Co Investment Agreement for Saudi Arabia

Co Investment Agreement Template for Saudi Arabia

A comprehensive legal agreement governed by Saudi Arabian law that establishes the terms and conditions for multiple parties to jointly invest in a specific venture or company. The document addresses key aspects including investment structure, governance mechanisms, profit distribution, and exit strategies, while ensuring compliance with both Saudi commercial law and Shariah principles. It includes detailed provisions for investor rights, management participation, capital contribution schedules, and dispute resolution mechanisms specific to the Saudi Arabian jurisdiction.

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What is a Co Investment Agreement?

The Co-Investment Agreement serves as a crucial legal framework for structuring joint investment activities in Saudi Arabia, particularly in the context of the kingdom's Vision 2030 economic transformation program. This document is typically used when multiple investors seek to pool their resources and expertise to invest in specific opportunities while maintaining clear governance and risk-sharing mechanisms. The agreement must comply with Saudi Arabian laws, including the Companies Law, Foreign Investment Law, and Shariah principles. It outlines investment terms, capital commitments, management rights, profit-sharing arrangements, exit mechanisms, and dispute resolution procedures. The document is particularly relevant for both domestic and international investors engaging in Saudi Arabian markets, requiring careful consideration of local regulatory requirements and investment restrictions.

What sections should be included in a Co Investment Agreement?

1. Parties: Identification of all parties to the agreement, including their legal status and registration details

2. Background: Context of the co-investment arrangement, including the purpose and objectives of the collaboration

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

4. Investment Structure: Details of the investment arrangement, including investment amounts, phases, and mechanics

5. Investment Conditions: Conditions precedent and subsequent for the investment, including regulatory approvals

6. Governance and Management: Management structure, decision-making processes, and voting rights

7. Rights and Obligations: Respective rights and obligations of all parties, including funding obligations

8. Profit Distribution: Mechanism for sharing profits and losses, including distribution waterfall

9. Transfer Restrictions: Limitations on transfer of interests and right of first refusal provisions

10. Exit Mechanisms: Provisions for exit including tag-along, drag-along rights, and IPO scenarios

11. Representations and Warranties: Standard and specific representations and warranties from all parties

12. Confidentiality: Protection of confidential information and trade secrets

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

14. Governing Law and Dispute Resolution: Choice of law and dispute resolution mechanisms

15. General Provisions: Standard boilerplate clauses including notices, amendments, and severability

What sections are optional to include in a Co Investment Agreement?

1. Shariah Compliance: Specific provisions ensuring compliance with Islamic finance principles, required when the investment structure needs to be Shariah-compliant

2. Anti-Dilution Protection: Provisions protecting investors from dilution in future funding rounds, included when dealing with scalable businesses

3. Strategic Rights: Special rights for strategic investors, included when there are industry-specific strategic partnerships

4. Employee Matters: Provisions regarding key employees and management, included when human capital is crucial to the investment

5. Intellectual Property Rights: Detailed IP provisions, included when the investment involves significant IP assets

6. Non-Competition: Restrictions on competitive activities, included when protecting market position is crucial

7. Foreign Investment Provisions: Special provisions required for foreign investors, included when non-Saudi investors are involved

What schedules should be included in a Co Investment Agreement?

1. Investment Schedule: Detailed breakdown of investment amounts, timing, and valuation

2. Capitalization Table: Current and post-investment ownership structure

3. Business Plan: Detailed business plan and financial projections

4. Key Performance Indicators: Specific performance metrics and targets

5. Corporate Documents: Copies of relevant corporate documents and licenses

6. Management Structure: Detailed governance structure and organizational chart

7. Reserved Matters: List of decisions requiring special approval

8. Form of Shareholder Resolution: Template for shareholder resolutions

9. Completion Checklist: List of conditions and requirements for closing

10. Anti-Money Laundering Documentation: Required AML and KYC documentation

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

Saudi Arabia

Publisher

Genie AI

Cost

Free to use

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