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Equity Investment Agreement

Equity Investment Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Equity Investment Agreement

"I need an Equity Investment Agreement for a Series A investment of SAR 5 million into our technology startup, where the foreign institutional investor will acquire a 20% stake and require board representation, with completion planned for March 2025."

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Document background
The Equity Investment Agreement is a crucial document used when an investor seeks to acquire an ownership stake in a Saudi Arabian company through either primary investment (new shares) or secondary purchase (existing shares). This agreement is particularly important in the Saudi Arabian context as it must balance international investment practices with local regulatory requirements and Shariah principles. It typically comes into play during funding rounds, strategic investments, or when bringing in new shareholders, and must comply with the Saudi Companies Law, Capital Market Law, and where applicable, foreign investment regulations. The agreement covers essential elements such as valuation, investment amount, shareholding percentages, governance rights, and exit provisions, while incorporating necessary Shariah-compliant structures and mechanisms.
Suggested Sections

1. Parties: Identification of the investor(s) and investee company, including registration details and addresses

2. Background: Context of the investment, brief description of the company's business, and purpose of the agreement

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

4. Investment Terms: Details of the investment amount, equity stake, share class, and payment mechanics

5. Conditions Precedent: Conditions that must be satisfied before the investment becomes effective

6. Completion: Steps to be taken at closing and completion mechanics

7. Warranties and Representations: Standard and specific warranties from both the company and investors

8. Shariah Compliance: Declarations and undertakings regarding Shariah compliance of the business and investment structure

9. Corporate Governance: Board composition, voting rights, and management provisions

10. Reserved Matters: Decisions requiring special approval from investors

11. Information Rights: Investor's rights to receive financial and operational information

12. Share Transfer Restrictions: Limitations on transfer of shares and pre-emptive rights

13. Exit Rights: Provisions for exit mechanisms including tag-along and drag-along rights

14. Confidentiality: Obligations regarding confidential information

15. Dispute Resolution: Mechanism for resolving disputes under Saudi law

16. General Provisions: Standard boilerplate clauses including notices, amendments, and governing law

Optional Sections

1. Anti-dilution Rights: Include when protecting against future dilution is specifically requested by investors

2. Strategic Rights: Include for strategic investors requiring specific business collaboration rights

3. Founder Commitments: Include when founders are required to give specific commitments or non-compete obligations

4. Employee Stock Option Pool: Include when establishing or maintaining an ESOP is part of the investment terms

5. Foreign Investment Provisions: Include when the investor is foreign and specific SAGIA (Saudi Arabian General Investment Authority) requirements apply

6. Intellectual Property Rights: Include detailed IP provisions when the company's IP is a significant asset

7. Related Party Transactions: Include when specific controls on related party transactions are required

Suggested Schedules

1. Schedule 1: Capital Structure: Pre and post-investment shareholding structure

2. Schedule 2: Warranties: Detailed list of warranties given by the company and founders

3. Schedule 3: Completion Requirements: Detailed list of completion deliverables and requirements

4. Schedule 4: Reserved Matters: Comprehensive list of matters requiring investor approval

5. Schedule 5: Business Plan: Company's business plan and financial projections

6. Schedule 6: Key Personnel: Details of key management and their terms of employment

7. Schedule 7: IP Rights: List of company's intellectual property rights

8. Appendix A: Form of Shareholders' Resolution: Template for shareholders' resolutions required for completion

9. Appendix B: Form of Board Resolution: Template for board resolutions required for completion

10. Appendix C: Shariah Compliance Certificate: Certificate from approved Shariah advisor confirming compliance

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

alex.den.21@genieai.co
Relevant legal definitions























































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Relevant Industries

Technology

Healthcare

Manufacturing

Financial Services

Real Estate

Retail

Education

Energy

Telecommunications

Agriculture

Transportation

Entertainment

Construction

Professional Services

Relevant Teams

Legal

Finance

Compliance

Corporate Development

Strategy

Investment

Risk Management

Board Secretariat

Corporate Governance

Business Development

Shariah Advisory

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Investment Director

Corporate Lawyer

Financial Controller

Company Secretary

Board Member

Investment Manager

Compliance Officer

Managing Director

Business Development Director

Strategic Planning Manager

Risk Manager

Shariah Compliance Officer

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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