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Repurchase Option Agreement Template for India

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Key Requirements PROMPT example:

Repurchase Option Agreement

"I need a Repurchase Option Agreement for selling my manufacturing facility to an investor, with the right to buy it back within 3 years if my business expands, with the repurchase price to be calculated based on fair market value plus 15% premium."

Document background
The Repurchase Option Agreement is a vital commercial instrument in Indian business transactions where a party wishes to retain the right to buy back assets after their sale. This document is commonly used in various scenarios, including strategic divestitures, real estate transactions, share sales, and business restructuring. It becomes particularly relevant when companies need flexibility in asset ownership or want to maintain control over strategic assets while temporarily transferring ownership. The agreement must comply with Indian contract law principles, including the Indian Contract Act, 1872, and where applicable, the Transfer of Property Act, 1882. The document typically includes detailed provisions on option exercise mechanisms, pricing formulas, conditions precedent, and completion requirements. It's especially useful in situations involving strategic assets, family businesses, or when market conditions might make a future repurchase desirable.
Suggested Sections

1. Parties: Identification of all parties to the agreement, including the original seller (option holder) and the buyer (option grantor)

2. Background: Context of the agreement, including reference to the original sale and the reason for the repurchase option

3. Definitions: Key terms used throughout the agreement, including 'Option Period', 'Exercise Price', 'Option Assets', etc

4. Grant of Option: Clear statement of the repurchase option being granted, including its nature and scope

5. Exercise Period: Specification of when the option can be exercised, including start date, duration, and any conditions precedent

6. Exercise Price: Details of the repurchase price and how it is calculated, including any adjustments

7. Exercise Procedure: Step-by-step process for exercising the option, including notice requirements and timing

8. Completion of Repurchase: Process and requirements for completing the repurchase transaction once the option is exercised

9. Representations and Warranties: Standard representations and warranties from both parties regarding their capacity and authority

10. Confidentiality: Obligations regarding confidential information shared during the option period

11. Notices: Process and requirements for giving formal notices under the agreement

12. Governing Law and Jurisdiction: Specification of Indian law as governing law and jurisdiction for disputes

Optional Sections

1. Asset Maintenance: Used when the option assets need specific maintenance or protection during the option period

2. Third Party Rights: Include when there are potential third-party interests in the option assets

3. Tag-Along Rights: Include for share repurchase options where other shareholders might need protection

4. Drag-Along Rights: Include for share repurchase options where forcing other shareholders to sell might be necessary

5. Security Arrangements: Include when security is required to protect the option holder's rights

6. Non-Compete Provisions: Include when there are concerns about competition during the option period

7. Force Majeure: Include when external events might affect the exercise of the option

8. Tax Provisions: Include detailed tax provisions when the repurchase has significant tax implications

Suggested Schedules

1. Schedule 1 - Option Assets: Detailed description and/or list of the assets subject to the repurchase option

2. Schedule 2 - Exercise Price Calculation: Detailed methodology for calculating the exercise price, including any adjustments or formulas

3. Schedule 3 - Exercise Notice Form: Template form for exercising the option

4. Schedule 4 - Completion Requirements: Detailed list of actions and documents required for completion

5. Appendix A - Original Sale Agreement: Copy or key terms of the original sale agreement

6. Appendix B - Asset Valuation Methodology: If applicable, the agreed methodology for valuing the assets for repurchase

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

Relevant legal definitions









































Clauses






























Relevant Industries

Real Estate

Manufacturing

Technology

Financial Services

Private Equity

Venture Capital

Agriculture

Retail

Mining

Infrastructure

Healthcare

Education

Relevant Teams

Legal

Finance

Corporate Development

Risk Management

Treasury

Compliance

Business Development

Investment

Asset Management

Strategy

Commercial

Company Secretarial

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Legal Director

Corporate Lawyer

Business Development Manager

Investment Manager

Asset Manager

Property Manager

Risk Manager

Commercial Director

Finance Director

Company Secretary

Mergers & Acquisitions Director

Strategy Director

Treasury 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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