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Management Buyout Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Management Buyout Agreement

"I need a Management Buyout Agreement for a Saudi manufacturing company where four senior managers will acquire 100% of shares from the current family owners, with completion planned for March 2025 and including vendor financing provisions."

Document background
The Management Buyout Agreement is a sophisticated transaction document used when a company's management team seeks to acquire ownership from existing shareholders in Saudi Arabia. This document is essential for structuring the acquisition in compliance with Saudi Companies Law, Capital Market Authority regulations (if applicable), and Shariah principles. It covers crucial elements including share transfer mechanisms, purchase price determination, payment terms, warranties, and regulatory approvals. The agreement becomes necessary when management sees an opportunity to take ownership control, often during succession planning or when external shareholders wish to exit. It must address specific Saudi Arabian requirements such as foreign ownership restrictions, regulatory approvals, and local corporate governance standards. The document typically includes detailed provisions for transitional arrangements, ensuring business continuity while protecting all parties' interests under Saudi jurisdiction.
Suggested Sections

1. Parties: Identification of all parties involved in the MBO, including current shareholders, management team purchasers, and any guarantors

2. Background: Context of the transaction, current ownership structure, and purpose of the management buyout

3. Definitions: Detailed definitions of terms used throughout the agreement

4. Sale and Purchase Agreement: Core transaction terms including shares/assets being purchased and consideration

5. Purchase Price and Payment Terms: Detailed breakdown of purchase price, payment structure, and any earn-out mechanisms

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

7. Completion Mechanics: Step-by-step process for closing the transaction

8. Seller Warranties: Representations and warranties regarding the company, its assets, and operations

9. Buyer Warranties: Representations and warranties from the management team regarding capacity and funding

10. Pre-Completion Obligations: Conduct of business requirements between signing and completion

11. Post-Completion Obligations: Actions required after completion, including transition arrangements

12. Restrictive Covenants: Non-compete and non-solicitation provisions for selling shareholders

13. Confidentiality: Provisions regarding confidential information and announcements

14. Governing Law and Jurisdiction: Specification of Saudi law as governing law and dispute resolution mechanisms

15. General Provisions: Standard boilerplate clauses including notices, amendments, and severability

Optional Sections

1. External Financing Arrangements: Required if the MBO involves bank or third-party financing

2. Regulatory Compliance: Required for regulated industries or if CMA approval is needed

3. Foreign Investment Provisions: Required if any buyers are non-Saudi nationals

4. Employee Matters: Required if significant employee transfers or changes are involved

5. Tax Covenant: Required for complex tax arrangements or international implications

6. Shariah Compliance Declaration: Required if specific Shariah-compliant financing is involved

7. Intellectual Property Transfer: Required if significant IP assets are involved in the transaction

8. Real Estate Provisions: Required if property transfers are part of the transaction

Suggested Schedules

1. Schedule 1 - Company Information: Detailed corporate information including shareholding structure

2. Schedule 2 - Properties: List and details of all company properties

3. Schedule 3 - Intellectual Property: Schedule of all IP rights owned or used by the company

4. Schedule 4 - Material Contracts: List of key commercial contracts and arrangements

5. Schedule 5 - Employee Information: Details of key employees and employment terms

6. Schedule 6 - Completion Requirements: Detailed list of completion deliverables and requirements

7. Schedule 7 - Warranties: Detailed warranties and any specific disclosures

8. Schedule 8 - Bank Accounts: Details of company bank accounts and financial arrangements

9. Appendix A - Form of Resignation Letters: Template resignation letters for outgoing directors

10. Appendix B - Form of Board Resolutions: Template board resolutions required for completion

11. Appendix C - Power of Attorney: Form of any required powers of attorney

Authors

Alex Denne

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

Relevant legal definitions




















































Clauses









































Relevant Industries

Manufacturing

Retail

Technology

Healthcare

Construction

Professional Services

Logistics

Real Estate

Education

Hospitality

Industrial Services

Trading

Media and Entertainment

Food and Beverage

Automotive

Relevant Teams

Legal

Finance

Corporate Development

Executive Leadership

Operations

Human Resources

Compliance

Risk Management

Treasury

Corporate Secretariat

Strategic Planning

Investor Relations

Relevant Roles

Chief Executive Officer

Managing Director

Chief Financial Officer

Chief Operating Officer

Finance Director

Operations Director

Company Secretary

Legal Counsel

Board Member

Department Head

General Manager

Investment Manager

Corporate Development Manager

Senior Management Team Member

Business Unit Director

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, 聽Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination, 聽Severance Pay, Governing Law, Entire Agreemen

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