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Shareholder Exit Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

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."

Document background
The Shareholder Exit Agreement is a crucial document used when one or more shareholders wish to dispose of their shareholding in a Saudi Arabian company. It becomes necessary in various scenarios including retirement, strategic divestment, dispute resolution, or business restructuring. The agreement must comply with Saudi Arabia's Companies Law, Capital Market regulations (for listed companies), and Sharia principles. It typically includes detailed provisions for share valuation, transfer mechanics, regulatory approvals, and post-exit obligations. The document is particularly important in the Saudi context due to specific local requirements for share transfers, foreign investment restrictions, and the need for various governmental approvals. The agreement serves to protect all parties' interests while ensuring a smooth transition of ownership in accordance with Saudi legal requirements.
Suggested Sections

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

Optional Sections

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

Suggested Schedules

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

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








































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Relevant Industries

Manufacturing

Technology

Financial Services

Real Estate

Healthcare

Retail

Construction

Professional Services

Energy

Telecommunications

Transportation

Hospitality

Education

Mining

Agriculture

Relevant Teams

Legal

Finance

Corporate Governance

Compliance

Board Secretariat

Risk Management

Corporate Affairs

Shareholder Relations

Investment

Internal Audit

Relevant Roles

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

Industries








Teams

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