Promissory Note Purchase Agreement for India

Promissory Note Purchase Agreement Template for India

A comprehensive agreement governed by Indian law that facilitates the sale and purchase of promissory notes in the secondary market. The document outlines the terms and conditions for transferring promissory notes from a seller to a purchaser, including purchase price, representations and warranties, closing conditions, and transfer mechanics. It ensures compliance with the Indian Negotiable Instruments Act, 1881, and other relevant Indian legislation while providing a legally robust framework for the transaction.

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What is a Promissory Note Purchase Agreement?

The Promissory Note Purchase Agreement is essential for facilitating secondary market transactions involving promissory notes in India. It is commonly used when holders of promissory notes wish to liquidate their position or when investors seek to acquire existing notes, often at a discount. The agreement must comply with Indian legislation, particularly the Indian Contract Act, 1872, and the Negotiable Instruments Act, 1881. It typically includes detailed provisions for the transfer process, price determination, representations about the note's validity, and closing mechanisms. This document is crucial for businesses seeking to manage their debt portfolios, investors looking to acquire debt instruments, and financial institutions engaging in debt trading activities. The agreement helps ensure legal certainty and clear documentation of the transaction terms while addressing regulatory requirements specific to the Indian jurisdiction.

What sections should be included in a Promissory Note Purchase Agreement?

1. Parties: Identifies and provides details of the seller and purchaser of the promissory note

2. Background: Explains the context of the agreement, including the existence of the promissory note and the parties' intention to sell/purchase it

3. Definitions: Defines key terms used throughout the agreement

4. Sale and Purchase: Core provision detailing the sale and purchase of the promissory note

5. Purchase Price: Specifies the purchase price and any adjustments or calculations

6. Closing: Details the timing and mechanics of the closing, including conditions precedent

7. Seller's Representations and Warranties: Warranties regarding the seller's ownership, authority, and the promissory note's validity

8. Purchaser's Representations and Warranties: Warranties regarding the purchaser's authority and capacity to enter into the transaction

9. Transfer and Delivery: Mechanics of transferring the promissory note and required endorsements

10. Notices: Procedures for giving notices under the agreement

11. Governing Law and Jurisdiction: Specifies Indian law as governing law and sets jurisdiction for disputes

12. Miscellaneous: Standard boilerplate provisions including amendments, waivers, and severability

What sections are optional to include in a Promissory Note Purchase Agreement?

1. Multiple Notes: Required when the agreement covers the purchase of multiple promissory notes

2. Foreign Currency Provisions: Required when the promissory note or purchase price involves foreign currency

3. Security Arrangements: Required when additional security is provided for the promissory note

4. Tax Provisions: Detailed tax provisions required for complex transactions or cross-border elements

5. Regulatory Compliance: Special provisions required for regulated entities or when specific regulatory approvals are needed

6. Further Assurance: Additional provisions for future actions or documents required to perfect the transfer

7. Confidentiality: Required when transaction details need to be kept confidential

8. Force Majeure: Required when parties want to address extraordinary events affecting performance

What schedules should be included in a Promissory Note Purchase Agreement?

1. Schedule 1 - Promissory Note Details: Copy or details of the promissory note(s) being purchased, including date, amount, and payment terms

2. Schedule 2 - Closing Deliverables: List of documents and items to be delivered at closing

3. Schedule 3 - Form of Transfer/Endorsement: Prescribed form for endorsing and transferring the promissory note

4. Schedule 4 - Purchase Price Calculations: If applicable, detailed methodology for calculating purchase price adjustments

5. Appendix A - Required Regulatory Approvals: List of required regulatory approvals and status

6. Appendix B - Corporate Authorizations: Forms of corporate authorizations required from each party

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

Jurisdiction

India

Publisher

Genie AI

Document Type

Promissory Note

Sector

Banking

Cost

Free to use
Relevant legal definitions
Relevant Industries

Financial Services

Banking

Investment Management

Private Equity

Corporate Finance

Real Estate

Manufacturing

Trading

Commercial Lending

Asset Management

Relevant Teams

Legal

Finance

Treasury

Investment

Risk Management

Compliance

Corporate Development

Credit

Portfolio Management

Transaction Management

Relevant Roles

Chief Financial Officer

Finance Director

Treasury Manager

Investment Manager

Legal Counsel

Corporate Lawyer

Financial Controller

Investment Banker

Credit Manager

Risk Manager

Compliance Officer

Portfolio Manager

Managing Director

Transaction Manager

Business Development Manager

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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