Standby Equity Purchase Agreement Template for Switzerland

A Standby Equity Purchase Agreement (SEPA) is a sophisticated financing arrangement that provides your company with committed access to equity capital when needed. Under Swiss law, this agreement creates a legally binding obligation for an investor to purchase your newly issued shares over a predetermined timeframe, giving you financial flexibility without immediate ownership dilution.

When do you need this document?

You need a SEPA when your company requires flexible access to equity funding without the immediate pressure of share issuance. This is particularly valuable for growth-stage companies that may need capital for expansion, acquisition opportunities, or working capital requirements. Listed companies on SIX Swiss Exchange often use SEPAs to maintain market confidence while securing funding commitments. Technology startups and biotech companies frequently rely on SEPAs during product development phases when capital needs are unpredictable. The agreement is also essential for companies undergoing restructuring or those in cyclical industries where cash flow timing varies significantly.

Key legal considerations

Your SEPA must include precise drawdown mechanics that specify how and when you can access the committed funds. The pricing mechanism is crucial and typically includes market-based formulas to ensure fair valuation at the time of share issuance. You must establish clear conditions precedent that protect both parties, including minimum share price thresholds and trading volume requirements. Investor protections such as anti-dilution provisions and registration rights require careful negotiation to balance your company's flexibility with investor security. The agreement should address potential conflicts with existing shareholders' rights and pre-emption provisions in your articles of association. Consider including material adverse change clauses and specific performance remedies to ensure enforceability.

Legal requirements in Switzerland

Your SEPA must comply with the Swiss Code of Obligations, which governs contract formation and corporate law principles. If your company is publicly traded, you must adhere to Financial Services Act (FinSA) disclosure requirements and SIX Swiss Exchange listing rules. FINMA regulations apply if the agreement involves regulated financial services or significant market transactions. You must ensure compliance with prospectus requirements under the Financial Market Infrastructure Act if the equity issuance exceeds statutory thresholds. Swiss corporate law requires board resolutions and potentially shareholder approval depending on the size and structure of the commitment. Consider cantonal notification requirements and ensure your company's articles of association provide sufficient authorized capital to fulfill the SEPA obligations. Cross-border considerations may trigger additional regulatory requirements if the investor is based outside Switzerland.