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Shareholder Exit Agreement
"I need a Shareholder Exit Agreement for my technology startup in Riyadh, where one of our founding shareholders (holding 15% shares) wants to exit by March 2025, with payment to be made in three installments over 18 months."
1. Parties: Identification of the exiting shareholder(s), remaining shareholders, and the company
2. Background: Current shareholding structure, reason for exit, and relevant corporate history
3. Definitions: Key terms used throughout the agreement, including specific Saudi legal and regulatory terms
4. Share Transfer Terms: Core terms of the exit, including number of shares, price, and payment terms
5. Completion Mechanics: Step-by-step process for executing the exit, including regulatory approvals and documentation
6. Warranties and Representations: Standard warranties from both exiting and remaining shareholders
7. Confidentiality: Obligations regarding company information and terms of exit
8. Non-Compete and Non-Solicitation: Restrictions on exiting shareholder's future activities
9. Tax and Costs: Allocation of tax liabilities, zakat obligations, and transaction costs
10. Governing Law and Jurisdiction: Confirmation of Saudi law application and dispute resolution mechanism
11. General Provisions: Standard boilerplate clauses adapted for Saudi law compliance
1. Earn-out Provisions: Used when part of the exit payment is contingent on future performance
2. Foreign Investment Provisions: Required when the exiting or remaining shareholders include non-Saudi entities
3. Regulatory Compliance: Specific section needed for regulated industries or listed companies
4. Continuing Obligations: Used when the exiting shareholder retains certain ongoing responsibilities
5. Share Pledge Arrangements: Required when shares are used as security for deferred payments
6. Management Transition: Needed when exiting shareholder held management positions
7. Islamic Finance Compliance: Required when transaction involves Islamic financing structures
1. Share Transfer Form: Official form for recording the transfer in company records
2. Current Shareholding Structure: Detailed breakdown of pre-exit shareholding
3. Post-Exit Shareholding Structure: Detailed breakdown of post-exit shareholding
4. Completion Checklist: List of all required actions and documents for exit completion
5. Valuation Report: Independent valuation of shares (if applicable)
6. Regulatory Approvals: Copies of required governmental and regulatory approvals
7. Board and Shareholder Resolutions: Required corporate approvals for the exit
8. Payment Schedule: Details of payment arrangements and installments if applicable
Authors
Manufacturing
Technology
Financial Services
Real Estate
Healthcare
Retail
Construction
Professional Services
Energy
Telecommunications
Transportation
Hospitality
Education
Mining
Agriculture
Legal
Finance
Corporate Governance
Compliance
Board Secretariat
Risk Management
Corporate Affairs
Shareholder Relations
Investment
Internal Audit
Chief Executive Officer
Chief Financial Officer
Legal Director
Company Secretary
Corporate Governance Officer
Board Member
Managing Director
Compliance Officer
Investment Director
Shareholder Relations Manager
General Counsel
Finance Manager
Corporate Affairs Director
Risk Management Officer
Business Development Director
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