance Officer

Finance Director

Legal Counsel

Transaction Advisory Manager

Investment Associate

Board Director

Fund Manager

Chief Investment Officer

Industries








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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