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Stock Purchase Agreement Term Sheet Template for India

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Key Requirements PROMPT example:

Stock Purchase Agreement Term Sheet

"I need a Stock Purchase Agreement Term Sheet for acquiring 75% shares in an Indian tech startup, involving a US-based venture capital firm as buyer, with expected closing by March 2025 and including standard minority protection rights."

Document background
The Stock Purchase Agreement Term Sheet is a crucial preliminary document used in Indian corporate transactions to memorialize the key terms of a proposed share purchase. It serves as a roadmap for the transaction, typically prepared after initial negotiations but before detailed due diligence and definitive documentation. This document captures essential commercial terms, conditions, and timeline while adhering to Indian regulatory framework including Companies Act, 2013, SEBI regulations (for listed companies), and FEMA guidelines (for foreign investments). While most provisions are non-binding, it creates moral commitment and guides the preparation of definitive agreements. The term sheet is particularly important in complex transactions involving multiple stakeholders, significant value, or cross-border elements, helping align parties' expectations and streamline the negotiation process.
Suggested Sections

1. Parties: Identification of buyer(s) and seller(s), including complete legal names and addresses

2. Background: Brief description of the transaction context and company whose shares are being purchased

3. Definitions: Key terms used throughout the term sheet

4. Transaction Structure: Overview of the proposed stock purchase, including number and class of shares

5. Purchase Price: Proposed consideration and valuation details

6. Payment Terms: Timing and method of payment, including any deferred consideration

7. Conditions Precedent: Key conditions that must be satisfied before closing

8. Timeline: Expected dates for due diligence, definitive agreements, and closing

9. Exclusivity: Terms of exclusive negotiation period

10. Confidentiality: Basic confidentiality obligations

11. Binding Effect: Specification of which provisions are binding and non-binding

12. Governing Law: Applicable law and jurisdiction

Optional Sections

1. Foreign Investment Provisions: Required when buyer includes foreign investors, addressing FDI regulations and FEMA compliance

2. Regulatory Approvals: Include when transaction requires specific regulatory clearances

3. Management and Control: Include when transaction involves change in management or board composition

4. Employee Matters: Required when transaction affects key employees or involves management retention

5. Tax Structure: Include when transaction has specific tax considerations or structuring

6. Break-up Fee: Include when parties want to specify termination penalties

7. Representations and Warranties: High-level overview if parties want to specify key reps and warranties in term sheet

8. Post-Closing Covenants: Include when there are important post-closing obligations to highlight

Suggested Schedules

1. Cap Table: Current and post-transaction shareholding pattern

2. Valuation Methodology: Summary of how purchase price was determined

3. Payment Schedule: If payment is structured or in installments

4. Key Terms Glossary: Detailed explanations of complex terms or formulae

5. Timeline Chart: Detailed timeline of transaction milestones and responsibilities

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 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

Manufacturing

Financial Services

Healthcare

Real Estate

Retail

Energy

Infrastructure

Telecommunications

Professional Services

Media and Entertainment

E-commerce

Pharmaceuticals

Automotive

Relevant Teams

Legal

Finance

Corporate Development

Compliance

Strategy

Tax

Corporate Secretarial

Risk Management

Treasury

Board of Directors

Executive Leadership

Investment Banking

Due Diligence

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Managing Director

Company Secretary

General Counsel

Corporate Development Director

Investment Banking Director

Private Equity Manager

Mergers & Acquisitions Director

Legal Counsel

Finance Director

Board Director

Compliance Officer

Strategy Director

Transaction Advisory Partner

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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