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The Standby Equity Distribution Agreement (SEDA) is a strategic financing tool used when a company requires flexible access to capital markets while maintaining control over the timing and size of capital raises. This agreement type is particularly relevant in the Netherlands, where it must comply with both Dutch national law (including the Financial Supervision Act and Dutch Civil Code) and EU regulations. The document establishes a commitment from an investor to purchase newly issued shares over a defined period, typically ranging from 12 to 36 months. It includes detailed provisions for draw-down mechanics, pricing formulas, regulatory compliance requirements, and conditions for share issuance. The agreement is commonly used by Dutch public companies or companies planning an IPO, especially those in growth phases or sectors requiring significant capital investment. The structure provides more flexibility than traditional equity financing while offering potential benefits in terms of market pricing and control over dilution.

1. Parties: Identification of the company and the investor

2. Background: Context of the agreement and brief description of the arrangement

3. Definitions and Interpretation: Definitions of technical terms and interpretation rules

4. Agreement Structure: Overview of the equity distribution arrangement and commitment

5. Subscription Mechanics: Detailed process for draw downs and share issuance

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

7. Conditions Precedent: Conditions that must be satisfied before first draw down

8. Draw Down Conditions: Specific conditions for each draw down request

9. Representations and Warranties: Standard and specific representations by both parties

10. Covenants: Ongoing obligations of both parties

11. Fees and Expenses: Details of all fees, costs and expense allocation

12. Indemnification: Indemnification obligations of both parties

13. Events of Default: Circumstances constituting default and consequences

14. Termination: Termination events and procedures

15. Confidentiality: Confidentiality obligations and permitted disclosures

16. Notices: Communication procedures and contact details

17. Governing Law and Jurisdiction: Choice of law and dispute resolution provisions

18. Miscellaneous: Standard boilerplate provisions