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Stock Sale Contract
"I need a Stock Sale Contract under Saudi Arabian law for the sale of 40% shares in a private manufacturing company to a foreign investor, with completion scheduled for March 2025 and including specific provisions for CMA approval and foreign ownership requirements."
1. Parties: Identification of the Seller(s) and Buyer(s), including full legal names, commercial registration numbers, and authorized representatives
2. Background: Context of the transaction, including description of the company whose shares are being sold and current ownership structure
3. Definitions: Key terms used throughout the agreement, including specific Saudi legal terminology and regulatory references
4. Sale and Purchase: Core transaction terms including number of shares, price per share, and total consideration
5. Purchase Price and Payment: Payment terms, method, currency, and any escrow arrangements in compliance with Saudi banking regulations
6. Conditions Precedent: Prerequisites for closing, including regulatory approvals from CMA and other relevant authorities
7. Completion: Closing mechanics, timing, and requirements for share transfer under Saudi law
8. Seller's Warranties: Standard and specific warranties regarding share ownership, authority to sell, and company condition
9. Buyer's Warranties: Warranties regarding authority to purchase and compliance with Saudi investment laws
10. Pre-Completion Covenants: Obligations between signing and closing, including conduct of business requirements
11. Confidentiality: Non-disclosure obligations and permitted disclosures under Saudi law
12. Governing Law and Jurisdiction: Confirmation of Saudi law governance and jurisdiction of Saudi courts or arbitration centers
1. Foreign Investment Provisions: Required when buyer is a foreign entity, addressing SAGIA requirements and foreign ownership restrictions
2. Tag-Along Rights: Optional protection for minority shareholders in partial stake sales
3. Drag-Along Rights: Optional mechanism for majority shareholders to force minority participation in a sale
4. Anti-dilution Provisions: Optional protection against future share issuances, if relevant to the transaction
5. Regulatory Compliance: Additional section needed for regulated industries like financial services or insurance
6. Tax Indemnities: Specific provisions for tax liability allocation, particularly relevant for large transactions
7. Post-Completion Covenants: Optional restrictions such as non-compete or continued employment of key personnel
8. Shareholder Approval Process: Required for public companies or when articles of association mandate shareholder approval
1. Share Details: Complete description of shares being sold including class, rights, and any encumbrances
2. Warranties: Detailed list of seller's and buyer's warranties
3. Conditions Precedent: Detailed list of all required approvals and conditions
4. Completion Requirements: Checklist of documents and actions required for closing
5. Disclosure Letter: Exceptions and qualifications to warranties
6. Corporate Documents: Copies of relevant corporate approvals, powers of attorney, and constitutional documents
7. Regulatory Approvals: Copies or forms of required CMA and other regulatory approvals
8. Payment Schedule: If payment is in installments or subject to adjustments
Authors
Financial Services
Banking
Investment
Private Equity
Real Estate
Manufacturing
Technology
Healthcare
Retail
Energy
Telecommunications
Professional Services
Industrial
Consumer Goods
Legal
Finance
Corporate Development
Mergers & Acquisitions
Compliance
Risk Management
Corporate Secretariat
Investment
Strategic Planning
Business Development
Chief Executive Officer
Chief Financial Officer
Legal Counsel
Corporate Secretary
Investment Director
Mergers & Acquisitions Manager
Compliance Officer
Risk Manager
Board Director
Managing Director
General Counsel
Investment Banker
Private Equity Manager
Corporate Finance Manager
Strategic Planning Director
Business Development Manager
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