¶¶Òõ¶ÌÊÓƵ

The Standby Equity Purchase Agreement (SEPA) is utilized when a company seeks to secure a reliable source of equity financing without immediately diluting existing shareholders. This document, governed by UAE law, establishes a framework where an investor commits to purchasing newly issued shares from the company over time, typically triggered by the company's draw-down notices. The agreement is particularly relevant for growth-stage companies in the UAE market that require flexible access to capital, while also ensuring compliance with UAE federal laws, including Federal Law No. 32 of 2021 and relevant SCA regulations. The document includes comprehensive details about purchase commitments, pricing mechanisms, regulatory requirements, and various conditions that must be met for each investment tranche. It's especially suitable for companies looking to maintain financial stability while having the option to access equity funding when needed, without the immediate pressure of a traditional equity placement.

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

2. Background: Context of the agreement, including company status and purpose of the arrangement

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. Purchase Commitment: Core terms of the standby purchase commitment, including maximum commitment amount

5. Draw Down Mechanics: Process and procedures for initiating and completing draw downs

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

7. Conditions Precedent: Conditions that must be satisfied before draw downs can occur

8. Representations and Warranties: Statements of fact and assurances from both parties

9. Company Covenants: Ongoing obligations of the company during the agreement term

10. Investor Covenants: Ongoing obligations of the investor during the agreement term

11. Regulatory Compliance: Compliance with UAE securities laws and regulations

12. Term and Termination: Duration of the agreement and circumstances for early termination

13. Events of Default: Circumstances constituting default and consequences

14. Confidentiality: Protection of confidential information

15. Notices: Communication procedures between parties

16. Governing Law and Jurisdiction: UAE law as governing law and jurisdiction provisions

17. General Provisions: Standard boilerplate clauses including assignment, amendments, etc.