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Share Exchange Agreement Template for Saudi Arabia

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Key Requirements PROMPT example:

Share Exchange Agreement

"I need a Share Exchange Agreement to facilitate a family business restructuring where three private Saudi companies will exchange shares to create a holding company structure, with completion targeted for March 2025."

Document background
A Share Exchange Agreement is a crucial document used in corporate restructuring, merger transactions, or strategic combinations in Saudi Arabia. This agreement is particularly relevant when companies wish to combine their businesses or create a holding structure through the exchange of shares rather than a traditional purchase and sale transaction. The document must be carefully structured to comply with Saudi Companies Law (Royal Decree No. M/3), Capital Market Authority regulations, and where applicable, foreign investment restrictions. The agreement typically includes detailed provisions on valuation, exchange ratios, regulatory approvals, warranties, and completion mechanics. It's commonly used in both private and public company transactions, though additional requirements apply for listed companies. The document serves as the primary transaction document that governs the entire share exchange process, from signing through to completion, and includes post-completion obligations and protections for all parties involved.
Suggested Sections

1. Parties: Identification of the parties involved in the share exchange, including full legal names and registration details

2. Background: Context of the transaction, brief description of the companies involved, and purpose of the share exchange

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

4. Share Exchange Structure: Details of the shares being exchanged, exchange ratios, and mechanics of the exchange

5. Consideration: Description of the consideration for the share exchange, including any adjustments or true-up mechanisms

6. Conditions Precedent: Conditions that must be satisfied before the share exchange can complete, including regulatory approvals

7. Pre-Completion Obligations: Obligations of each party between signing and completion, including conduct of business requirements

8. Completion Mechanics: Detailed process for completing the share exchange, including timing and delivery requirements

9. Representations and Warranties: Standard and specific warranties about the companies, shares, and business

10. Indemnification: Provisions for compensation in case of breach of warranties or other obligations

11. Restrictive Covenants: Non-compete and non-solicitation provisions as applicable

12. Confidentiality: Provisions regarding confidential information and announcements

13. Notices: Process and requirements for formal communications between parties

14. Governing Law and Jurisdiction: Confirmation of Saudi law as governing law and jurisdiction for disputes

15. General Provisions: Standard boilerplate provisions including severability, entire agreement, and amendments

Optional Sections

1. Tax Provisions: Detailed tax and zakat provisions, required when tax implications are significant or when involving foreign parties

2. Shariah Compliance: Specific provisions ensuring compliance with Shariah principles, required when parties require explicit Shariah compliance

3. Employee Matters: Provisions dealing with employees and benefits, required when employment arrangements are affected

4. Intellectual Property: Special provisions for IP transfer or licensing, required when IP is a significant aspect of the transaction

5. Third Party Consents: Provisions regarding obtaining third party consents, required when material contracts require consent for change of control

6. Break Fee: Provisions for break fee or reverse break fee, optional but common in larger transactions

7. Foreign Investment Provisions: Required when foreign investors are involved, addressing SAGIA requirements and foreign ownership restrictions

Suggested Schedules

1. Share Capital Structure: Details of the current and post-completion share capital structure of both companies

2. Exchange Mechanics: Detailed procedures and timeline for the share exchange process

3. Warranties: Detailed warranties given by each party

4. Properties: List and details of material properties owned or leased

5. Material Contracts: List and summary of material contracts

6. Intellectual Property: Schedule of material intellectual property rights

7. Required Consents: List of required regulatory and third party consents

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

9. Form of Transfer Instruments: Pro forma share transfer documentation compliant with Saudi requirements

10. Disclosure Letter: Exceptions and qualifications to the warranties

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

Relevant legal definitions















































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Relevant Industries

Financial Services

Manufacturing

Technology

Real Estate

Healthcare

Energy

Mining

Telecommunications

Retail

Construction

Professional Services

Transportation and Logistics

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Compliance

Risk Management

Treasury

Corporate Secretariat

Board Secretariat

Strategy

Investment

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Corporate Secretary

Head of Mergers & Acquisitions

Chief Legal Officer

Board Director

Managing Director

Investment Director

Corporate Development Manager

Financial Controller

Compliance Officer

Risk Manager

Strategy Director

Treasury 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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