Shareholders Agreement And Share Purchase Agreement Template for Saudi Arabia

The Shareholders Agreement And Share Purchase Agreement is essential for transactions involving the sale and purchase of shares in Saudi Arabian companies while establishing long-term shareholder relationships. It is typically used in private company acquisitions, joint ventures, or corporate restructurings where existing shares are being transferred and ongoing shareholder relationships need to be regulated. The document must comply with Saudi Arabian law, including the Companies Law of 2015, Capital Market regulations, and Sharia principles. It addresses both immediate transaction needs (purchase price, completion mechanics, warranties) and long-term governance requirements (board composition, reserved matters, share transfer restrictions). Foreign investment considerations may apply when non-Saudi parties are involved, requiring compliance with the Foreign Investment Law and obtaining necessary approvals from the Ministry of Investment.

1. Parties: Identification of all parties to the agreement including seller(s), purchaser(s), and continuing shareholders

2. Background: Context of the transaction and company information, including company registration details and current shareholding structure

3. Definitions and Interpretation: Definitions of key terms and interpretation rules, including Sharia-compliant terminology where relevant

4. Sale and Purchase of Shares: Core transaction terms including number of shares, purchase price, and payment mechanisms

5. Completion: Mechanics and requirements for closing the share purchase transaction

6. Conditions Precedent: Prerequisites that must be satisfied before completion, including regulatory approvals

7. Warranties and Representations: Standard warranties from sellers and purchasers, including Sharia compliance warranties

8. Board Composition and Management: Structure and appointment rights for board of directors and management positions

9. Shareholder Rights and Obligations: Key rights including voting, dividends, and information rights

10. Share Transfer Restrictions: Limitations on transfer of shares including right of first refusal and tag-along/drag-along rights

11. Reserved Matters: Decisions requiring special shareholder approval

12. Deadlock Resolution: Procedures for resolving fundamental disagreements between shareholders

13. Confidentiality: Protection of company and transaction confidential information

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

15. Governing Law and Dispute Resolution: Saudi law as governing law and dispute resolution mechanisms