Standby Equity Distribution Agreement Template for Singapore

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Key Requirements PROMPT example:

Standby Equity Distribution Agreement

"Need a Standby Equity Distribution Agreement for our Singapore-listed technology company to secure flexible funding of up to SGD 50 million from Alpha Investment Partners, with quarterly draw-down options starting from March 2025."

What is a Standby Equity Distribution Agreement?

The Standby Equity Distribution Agreement (SEDA) is a sophisticated financing tool used when companies need flexible access to equity capital without immediate dilution. Popular in Singapore's dynamic market, it provides a commitment from investors to purchase newly issued shares over time, subject to various conditions and pricing mechanisms. The agreement typically includes detailed provisions on draw-down procedures, pricing formulae, and regulatory compliance requirements under Singapore law, particularly the Securities and Futures Act and SGX listing rules.

What sections should be included in a Standby Equity Distribution Agreement?

1. Parties: Identification of the company and the investor(s)

2. Background: Context of the agreement and basic premises

3. Definitions: Key terms used throughout the agreement

4. Facility Amount and Term: Total commitment amount and duration of the facility

5. Draw Down Mechanics: Process and conditions for requesting equity investments

6. Pricing Mechanism: Formula for determining share price for each draw down

7. Conditions Precedent: Requirements to be met before facility becomes effective

8. Representations and Warranties: Standard company declarations and assurances

9. Covenants: Ongoing obligations of the company

What sections are optional to include in a Standby Equity Distribution Agreement?

1. Market Making Provisions: Terms for market making services if required when investor also provides market making services

2. Rights of First Refusal: Terms for future equity offerings when parties agree to preferential rights for future raises

3. Anti-dilution Provisions: Protection against dilution from other issuances when specifically negotiated by investor

What schedules should be included in a Standby Equity Distribution Agreement?

1. Draw Down Notice Form: Standard form for requesting investments

2. Pricing Certificate: Template for calculating share price for each draw down

3. Compliance Certificate: Form confirming compliance with conditions

4. Share Capital Structure: Current capitalization table of the company

5. Required Approvals: List of regulatory and corporate approvals needed

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Industries

Securities and Futures Act (SFA) - Chapter 289: Primary legislation governing securities, futures, and financial markets in Singapore. Covers securities offerings, market conduct, licensing requirements, and investor protection.

Companies Act - Chapter 50: Core legislation governing corporate entities in Singapore, including corporate governance, directors' duties, shareholders' rights, and corporate authority requirements.

Financial Advisers Act - Chapter 110: Regulates financial advisory services and ensures proper conduct of financial advisers in Singapore.

MAS Guidelines and Regulations: Regulatory framework issued by the Monetary Authority of Singapore governing financial institutions and market participants.

SGX Listing Rules: Comprehensive set of rules governing listed companies on the Singapore Exchange, including continuing obligations and disclosure requirements.

Code on Take-overs and Mergers: Regulations governing corporate acquisitions, mergers, and takeovers in Singapore.

Securities Registration Requirements: Specific requirements for registering and offering securities in Singapore, including documentation and filing procedures.

Prospectus Requirements: Rules governing the preparation, content, and filing of prospectuses for securities offerings, including applicable exemptions.

Insider Trading Regulations: Provisions preventing trading based on material non-public information and maintaining market integrity.

Market Manipulation Provisions: Rules preventing market manipulation and ensuring fair trading practices in Singapore's financial markets.

Foreign Investment Regulations: Rules governing foreign ownership, investment restrictions, and cross-border transactions in Singapore.

Exchange Control Regulations: Requirements relating to currency exchange and international fund transfers in relation to securities transactions.

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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