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Preferred Stock Agreement Template for Qatar

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Key Requirements PROMPT example:

Preferred Stock Agreement

"I need a Preferred Stock Agreement for a Series B investment round closing on March 15, 2025, where we're issuing convertible preferred shares with a 1x liquidation preference and standard anti-dilution protection to a Qatar-based private equity firm investing $10 million for a 15% stake."

Document background
The Preferred Stock Agreement is a vital legal instrument used when a company in Qatar seeks to raise capital by issuing shares with preferential rights to investors. This document type is particularly relevant for growing companies, private equity investments, and corporate restructuring situations. The agreement must comply with Qatar's Commercial Companies Law No. 11 of 2015 and related regulations, while potentially incorporating Sharia-compliant structures where required. It typically includes detailed provisions on dividend rights, voting powers, conversion privileges, anti-dilution protections, and liquidation preferences. The document is essential for protecting both the issuing company's and investors' interests while ensuring alignment with Qatar's regulatory framework and corporate governance standards. Used primarily in private investment transactions, the agreement helps structure sophisticated investment arrangements while maintaining compliance with local legal requirements.
Suggested Sections

1. Parties: Identification of the Company and the Preferred Stock purchaser(s)

2. Background: Context of the preferred stock issuance, including company status and purpose of the investment

3. Definitions: Key terms used throughout the agreement

4. Issuance of Preferred Stock: Details of the preferred shares being issued, including number, price, and class

5. Dividend Rights: Terms of dividend payments, including rate, frequency, and priority

6. Voting Rights: Scope and limitations of voting rights attached to the preferred shares

7. Conversion Rights: Terms and conditions for converting preferred shares to common shares

8. Liquidation Preferences: Rights and priorities in case of company liquidation or sale

9. Anti-dilution Protection: Mechanisms to protect preferred stockholders from dilution

10. Transfer Restrictions: Limitations and conditions on the transfer of preferred shares

11. Information Rights: Rights of preferred stockholders to receive company information and reports

12. Registration Rights: Rights related to the registration of shares for public trading

13. Board Representation: Rights to appoint directors or observers to the board

14. Governing Law and Jurisdiction: Specification of Qatar law as governing law and relevant jurisdiction

15. Notices: Procedures for formal communications between parties

16. Amendment and Waiver: Procedures for modifying the agreement or waiving rights

Optional Sections

1. Redemption Rights: Optional terms for company or investor redemption rights, used when parties want the ability to force a buyback of shares

2. Tag-Along Rights: Rights of preferred stockholders to join in sale of shares by other stockholders, included when minority shareholder protection is desired

3. Drag-Along Rights: Rights to force preferred stockholders to join in a company sale, included when majority shareholders want exit flexibility

4. Participation Rights: Rights to participate in future funding rounds, included when investors want to maintain their ownership percentage

5. Dividend Stopper: Restrictions on paying dividends to other classes of shares, used when stronger dividend protection is needed

6. Most Favored Nation Provision: Guarantees that terms offered to future investors won't be more favorable, included in early-stage investments

7. Sharia Compliance Provisions: Specific provisions ensuring compliance with Islamic law, required when parties require Sharia compliance

Suggested Schedules

1. Schedule A - Share Certificate: Form of share certificate for the preferred stock

2. Schedule B - Capitalization Table: Complete breakdown of company's capital structure pre and post-investment

3. Schedule C - Disclosure Schedule: Company disclosures and exceptions to representations and warranties

4. Schedule D - Registration Rights Details: Detailed procedures and terms for share registration rights

5. Schedule E - Conversion Calculations: Detailed methodology for calculating conversion ratios and adjustments

6. Schedule F - Corporate Documents: Copies of relevant corporate authorizations and resolutions

7. Schedule G - Investor Rights: Detailed description of specific investor rights and procedures

8. Appendix 1 - Form of Adherence Agreement: Template for new parties to join the agreement

9. Appendix 2 - Board Resolution Template: Template for board resolutions required under the agreement

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

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Relevant Industries

Financial Services

Technology

Real Estate

Energy and Resources

Healthcare

Manufacturing

Infrastructure Development

Telecommunications

Professional Services

Retail and Consumer

Education

Transportation and Logistics

Relevant Teams

Legal

Finance

Corporate Governance

Compliance

Investment

Risk Management

Corporate Secretary Office

Board of Directors

Executive Leadership

Treasury

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Corporate Secretary

Investment Director

Legal Counsel

Finance Director

Investment Manager

Corporate Governance Officer

Compliance Officer

Board Director

Private Equity Manager

Venture Capital Manager

Investment Banker

Corporate Attorney

Financial Controller

Risk Manager

Company Secretary

Industries








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