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Standby Equity Distribution Agreement Template for England and Wales

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Key Requirements PROMPT example:

Standby Equity Distribution Agreement

"I need a Standby Equity Distribution Agreement for a UK-listed renewable energy company seeking to raise up to £50 million in flexible capital, with quarterly draw-down options and a minimum draw-down size of £500,000, to be effective from March 2025."

Document background
A Standby Equity Distribution Agreement provides a flexible financing solution for companies seeking access to equity capital markets. This instrument, governed by English and Welsh law, enables companies to issue shares to pre-committed investors on an as-needed basis, offering greater control over timing and amount compared to traditional equity raises. The agreement typically includes detailed provisions on pricing mechanisms, draw-down procedures, conditions precedent, and regulatory compliance requirements. It's particularly valuable for companies requiring intermittent capital injections while minimizing market impact.
Suggested Sections

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

2. Background/Recitals: Context of the agreement and key commercial objectives

3. Definitions: Key terms used throughout the agreement including financial metrics

4. Facility Terms: Core terms of the equity distribution arrangement including commitment amount

5. Draw Down Mechanics: Process and conditions for requesting and executing draw downs

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 and specific assurances from both parties

9. Covenants: Ongoing obligations of the parties during the term

10. Events of Default: Circumstances that trigger default and remedies

Optional Sections

1. Market Making Provisions: Terms for maintaining market liquidity when dealing with listed securities

2. Overseas Securities Provisions: Additional terms for cross-border transactions when involving multiple jurisdictions

3. Voting Rights: Special provisions regarding voting rights attached to shares when shares carry voting rights

Suggested Schedules

1. Form of Draw Down Notice: Standard form for requesting draw downs

2. Pricing Schedule: Detailed pricing calculations and examples

3. Conditions Precedent Documents: List of required documentation

4. Form of Compliance Certificate: Template for ongoing compliance confirmation

5. Board Resolutions: Required corporate approvals

Authors

Alex Denne

Head of Growth (Open Source Law) @ tiktok³ÉÈ˰æ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions







































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Relevant Industries
Relevant Teams
Relevant Roles
Industries

Financial Services and Markets Act 2000: Primary legislation governing financial services and markets regulation in the UK, including authorization requirements and investor protection measures

Financial Services Act 2012: Updates and amendments to the financial regulatory framework, establishing the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA)

UK MiFID II Implementation: UK implementation of Markets in Financial Instruments Directive II, governing financial markets and improving protections for investors

UK Market Abuse Regulation: Framework to prevent market abuse, insider dealing, and unlawful disclosure of inside information

UK Prospectus Regulation: Requirements for the prospectus to be published when securities are offered to the public or admitted to trading

Companies Act 2006: Primary legislation governing company operations, including share issuance, capital maintenance, and corporate governance requirements

FCA Listing Rules: Regulations governing companies listed on UK exchanges, including ongoing obligations and disclosure requirements

FCA Disclosure Guidance and Transparency Rules: Requirements for disclosure of information to markets and transparency in corporate reporting

Common Law Contract Principles: Fundamental principles of contract formation, interpretation, and enforcement under English common law

Unfair Contract Terms Act 1977: Legislation regulating unfair terms in contracts, particularly in standard form agreements

Misrepresentation Act 1967: Laws governing false or misleading statements made during contract formation

Money Laundering Regulations 2017: Requirements for prevention and detection of money laundering in financial transactions

Proceeds of Crime Act 2002: Legislative framework for dealing with criminal proceeds and money laundering offenses

UK GDPR: Data protection and privacy regulations governing the processing of personal data

Data Protection Act 2018: UK's implementation of data protection requirements, supplementing UK GDPR

Private International Law (Miscellaneous Provisions) Act 1995: Rules determining applicable law in contracts with international elements

Rome I Regulation (UK retained): Rules determining the applicable law in contractual obligations, as retained in UK law post-Brexit

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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