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Shareholder Support Agreement Template for South Africa

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Key Requirements PROMPT example:

Shareholder Support Agreement

"I need a Shareholder Support Agreement under South African law for a mining company where three major shareholders will provide financial guarantees and operational support for a new mining project, with specific provisions for B-BBEE compliance."

Document background
The Shareholder Support Agreement is a crucial document in South African corporate practice, typically used when a company requires formal commitment from its shareholders for ongoing or future support. This agreement becomes particularly important in project finance scenarios, during company expansion, or when seeking external financing where lenders require shareholder backing. The document outlines the nature, extent, and conditions of support, whether financial (such as additional capital injections or guarantees) or operational. It must comply with South African legislation, particularly the Companies Act 71 of 2008, and may need to address B-BBEE requirements. The agreement provides security to all stakeholders by clearly defining support obligations, triggers, and enforcement mechanisms, while protecting both the company's and shareholders' interests.
Suggested Sections

1. Parties: Identification of all parties to the agreement, including the company and the supporting shareholders

2. Background: Context of the agreement, including the company's structure and reason for requiring shareholder support

3. Definitions and Interpretation: Detailed definitions of terms used in the agreement and rules of interpretation

4. Duration and Effectiveness: Term of the agreement and conditions for it coming into effect

5. Nature and Extent of Support: Detailed description of the support to be provided by shareholders, including financial and non-financial support

6. Support Obligations: Specific obligations of each supporting shareholder, including timing and conditions

7. Financial Support Mechanisms: Details of how financial support will be provided, including funding methods and limitations

8. Representations and Warranties: Statements of fact and assurances given by each party

9. Conditions Precedent: Any conditions that must be met before the agreement becomes effective

10. Reporting and Information Rights: Requirements for reporting on use of support and information sharing

11. Default and Remedies: Consequences of failing to provide agreed support and available remedies

12. Termination: Circumstances under which the agreement can be terminated and consequences

13. General Provisions: Standard legal provisions including notices, amendments, governing law, etc.

Optional Sections

1. B-BBEE Compliance: Required when the support arrangement needs to maintain or achieve specific B-BBEE levels

2. Security Arrangements: Include when support includes provision of security or guarantees

3. Step-In Rights: Include when supporting shareholders may need rights to take control in certain circumstances

4. Inter-creditor Provisions: Required when multiple parties are providing financial support with different priorities

5. Tax Provisions: Include detailed tax provisions when support arrangements have significant tax implications

6. Exchange Control Compliance: Required when foreign shareholders are involved or cross-border support is contemplated

7. Subordination Arrangements: Include when support involves subordination of certain shareholder rights or claims

Suggested Schedules

1. Details of Shareholders: Complete information about participating shareholders and their holdings

2. Support Commitments: Detailed breakdown of each shareholder's support commitments and limits

3. Financial Conditions: Specific financial metrics or conditions triggering support obligations

4. Form of Support Notice: Template for requesting support under the agreement

5. Compliance Certificates: Templates for periodic certification of compliance with obligations

6. Security Documents: Forms of security documents if security is part of the support arrangement

7. Required Regulatory Approvals: List of necessary regulatory approvals and their status

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

Relevant legal definitions














































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Relevant Industries

Mining and Resources

Infrastructure Development

Manufacturing

Financial Services

Technology and Telecommunications

Energy and Utilities

Real Estate and Property Development

Healthcare

Industrial Development

Transportation and Logistics

Retail and Consumer Goods

Agriculture and Agribusiness

Relevant Teams

Legal

Finance

Corporate Development

Treasury

Risk Management

Compliance

Company Secretariat

Corporate Finance

Board Secretariat

Investor Relations

Executive Management

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Director

Company Secretary

Corporate Finance Manager

Financial Director

General Counsel

Legal Counsel

Corporate Development Manager

Treasury Manager

Risk Manager

Compliance Officer

Investment Director

Corporate Finance Director

Shareholder Relations Manager

Board Director

Managing Director

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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