Private Placement Contract Template for Saudi Arabia

The Private Placement Contract is essential for companies seeking to raise capital through private offerings in Saudi Arabia. This document is used when an entity wishes to offer securities to a limited number of sophisticated or institutional investors without conducting a public offering. The contract must comply with the Saudi Arabian Capital Market Authority's regulations, particularly the Rules on the Offer of Securities and Continuing Obligations (OSCO), and adhere to Islamic finance principles. It typically includes comprehensive details about the offering, investor qualifications, subscription terms, risk factors, and regulatory compliance requirements. The Private Placement Contract is particularly relevant in scenarios where companies need to raise substantial capital while maintaining confidentiality and avoiding the more stringent requirements of a public offering, all within the framework of Saudi Arabian securities laws and Shariah compliance.

1. Parties: Identification of the issuer, placement agent (if any), and the target investor category

2. Background: Context of the private placement, including the nature of securities being offered

3. Definitions: Key terms used throughout the document, including regulatory definitions from Saudi CMA regulations

4. Securities Offered: Detailed description of the securities, including class, rights, and restrictions

5. Subscription Terms: Terms and conditions of the subscription, including minimum subscription amounts and eligible investor requirements

6. Pricing and Payment: Details of pricing, payment mechanisms, and settlement procedures

7. Use of Proceeds: Intended use of the funds raised through the private placement

8. Risk Factors: Comprehensive disclosure of risks associated with the investment

9. Investor Representations: Declarations and warranties from investors regarding their eligibility and understanding of risks

10. Transfer Restrictions: Limitations on transfer of securities and lock-up periods

11. Shariah Compliance: Confirmation of Shariah compliance and relevant Islamic finance provisions

12. Confidentiality: Provisions regarding the confidential nature of the placement and related information

13. Governing Law and Jurisdiction: Application of Saudi law and jurisdiction of Saudi courts

14. Notices: Communication procedures between parties

15. Termination: Circumstances and procedures for termination of the agreement