Standby Equity Distribution Agreement Template for Indonesia

The Standby Equity Distribution Agreement (SEDA) serves as a crucial financing instrument for companies seeking flexible access to equity capital in Indonesia. This document is typically employed when a company requires ongoing access to equity funding without the immediate dilution and market impact of a traditional equity offering. The agreement details the terms under which an investor will purchase newly issued shares, including pricing mechanisms, draw-down procedures, and regulatory compliance requirements under Indonesian law. It's particularly valuable for growing companies that need capital for expansion, working capital, or strategic initiatives. The document must comply with OJK regulations, Indonesian Company Law, and capital market requirements, making it essential to incorporate specific local law provisions while maintaining international financing standards.

1. Parties: Identifies the company (issuer) and the investor (purchaser), including their complete legal names, registration numbers, and addresses

2. Background: Sets out the context of the agreement, including the company's desire to obtain equity financing and the investor's willingness to provide it

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes rules for interpreting the agreement

4. Facility and Commitment: Details the total commitment amount, duration of the facility, and basic mechanics of the equity distribution arrangement

5. Draw Down Mechanics: Specifies the process for requesting share purchases, including notice requirements, timing, and conditions precedent

6. Pricing Mechanism: Establishes the formula for determining the purchase price of shares, typically based on market prices with specified discounts

7. Conditions Precedent: Lists the conditions that must be satisfied before any draw down can occur, including regulatory approvals and corporate authorizations

8. Representations and Warranties: Contains statements of fact and assurances from both parties, particularly regarding their capacity and authority

9. Covenants: Sets out ongoing obligations of the parties, including corporate governance and regulatory compliance requirements

10. Share Issuance Process: Details the mechanical process for issuing and delivering shares, including registration and listing requirements

11. Fees and Expenses: Specifies any commitment fees, transaction fees, and allocation of costs

12. Events of Default: Lists circumstances that constitute default and their consequences

13. Termination: Describes how and when the agreement can be terminated and the consequences of termination

14. Confidentiality: Governs the treatment of confidential information exchanged under the agreement

15. Notices: Specifies how formal communications between parties should be made

16. Governing Law and Dispute Resolution: Establishes Indonesian law as governing law and sets out dispute resolution procedures