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Designated Investment Agreement Template for India

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Key Requirements PROMPT example:

Designated Investment Agreement

"Need a Designated Investment Agreement for a US-based venture capital firm investing INR 50 crores in an Indian healthcare tech startup, with specific provisions for staged investments and regulatory compliance with both SEBI and healthcare sector requirements."

Document background
The Designated Investment Agreement serves as a crucial legal framework for structured investments in India, particularly in regulated sectors or when involving foreign investors. This document is essential when making significant investments that require specific regulatory approvals or compliance with government guidelines. It typically includes detailed provisions for investment terms, regulatory compliance requirements, governance rights, and exit mechanisms, all within the context of Indian legal and regulatory framework. The agreement is particularly important for investments that need to comply with Foreign Exchange Management Act (FEMA) regulations, FDI policies, and sector-specific investment caps or conditions. The document becomes necessary when investments require formal designation or approval from regulatory authorities, making it distinct from standard investment agreements.
Suggested Sections

1. Parties: Details of the investor(s) and investee company, including registration information and addresses

2. Background: Context of the investment, brief company history, and purpose of the agreement

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

4. Investment Terms: Details of investment amount, valuation, and securities being issued

5. Conditions Precedent: Conditions that must be satisfied before investment completion

6. Completion Obligations: Steps to be taken at closing, including documentation and payments

7. Representations and Warranties: Statements of fact and assurances from both parties

8. Investor Rights: Rights granted to investors including information, inspection, and board representation

9. Transfer Restrictions: Limitations on transfer of securities and right of first refusal provisions

10. Reserved Matters: Decisions requiring investor consent

11. Exit Rights: Provisions for IPO, strategic sale, or other exit mechanisms

12. Term and Termination: Duration of agreement and circumstances for termination

13. Confidentiality: Protection of confidential information and trade secrets

14. Dispute Resolution: Mechanism for resolving disputes including jurisdiction and arbitration

15. General Provisions: Standard boilerplate clauses including notices, amendments, and governing law

Optional Sections

1. Anti-Dilution Protection: Protection against future down rounds, used when there's significant investment risk

2. Tag-Along Rights: Right to join in sale of shares by promoters, important for minority investor protection

3. Drag-Along Rights: Right to force minority shareholders to join in sale, used in strategic exits

4. Multiple Closing Provisions: For investments happening in tranches or multiple rounds

5. Regulatory Compliance: Specific section for heavily regulated sectors like financial services or healthcare

6. Employee Stock Options: If the company has or plans to have an ESOP scheme

7. Environmental and Social Compliance: For investments in sectors with environmental impact or social considerations

8. Foreign Investment Compliance: Specific provisions for compliance with FDI regulations when involving foreign investors

Suggested Schedules

1. Schedule 1 - Capitalization Table: Pre and post-investment shareholding pattern

2. Schedule 2 - Conditions Precedent: Detailed list of conditions to be satisfied before completion

3. Schedule 3 - Warranties: Detailed warranties given by the company and promoters

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

5. Schedule 5 - Completion Steps: Detailed closing checklist and requirements

6. Schedule 6 - Company Information: Key corporate and business information about the company

7. Schedule 7 - Regulatory Approvals: List of required regulatory approvals and status

8. Schedule 8 - Material Contracts: List of important contracts and arrangements

9. Appendix A - Investment Instruments: Details of securities being issued including rights and preferences

10. Appendix B - Board Composition: Structure and composition of the board post-investment

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

Information Technology

Manufacturing

Financial Services

Healthcare

Infrastructure

Renewable Energy

E-commerce

Telecommunications

Real Estate

Pharmaceuticals

Biotechnology

Education

Agriculture Technology

Relevant Teams

Legal

Finance

Compliance

Corporate Development

Investment

Regulatory Affairs

Corporate Secretarial

Risk Management

Strategy

Business Development

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Investment Director

Compliance Officer

Company Secretary

Legal Director

Investment Manager

Corporate Development Manager

Regulatory Affairs Director

Finance Director

Managing Director

Board Director

Private Equity Partner

Investment Banking Director

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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