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The Sale Of Membership Interest Agreement is a crucial document used in Indian business transactions when transferring ownership stakes in companies or business entities. This agreement becomes necessary when members or shareholders wish to sell their ownership interests, whether partial or complete, to other parties. The document must comply with Indian legislative requirements, including the Companies Act 2013, Indian Contract Act 1872, and relevant tax laws. It typically includes detailed provisions about the transfer price, payment mechanisms, representations and warranties, and closing conditions. The agreement is particularly important in protecting both parties' interests while ensuring smooth ownership transition and regulatory compliance. It should be carefully drafted to address specific transaction requirements while maintaining enforceability under Indian law.

1. Parties: Identification of the Seller(s), Buyer(s), and the Company whose membership interests are being transferred

2. Background: Context of the transaction, including current ownership structure and reason for transfer

3. Definitions: Definitions of key terms used throughout the agreement

4. Sale and Purchase: Core transaction terms including the membership interests being sold and purchase price

5. Purchase Price and Payment: Detailed payment terms, including payment method, timing, and any adjustments

6. Conditions Precedent: Conditions that must be satisfied before closing

7. Closing: Timing and mechanics of closing, including deliverables and actions required

8. Seller's Representations and Warranties: Warranties regarding ownership, authority, company status, and other material matters

9. Buyer's Representations and Warranties: Warranties regarding authority, financial capacity, and regulatory compliance

10. Company Representations and Warranties: Warranties regarding the company's business, assets, liabilities, and operations

11. Covenants: Pre-closing and post-closing obligations of the parties

12. Indemnification: Rights and obligations regarding compensation for losses or breaches

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

14. Notices: Process and requirements for formal communications between parties

15. General Provisions: Standard boilerplate provisions including amendments, waivers, and severability