Standby Equity Distribution Agreement Template for Philippines

The Standby Equity Distribution Agreement (SEDA) is a strategic financing instrument used in the Philippine market when companies seek flexible access to capital without the immediate dilution of a traditional equity offering. This document is particularly relevant for publicly listed companies looking to raise funds over time based on market conditions and capital needs. The agreement must be structured to comply with Philippine securities laws, including the Securities Regulation Code and SEC regulations, while addressing specific requirements for listed companies under Philippine Stock Exchange rules. The SEDA typically includes detailed mechanisms for share pricing, draw-down procedures, regulatory compliance requirements, and investor protections. It serves as an alternative to traditional financing methods, offering companies the ability to access capital as needed while providing investors with a structured way to invest in growing businesses.

1. Parties: Identification of the company issuing shares and the investor providing the equity facility

2. Background: Context of the agreement, including company's funding needs and investor's commitment to provide standby equity facility

3. Definitions: Key terms used throughout the agreement, including financial metrics, pricing mechanisms, and regulatory references

4. Facility Amount and Term: Total commitment amount, duration of the facility, and any extension provisions

5. Draw Down Mechanics: Process for requesting advances, including notice requirements, timing, and conditions precedent

6. Pricing Mechanism: Formula for determining share price for each draw down, including reference periods and discount rates

7. Conditions Precedent: Requirements to be met before first draw down and subsequent draw downs

8. Company Representations and Warranties: Standard and specific representations regarding corporate status, authority, and securities compliance

9. Investor Representations and Warranties: Confirmations regarding investment authority, financial capacity, and regulatory compliance

10. Covenants: Ongoing obligations of both parties, including reporting requirements and maintenance of authorizations

11. Draw Down Restrictions: Limitations on timing, frequency, and amount of draw downs

12. Termination Rights: Circumstances allowing either party to terminate the agreement and consequences of termination

13. Indemnification: Mutual indemnification provisions for breaches and securities law violations

14. Confidentiality: Protection of confidential information exchanged during the arrangement

15. Governing Law and Jurisdiction: Choice of Philippine law and jurisdiction for dispute resolution

16. General Provisions: Standard boilerplate clauses including notices, amendments, and assignment restrictions