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Shares Purchase Agreement for Saudi Arabia

Shares Purchase Agreement Template for Saudi Arabia

A comprehensive legal agreement governed by Saudi Arabian law that documents the terms and conditions for the purchase and sale of shares in a company. The document details the purchase price, payment terms, warranties, representations, conditions precedent, and completion mechanics. It complies with Saudi Companies Law, Capital Market Authority regulations (for listed companies), and considers Shariah principles where applicable. The agreement includes provisions for due diligence findings, regulatory approvals, and post-completion obligations, while incorporating specific requirements under Saudi commercial and corporate laws.

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What is a Shares Purchase Agreement?

The Shares Purchase Agreement is a crucial document used in Saudi Arabian corporate transactions for transferring ownership of shares between parties. It is essential for mergers and acquisitions, corporate restructurings, and investment transactions in the Kingdom. The agreement must comply with Saudi Companies Law, Capital Market Authority regulations (for listed companies), and other relevant regulations including foreign investment laws where applicable. This document typically follows extensive due diligence and negotiations, incorporating comprehensive warranties, indemnities, and conditions precedent. It's particularly relevant in the context of Saudi Arabia's Vision 2030, which has led to increased M&A activity and foreign investment in the Kingdom. The agreement must be structured to account for local regulatory requirements, including any necessary governmental approvals and Shariah compliance considerations.

What sections should be included in a Shares Purchase Agreement?

1. Parties: Identification of the Seller(s) and Buyer(s) with full legal names and details

2. Background: Context of the transaction, including brief description of the target company and purpose of the agreement

3. Definitions and Interpretation: Definitions of key terms and interpretation rules used throughout the agreement

4. Sale and Purchase: Core transaction terms including shares being sold, purchase price, and payment mechanics

5. Conditions Precedent: Conditions that must be satisfied before completion of the transaction

6. Pre-Completion Obligations: Obligations of parties between signing and completion, including conduct of business requirements

7. Completion: Mechanics and requirements for closing the transaction, including deliverables and timing

8. Warranties: Seller's warranties regarding the shares and the target company

9. Limitations on Liability: Limitations on warranty claims and general liability of the parties

10. Confidentiality: Obligations regarding confidential information and announcements

11. Post-Completion Covenants: Ongoing obligations after completion

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

13. General Provisions: Standard boilerplate provisions including notices, amendments, and entire agreement

What sections are optional to include in a Shares Purchase Agreement?

1. Tax Covenants: Specific tax-related provisions, used when tax exposures are significant or when involving international parties

2. Non-Competition: Restrictions on seller's competing activities, used when seller could potentially compete with target business

3. Transitional Services: Provisions for post-completion services by seller, used when target company relies on seller's infrastructure

4. Employee Matters: Specific provisions regarding employees, used when employment issues are material to the transaction

5. Intellectual Property Rights: Specific IP-related provisions, used when IP is material to the target business

6. Security for Claims: Provisions for securing warranty claims, used in higher-risk transactions

7. Foreign Investment Provisions: Additional provisions required when buyer is a foreign entity

8. Shariah Compliance: Specific provisions ensuring compliance with Shariah principles, used when required by parties

What schedules should be included in a Shares Purchase Agreement?

1. Details of the Target Company: Corporate information, share capital structure, and subsidiaries

2. Warranties: Detailed warranties regarding the company, business, and assets

3. Properties: Details of real estate owned or leased by the target company

4. Intellectual Property: List of IP rights owned or licensed by the target company

5. Material Contracts: List and details of key contracts

6. Employees: Details of key employees and employment terms

7. Completion Deliverables: List of documents and items to be delivered at completion

8. Form of Resignation Letters: Template resignation letters for outgoing directors

9. Disclosure Letter: Exceptions and qualifications to the warranties

10. Corporate Approvals: Required corporate and regulatory approvals

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Saudi Arabia

Publisher

Ƶ

Document Type

Purchase Agreement

Cost

Free to use
Relevant legal definitions











































Clauses




































Relevant Industries

Financial Services

Real Estate

Technology

Healthcare

Manufacturing

Retail

Energy

Telecommunications

Construction

Professional Services

Education

Transportation & Logistics

Hospitality

Mining & Minerals

Agriculture

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Compliance

Business Development

Investment

Board Secretariat

Risk Management

Strategy

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Legal Director

Corporate Secretary

Investment Director

Mergers & Acquisitions Manager

Commercial Director

Business Development Manager

Finance Manager

Legal Counsel

Compliance Officer

Board Member

Investment Analyst

Transaction Manager

Due Diligence Manager

Industries








Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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