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Debt Transfer Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Debt Transfer Agreement

"I need a Debt Transfer Agreement under UAE law for transferring a corporate debt of AED 5 million from our subsidiary to our parent company, with the transfer to be completed by March 2025; the agreement needs to account for multiple existing creditors and current security arrangements."

Document background
The Debt Transfer Agreement is a crucial document used in the United Arab Emirates for transferring debt obligations between parties. It is particularly relevant in scenarios involving corporate restructuring, debt refinancing, or the assumption of obligations by a new entity. The agreement must comply with the UAE Civil Code (Federal Law No. 5 of 1985), particularly Articles 1106-1132 which govern the concept of hawala (debt transfer), as well as relevant Sharia principles. This document is essential when businesses or individuals need to reorganize their debt obligations, requiring careful consideration of the original debt terms, security arrangements, and the financial capacity of the new debtor. The agreement includes detailed provisions regarding the transfer mechanics, parties' obligations, conditions precedent, and any security arrangements, while ensuring compliance with UAE regulatory requirements and banking regulations where applicable.
Suggested Sections

1. Parties: Identification of all parties: the original debtor (transferor), the new debtor (transferee), and the creditor

2. Background: Context of the original debt and the reason for the transfer

3. Definitions: Definitions of key terms used in the agreement

4. Transfer of Debt: Core provisions detailing the debt being transferred and the terms of transfer

5. Consideration: Details of any consideration paid between the original debtor and new debtor

6. Representations and Warranties: Statements of fact and assurances from all parties regarding their capacity and the debt

7. Obligations of the Parties: Specific duties and responsibilities of each party before, during, and after the transfer

8. Effective Date and Conditions Precedent: When the transfer becomes effective and any conditions that must be met

9. Notices: How formal communications between parties should be made

10. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for disputes

11. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments

Optional Sections

1. Security Arrangements: Required when existing security needs to be transferred or new security is being provided

2. Sharia Compliance: Required when the agreement needs explicit confirmation of compliance with Sharia principles

3. Regulatory Compliance: Required when the transfer involves regulated entities or requires regulatory approvals

4. Tax Provisions: Required when there are specific tax implications that need to be addressed

5. Novation Provisions: Required when the transfer involves a complete novation rather than just a debt transfer

6. Third Party Consents: Required when the transfer requires approval from parties not directly involved in the transfer

7. Currency Provisions: Required when the debt transfer involves multiple currencies

Suggested Schedules

1. Schedule 1 - Details of the Original Debt: Detailed description of the debt being transferred, including amount, interest, and payment terms

2. Schedule 2 - Payment Schedule: Schedule of payments to be made by the new debtor

3. Schedule 3 - Security Details: Details of any security arrangements being transferred or created

4. Schedule 4 - Form of Notice to Creditor: Template for formal notification to the creditor of the transfer

5. Schedule 5 - Conditions Precedent Documents: List of documents required before the transfer becomes effective

6. Appendix A - Related Agreements: Copies or details of any related agreements referenced in the main agreement

7. Appendix B - Corporate Authorizations: Copies of relevant corporate approvals and authorizations

Authors

Alex Denne

Head of Growth (Open Source Law) @ ¶¶Òõ¶ÌÊÓƵ | 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

Banking & Financial Services

Real Estate

Construction

Manufacturing

Trading & Commerce

Healthcare

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Technology

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Insurance

Relevant Teams

Legal

Finance

Treasury

Risk Management

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Corporate Secretariat

Credit Control

Corporate Finance

Business Development

Mergers & Acquisitions

Relevant Roles

Chief Financial Officer

Finance Director

Legal Counsel

Corporate Lawyer

Finance Manager

Treasury Manager

Risk Manager

Compliance Officer

Company Secretary

Credit Manager

Debt Restructuring Specialist

Corporate Finance Manager

Financial Controller

Legal Director

Business Development Manager

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