Regulation S Purchase Agreement

A regulation S purchase agreement is a contractual agreement between an issuer and a buyer. The agreement is made under the regulation S exemption from registration of securities with the U.S. Securities and Exchange Commission (SEC). This exemption is for securities that are offered and sold outside the United States.

The regulation S purchase agreement is designed to ensure compliance with the regulations by both parties. The agreement outlines the terms and conditions of the sale, including the price, payment terms, and delivery of the securities. The agreement also contains representations and warranties from the issuer regarding the securities being sold, as well as indemnification and limitation of liability clauses.

The regulation S exemption is commonly used for offerings of securities in foreign jurisdictions where registration with the SEC is not required. This exemption allows issuers to tap into a global market of investors, including institutional and high-net-worth investors in jurisdictions where the securities are not registered.

There are two types of regulation S offerings: Category 1 and Category 2. Category 1 offerings are sales made to non-U.S. persons outside the United States, while Category 2 offerings are sales made to non-U.S. persons both inside and outside the United States.

It is important for issuers to ensure that they comply with the requirements of the regulation S exemption, as failure to do so could result in penalties and legal action. The regulation S purchase agreement is a key component in ensuring compliance and should be carefully drafted and reviewed by legal professionals.

In summary, a regulation S purchase agreement is a contract between an issuer and a buyer for the sale of securities under the regulation S exemption. The agreement outlines the terms and conditions of the sale and ensures compliance with the regulations. It is an important tool for issuers looking to raise capital from foreign investors and should be carefully drafted and reviewed by legal professionals.