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Standby Equity Purchase Agreement for Austria

Standby Equity Purchase Agreement Template for Austria

A Standby Equity Purchase Agreement (SEPA) under Austrian law is a strategic financing arrangement that provides companies with the flexibility to raise capital by selling shares to an investor over time. The agreement, governed by Austrian corporate and securities laws, establishes a commitment from the investor to purchase the company's shares at predetermined terms when requested by the company. The document includes detailed provisions on pricing mechanisms, drawdown procedures, regulatory compliance requirements specific to Austrian jurisdiction, and various conditions precedent that must be satisfied before share purchases can occur.

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What is a Standby Equity Purchase Agreement?

The Standby Equity Purchase Agreement is a sophisticated financing instrument used by companies seeking flexible access to equity capital under Austrian law. This document is typically employed when a company wants to secure a reliable source of future funding without immediate dilution of existing shareholders. The agreement provides the company with the option, but not the obligation, to sell shares to the investor over a specified period, subject to agreed-upon pricing mechanisms and volume limitations. It must comply with Austrian corporate law, particularly the Stock Corporation Act (Aktiengesetz) and Capital Market Act (Kapitalmarktgesetz), as well as relevant EU regulations. The document includes comprehensive details about purchase mechanics, pricing formulas, regulatory compliance requirements, representations and warranties, and conditions for drawdowns.

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

1. Parties: Identification of the company and the investor

2. Background: Context of the agreement and basic transaction structure

3. Definitions: Key terms used throughout the agreement

4. Purchase Commitment: Basic terms of the investor's commitment to purchase shares

5. Commitment Period: Duration of the investor's commitment and any extension provisions

6. Pricing Mechanism: Formula for determining the purchase price of shares

7. Drawdown Mechanics: Process for the company to request share purchases

8. Conditions Precedent: Conditions that must be satisfied before purchases can occur

9. Representations and Warranties: Statements of fact by both parties

10. Covenants: Ongoing obligations of both parties

11. Closing Procedures: Process for completing each share purchase

12. Termination: Circumstances under which the agreement can be terminated

13. Indemnification: Obligations to compensate for losses or breaches

14. Confidentiality: Protection of confidential information

15. Notices: Communication procedures between parties

16. Governing Law and Jurisdiction: Austrian law provisions and dispute resolution

17. General Provisions: Standard boilerplate clauses

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

1. Registration Rights: Rights of the investor to require registration of shares for public trading, included if the company is or may become publicly traded

2. Market Making Restrictions: Restrictions on the investor's trading activities, included if required by market regulations

3. Shareholder Approval: Provisions regarding obtaining shareholder approval, included if required under corporate documents or law

4. Anti-Dilution Protection: Protection for the investor against dilutive events, included if negotiated

5. Minimum Price Protection: Floor price provisions for share purchases, included if negotiated

6. Financial Advisor Provisions: Terms related to financial advisors, included if advisors are involved in the transaction

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

1. Calculation of Purchase Price: Detailed formula and examples of price calculations

2. Form of Drawdown Notice: Standard form for the company to request share purchases

3. Conditions Precedent Documents: List of required documents and certificates

4. Company Information: Key corporate and capital structure information

5. Form of Compliance Certificate: Standard form for confirming compliance with conditions

6. Restricted Jurisdictions: List of jurisdictions where shares cannot be sold

7. Form of Legal Opinions: Required format for legal opinions

8. Trading Parameters: Specific rules and restrictions on trading activities

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

Jurisdiction

Austria

Publisher

Genie AI

Document Type

Equity Agreement

Cost

Free to use

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