Simple Agreement For Equity Template for Saudi Arabia

The Simple Agreement For Equity (SAFE) has been adapted for use in Saudi Arabia to provide a streamlined method for startup investment while ensuring compliance with local regulations and Shariah principles. This document is typically used when a company seeks early-stage funding but wants to defer the formal valuation process until a later financing round. The agreement outlines the investment amount, conversion mechanisms, investor rights, and compliance requirements under Saudi law. It incorporates necessary provisions from the Saudi Companies Law, Capital Market Authority regulations, and Ministry of Commerce requirements, while maintaining the efficient nature of the SAFE format. The document is particularly relevant for startups in Saudi Arabia's growing innovation ecosystem and aligns with the kingdom's Vision 2030 objectives for economic diversification and entrepreneurship development.

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

2. Background: Context of the agreement, including the company's business nature and the investor's interest in investing

3. Definitions: Key terms used throughout the agreement, including specific definitions required under Saudi law

4. Investment Amount: Details of the investment sum and payment terms

5. Events Triggering Conversion: Circumstances under which the investment converts to equity, including Qualifying Financing, Exit Event, or Dissolution Event

6. Conversion Mechanics: Process and calculations for converting the investment into equity shares

7. Company Representations: Company's warranties and representations, including compliance with Saudi law and Shariah principles

8. Investor Representations: Investor's warranties and representations, including eligibility to invest under Saudi regulations

9. Information Rights: Investor's rights to receive company information and financial statements

10. Most Favored Nation: Protection ensuring the investor receives terms as favorable as other SAFE holders

11. Governing Law and Jurisdiction: Specification of Saudi law as governing law and jurisdiction for disputes

12. Notices: Process for formal communications between parties

13. Miscellaneous: Standard provisions including amendments, assignments, and severability