Private Equity Investment Agreement Template for Philippines

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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 PHP 250 million into a Philippine technology startup, with specific provisions for minority shareholder protection and technology transfer requirements, planned for closing in March 2025."

Document background
The Private Equity Investment Agreement is a crucial document used when a private equity investor seeks to make a significant equity investment in a Philippine target company. It serves as the primary transaction document that governs the relationship between the investor and the company, establishing clear terms for the investment, governance rights, and exit mechanisms. The agreement must comply with Philippine legal requirements, including the Revised Corporation Code, Securities Regulation Code, and foreign investment regulations. It typically includes detailed provisions on valuation, share subscription, investor protections, board representation, reserved matters, information rights, and exit strategies. This document is particularly important in the Philippine context where foreign ownership restrictions and specific corporate governance requirements must be carefully addressed.
Suggested Sections

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

2. Background: Context of the investment, including brief company history and investment rationale

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

4. Investment Terms: Details of the investment amount, type of shares/securities, and valuation

5. Subscription and Payment: Mechanics of how the investment will be made and payment terms

6. Conditions Precedent: Conditions that must be satisfied before the investment closes

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

8. Covenants: Ongoing obligations of the parties, including both positive and negative covenants

9. Board Composition and Management: Structure and rights regarding board membership and management participation

10. Reserved Matters: Decisions requiring investor consent or special voting rights

11. Information and Inspection Rights: Investor's rights to company information and inspection of records

12. Transfer Restrictions: Limitations on the transfer of shares and related rights

13. Exit Rights: Provisions regarding future sale, IPO, or other exit mechanisms

14. Events of Default: Circumstances constituting default and consequences

15. Termination: Circumstances under which the agreement can be terminated

16. Governing Law and Dispute Resolution: Choice of law and mechanism for resolving disputes

17. Miscellaneous: Standard boilerplate provisions including notices, amendments, and severability

Optional Sections

1. Tag-Along Rights: Include when existing shareholders are present to protect minority investors' right to join in sale of shares

2. Drag-Along Rights: Include when majority shareholders need the ability to force minority shareholders to join in a sale

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

4. Founders' Commitments: Include when founders are key to the business and need to make specific commitments

5. Environmental and Social Compliance: Include for investments in industries with significant environmental or social impact

6. Technology Transfer: Include when the investment involves significant IP or technology transfer

7. Foreign Ownership Compliance: Include when foreign investors are involved and need to comply with Philippine foreign ownership restrictions

8. Competition Compliance: Include when the investment requires competition law compliance or approvals

Suggested Schedules

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

2. Schedule 2: Conditions Precedent: Detailed list of all conditions to be satisfied before closing

3. Schedule 3: Warranties: Detailed warranties given by the company and key shareholders

4. Schedule 4: Reserved Matters: Comprehensive list of matters requiring investor consent

5. Schedule 5: Company Information: Key company information including financial statements and material contracts

6. Schedule 6: Intellectual Property: List of company's IP assets and related rights

7. Schedule 7: Form of Management Accounts: Template for ongoing financial reporting

8. Schedule 8: Disclosure Letter: Exceptions and qualifications to the warranties

9. Appendix A: Deed of Adherence: Form for new shareholders to become bound by the agreement

10. Appendix B: Corporate Authorities: Required corporate approvals and resolutions

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

Relevant legal definitions
Clauses
Relevant Industries

Technology

Manufacturing

Real Estate

Healthcare

Financial Services

Consumer Goods

Retail

Agriculture

Infrastructure

Education

Energy

Transportation

Food and Beverage

Telecommunications

Business Services

Relevant Teams

Legal

Finance

Corporate Development

Investment

Compliance

Risk Management

Board of Directors

Executive Management

Corporate Secretarial

Strategy

Mergers and Acquisitions

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Investment Director

Private Equity Partner

Corporate Lawyer

Investment Manager

Managing Director

Board Director

Company Secretary

General Counsel

Finance Director

Business Development Director

Compliance Officer

Risk Manager

Transaction Manager

Investment Analyst

Corporate Development Manager

Industries
Revised Corporation Code of the Philippines (Republic Act No. 11232): Primary legislation governing the establishment, operation, and regulation of corporations in the Philippines. Crucial for determining corporate structure, shareholder rights, and corporate governance requirements.
Securities Regulation Code (Republic Act No. 8799): Regulates the securities market, including private placement rules, disclosure requirements, and investor protection provisions applicable to private equity investments.
Foreign Investments Act of 1991 (Republic Act No. 7042): Establishes guidelines and restrictions on foreign ownership in Philippine businesses, including the Foreign Investment Negative List (FINL) which specifies investment areas with foreign ownership limitations.
National Internal Revenue Code: Covers tax implications of private equity investments, including capital gains tax, documentary stamp tax, and other applicable taxes on investment transactions.
Anti-Money Laundering Act (Republic Act No. 9160): Imposes due diligence requirements and reporting obligations for significant financial transactions, including private equity investments.
Philippine Competition Act (Republic Act No. 10667): Regulates market competition and may require notification or approval for substantial investments that could affect market concentration.
Civil Code of the Philippines: Provides the basic framework for contract law, including requirements for valid contracts, obligations, and remedies for breach.
Intellectual Property Code: Relevant for investments involving technology companies or businesses with significant intellectual property assets.
Labor Code of the Philippines: Important for due diligence and post-investment operations, particularly regarding employee rights and benefits.
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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