Sell Buy Back Agreement Template for Saudi Arabia

The Sell Buy Back Agreement is a crucial financial instrument in Saudi Arabia's Islamic finance landscape, providing a Shariah-compliant alternative to conventional repurchase agreements. This document is typically used when parties seek to arrange short-term financing while adhering to Islamic principles that prohibit interest-based transactions. It is particularly relevant in situations where entities need to manage liquidity or secure short-term funding while maintaining ownership interests in valuable assets. The agreement must comply with Saudi Arabian regulations, including oversight from the Saudi Central Bank (SAMA) and adherence to Capital Market Law requirements. It includes detailed provisions for the initial sale, repurchase obligations, pricing mechanisms, and risk management, all structured to ensure Shariah compliance while providing legal certainty under Saudi Arabian law.

1. Parties: Identification of the seller and buyer, including full legal names, registration details, and addresses

2. Background: Context of the agreement and relationship between parties, confirming the intention to enter into a Shariah-compliant sell-buy back arrangement

3. Definitions: Key terms used throughout the agreement, including specific Islamic finance terminology and transaction-specific definitions

4. Sale and Purchase: Terms of the initial sale, including asset description, initial purchase price, and transfer mechanics

5. Repurchase Obligations: Terms of the repurchase transaction, including repurchase price, timing, and execution mechanics

6. Asset Maintenance and Rights: Obligations regarding the maintenance and custody of assets during the agreement period

7. Representations and Warranties: Standard and transaction-specific representations, including Shariah compliance declarations

8. Payment Terms: Details of payment mechanisms, timing, and currency for both sale and repurchase

9. Events of Default: Circumstances constituting default and consequent remedies

10. Termination: Conditions and process for early termination or maturity

11. Governing Law and Jurisdiction: Confirmation of Saudi law governance and dispute resolution mechanisms