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Equity Contribution Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Equity Contribution Agreement

"I need an Equity Contribution Agreement under UAE law for a tech startup receiving a Series A investment of AED 10 million from a Saudi investment firm, with specific provisions for board representation and anti-dilution protection."

Document background
The Equity Contribution Agreement is a crucial document used in the UAE when an investor (either local or foreign) seeks to acquire an equity stake in a company through capital contribution. This agreement is particularly important in the UAE context due to specific regulatory requirements under Federal Law No. 32 of 2021 and foreign ownership restrictions. The document serves multiple purposes: it formalizes the investment terms, establishes the rights and obligations of all parties, ensures compliance with UAE corporate laws, and provides mechanisms for protecting the interests of both the investor and the company. It typically includes detailed provisions about the investment structure, valuation, conditions precedent, representations and warranties, and various shareholder rights. The agreement must be carefully drafted to comply with UAE law while meeting the commercial objectives of the transaction.
Suggested Sections

1. Parties: Identifies and defines all parties to the agreement

2. Background: Sets out the context and purpose of the agreement

3. Definitions and Interpretation: Defines key terms and establishes rules of interpretation

4. Equity Contribution: Details the amount, form, and timing of the equity contribution

5. Conditions Precedent: Specifies conditions that must be met before the contribution becomes effective

6. Closing Mechanics: Describes the process and requirements for completing the contribution

7. Representations and Warranties: Statements of fact and assurances from each party

8. Covenants: Ongoing obligations and commitments of the parties

9. Anti-dilution Protection: Provisions protecting the value of the investment

10. Regulatory Compliance: Ensures compliance with UAE laws and regulations

11. Confidentiality: Provisions regarding the treatment of confidential information

12. Notices: Procedures for formal communications between parties

13. Governing Law and Jurisdiction: Specifies UAE law as governing law and jurisdiction for disputes

14. General Provisions: Standard boilerplate clauses including amendments, waivers, and severability

Optional Sections

1. Tag-Along Rights: Optional protection for minority shareholders, used when there are multiple shareholders

2. Drag-Along Rights: Optional provision allowing majority shareholders to force minority shareholders to join in the sale of the company

3. Right of First Refusal: Optional provision giving existing shareholders priority rights to purchase shares before they can be sold to third parties

4. Board Representation: Optional provisions regarding the right to appoint board members, used when the contribution grants board rights

5. Additional Funding Commitments: Optional provisions regarding future funding rounds or capital calls

6. Exit Rights: Optional provisions detailing mechanisms for investor exit, including IPO or sale rights

7. Shareholder Approval Requirements: Optional detailed provisions about matters requiring shareholder approval, used for significant investments

Suggested Schedules

1. Schedule 1 - Shareholding Structure: Details of pre and post-contribution shareholding structure

2. Schedule 2 - Conditions Precedent: Detailed list of all conditions that must be satisfied

3. Schedule 3 - Closing Deliverables: List of all documents and actions required at closing

4. Schedule 4 - Form of Board Resolution: Template for required board resolutions

5. Schedule 5 - Form of Shareholders Resolution: Template for required shareholder resolutions

6. Schedule 6 - Warranties: Detailed list of representations and warranties

7. Appendix A - Company Information: Key details about the company including corporate information and licenses

8. Appendix B - Investment Details: Detailed breakdown of the investment structure and valuation

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





























































Clauses







































Relevant Industries

Technology

Real Estate

Healthcare

Financial Services

Manufacturing

Retail

Energy

Infrastructure

Transportation

Education

Hospitality

Professional Services

Media and Entertainment

Telecommunications

Relevant Teams

Legal

Finance

Corporate Development

Investment

Treasury

Compliance

Risk Management

Board of Directors

Company Secretariat

Strategy

Relevant Roles

Chief Executive Officer

Chief Financial Officer

General Counsel

Legal Director

Corporate Lawyer

Investment Manager

Business Development Director

Finance Director

Company Secretary

Board Director

Investment Analyst

Corporate Development Manager

Compliance Officer

Risk Manager

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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