ERISA Representations
(Rule 144A / Regulation S Purchase Agreement) (Pro-issuer)

Summary

Use these ERISA Representations (Rule 144A / Regulation S Purchase Agreement) (Pro-issuer) to address potential issues relating to the Employee Retirement Security Act (ERISA) in a purchase agreement for an unregistered offering of debt securities under Rule 144A and/or Regulation S of the Securities Act of 1933 (Securities Act). These clauses include practical guidance, drafting notes, and an optional clause. Rule 144A (17 CFR 230.144A) provides an exemption for resales of securities, and not for a primary issuance. Accordingly, the purchase agreement provides that on the issue date of the securities, the initial purchasers will purchase the securities from the issuer (referred to as the “Company” in the purchase agreement) in a “private placement” under Section 4(a)(2) of the Securities Act (15 U.S.C. § 77d(a)(2)) (often in reliance on Regulation D (17 C.F.R. § 230.501 et seq.)), and re-sell them to “qualified institutional buyers,” or QIBs, under Rule 144A (or to non-U.S. investors in reliance upon Regulation S (17 C.F.R. §§ 230.901–230.905)). This is in contrast to an underwriting agreement for a registered offering, in which the underwriters agree to purchase registered securities for distribution and sale to investors. However, purchase agreements do have a variety of features in common with underwriting agreements. Use these issuer-friendly clauses in conjunction with the Purchase Agreement (Rule 144A and/or Regulation S Debt Offering) available in Practical Guidance’s Capital Markets & Corporate Governance practice area, which contains all provisions of the purchase agreement. The section numbering provided in this template corresponds to the section numbering in the purchase agreement. For ERISA representations drafted from the perspective of the initial purchasers, see ERISA Representations (Rule 144A / Regulation S Purchase Agreement) (Pro-initial Purchaser). For more information on Rule 144A/Regulation S purchase agreements, see Purchase Agreement Drafting for a Rule 144A / Regulation S Debt Offering available in Practical Guidance’s Capital Markets & Corporate Governance practice area.