This model document is the work product of a national coalition of attorneys who represent investors, issuers and bank placement agents in PIPE financings. This document should be tailored to meet your specific requirements, and should not be construed as legal advice for any particular facts or circumstances.¹
¹ These model PIPE documents have not been tailored for use in connection with a reverse merger, a deSPAC transaction or a financing requiring stockholder approval under NYSE or Nasdaq rules. Moreover, this document is intended to serve as a starting point for a transaction involving a foreign private issuer and likely will require a number of bespoke provisions related to mechanics, legending and applicable legal and administrative regimes.
SECURITIES PURCHASE AGREEMENT²
² Those investing in ex-U.S. companies should take note of Executive Order 14105 (effective January 2, 2025) which aims to prevent U.S. capital and expertise from advancing military and intelligence capabilities in “countries of concern” (currently identified as China, Hong Kong, and Macau). Certain transactions in technologies deemed particularly sensitive (semiconductors/microelectronics, quantum information technologies, and artificial intelligence) are prohibited, and other transactions must be reported to the Treasury Department. See https://home.treasury.gov/system/files/206/TreasuryDepartmentOutboundInvestmentFinalRuleWEBSITEVERSION.pdf.
This SECURITIES PURCHASE AGREEMENT (this “Agreement”) is dated as of [effective date], by and among [company name], a [type of entity] incorporated/organized under the laws of [jurisdiction of incorporation/organization] (the “Company”), and each of the entities listed on Exhibit A attached to this Agreement (each, an “Investor” and together, the “Investors”).
WHEREAS, the Company and the Investors are executing and delivering this Agreement in reliance upon the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated under the Securities Act³ and/or Regulation S promulgated thereunder;⁴
³ Revise as applicable if not a Regulation D offering. Consider also (and consult with local counsel as to) whether there are any required exemptions under applicable foreign law and any related representations, warranties, covenants, closing deliverables and/or legends.
⁴ Include if sales are made in reliance on Regulation S.
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About this template
What is this template?
This document is a formal contract for the sale of securities by a foreign public company to private investors. It contains specific provisions for American Depositary Shares and foreign private issuer status that are absent from domestic U.S. PIPE templates. It is not for use in deSPAC transactions or financings requiring immediate stockholder approval under exchange rules.
When should you use it?
Use this template when an international company listed on a U.S. exchange seeks to raise capital from sophisticated investors without a full public registration at the time of sale. If the issuer is a domestic U.S. corporation, use a standard NVCA Securities Purchase Agreement instead.
What's inside
| Clause | Name | What it does |
|---|---|---|
| 2.1 | Purchase and Sale | The Company sells and the Investors purchase the number and type of Securities at the price specified on Exhibit A. |
| 2.2 | Closing | Establishes a settlement window between one and five Business Days after the Agreement date for document and fund exchange. |
| 3.8 | SEC Filings; Financial Statements | The Company warrants that its SEC Reports filed over the preceding year comply with the Exchange Act and lack material misstatements. |
| 3.20 | Clinical Data and Regulatory Compliance | Requires the Company to warrant that Studies described in SEC Reports were conducted according to protocols approved by Regulatory Agencies. |
| 3.24 | Investment Company Act; Not a Passive Foreign Investment Company | Warrants the Company is not an investment company and would not have been considered a PFIC as of the most recent audit. |
| 3.38 | Foreign Private Issuer | The Company warrants its status as a foreign private issuer under Rule 405 and a foreign issuer under Regulation S. |
| 4.6 | Investment Representations and Warranties | Investors warrant they are qualified institutional buyers or accredited investors acquiring securities in offshore transactions under Regulation S. |
| 5.3 | Disclosure of Transactions | The Company must issue a press release or file a Form 6-K by 9 a.m. the following Business Day. |
| 5.5 | Removal of Legends | The Company must instruct the Transfer Agent or Depositary to remove restrictive legends when securities become eligible for resale under Rule 144. |
| 5.10 | Indemnification | The Company indemnifies Investors against losses resulting from breaches of representations or covenants made within the Transaction Agreements. |
| 5.11 | Subsequent Equity Sales | Prohibits the Company from issuing Ordinary Shares or equivalents for a period of up to sixty days after the Closing Date. |
| 8.4 | Governing Law; Submission to Jurisdiction | Subjects the Agreement to New York law and submits the parties to the jurisdiction of courts in the Borough of Manhattan. |
Who it's for
- a non-U.S. public company seeking capital through a private placement to institutional investors
- institutional investors purchasing ordinary shares or ADSs from a foreign private issuer
- issuers requiring SEC registration exemptions for transactions involving Regulation S offshore offerings
- bank placement agents managing PIPE financings for cross-border securities transactions
How long it runs and how it's signed
Law it's drafted under
New York note
This version is drafted for New York. US contract and employment rules vary by state, so it will not transfer cleanly elsewhere. Tell GitLaw where the parties are and it adjusts the draft.
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