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The Standby Equity Distribution Agreement (SEDA) is a strategic financing instrument utilized in the Irish market when companies require flexible access to capital without the immediate dilution associated with traditional equity offerings. This document is particularly relevant for growing companies or those requiring periodic capital injections, providing them with the ability to draw down funds by issuing new shares when needed. The agreement operates within the framework of Irish corporate law, specifically the Companies Act 2014, and must comply with relevant EU financial regulations and Central Bank of Ireland requirements. It typically includes detailed provisions on pricing mechanisms, regulatory compliance, issuance procedures, and investor protections. The SEDA structure allows companies to maintain greater control over the timing and size of their capital raises compared to traditional equity financing methods.

1. Parties: Identification of the parties: typically the company issuing shares and the investment entity providing the standby commitment

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

3. Definitions: Definitions of key terms used throughout the agreement, including financial terms, calculation methods, and regulatory references

4. Commitment Amount: Details of the total commitment amount and any restrictions or limitations on the facility

5. Advance Mechanics: Procedures for requesting advances, including notice requirements and documentation

6. Pricing Mechanism: Formula and methodology for determining the purchase price of shares, including discount rates and reference periods

7. Conditions Precedent: Conditions that must be satisfied before the facility becomes available and before each advance

8. Representations and Warranties: Standard and specific representations and warranties from both parties

9. Covenants: Ongoing obligations of the parties, including regulatory compliance and reporting requirements

10. Draw Down Procedures: Detailed procedures for initiating and completing each draw down under the facility

11. Settlement and Delivery: Procedures for settling transactions and delivering shares

12. Regulatory Compliance: Obligations regarding securities laws, stock exchange rules, and other regulatory requirements

13. Events of Default: Circumstances constituting default and consequences thereof

14. Termination: Terms and conditions for terminating the agreement

15. General Provisions: Standard legal provisions including notices, amendments, governing law, and jurisdiction