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Equity Distribution Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Equity Distribution Agreement

"I need an Equity Distribution Agreement for my UAE-based technology startup to distribute 25% of company shares to new investors, including foreign institutional investors, with completion targeted for March 2025 and ensuring compliance with UAE foreign ownership restrictions."

Document background
The Equity Distribution Agreement is a crucial document used when a company seeks to distribute or redistribute its equity shares in the United Arab Emirates. This agreement is particularly important in the UAE context due to specific regulatory requirements, including foreign ownership restrictions and compliance with Federal Law No. 2 of 2015 (Companies Law) and Federal Law No. 32 of 2021 (Commercial Companies Law). The document is typically used during capital raising, corporate restructuring, or implementation of employee share schemes. It details share allocation methods, pricing mechanisms, transfer procedures, and necessary regulatory approvals. The agreement must account for UAE-specific considerations such as free zone regulations where applicable, local ownership requirements, and Central Bank regulations regarding share transfer payments.
Suggested Sections

1. Parties: Identification of all parties to the agreement, including full legal names and registration details

2. Background: Context of the agreement, including company details and purpose of the equity distribution

3. Definitions and Interpretation: Defined terms and interpretation rules used throughout the agreement

4. Appointment and Scope: Terms of appointment of distributor and scope of distribution rights

5. Equity Allocation: Details of equity shares to be distributed, including class, quantity, and value

6. Distribution Terms: Terms and conditions governing the distribution of equity, including timing and methods

7. Pricing and Payment: Share price determination, payment terms, and currency considerations

8. Regulatory Compliance: Compliance requirements under UAE law, including foreign ownership restrictions

9. Representations and Warranties: Statements of fact and assurances from all parties

10. Due Diligence: Requirements for due diligence and documentation

11. Transfer Restrictions: Limitations and conditions on share transfers

12. Term and Termination: Duration of agreement and termination provisions

13. Confidentiality: Protection of confidential information

14. Governing Law and Jurisdiction: UAE law as governing law and jurisdiction provisions

15. Notices: Communication procedures between parties

16. General Provisions: Standard boilerplate clauses including severability, entire agreement, etc.

Optional Sections

1. Foreign Ownership Provisions: Required when distributor includes foreign investors, detailing compliance with UAE foreign ownership restrictions

2. Free Zone Provisions: Required when the company operates in a UAE free zone, including specific free zone requirements

3. Tag-Along Rights: Optional protection for minority shareholders to join in sale of shares

4. Drag-Along Rights: Optional right of majority shareholders to force minority shareholders to join in sale

5. Pre-emptive Rights: Optional right of existing shareholders to maintain ownership percentage in new share issues

6. Anti-dilution Protection: Optional protection against equity dilution in future rounds

7. Board Representation: Optional provisions for board seats based on equity ownership

8. Digital Trading Provisions: Required when shares will be traded on digital platforms

Suggested Schedules

1. Schedule 1 - Share Capital Structure: Detailed breakdown of company's share capital structure

2. Schedule 2 - Distribution Schedule: Timeline and milestones for equity distribution

3. Schedule 3 - Pricing Mechanism: Detailed methodology for share price calculation

4. Schedule 4 - Required Approvals: List of regulatory and corporate approvals required

5. Schedule 5 - Transfer Procedures: Detailed procedures for executing share transfers

6. Schedule 6 - Required Documents: List of documents required for share transfers

7. Appendix A - Shareholder Information: Details of existing and new shareholders

8. Appendix B - Company Information: Corporate documents and certificates

9. Appendix C - Compliance Checklist: Regulatory compliance requirements checklist

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

Financial Services

Investment Banking

Private Equity

Technology

Real Estate

Manufacturing

Healthcare

Retail

Energy

Telecommunications

Professional Services

Construction

Education

Transportation

Hospitality

Relevant Teams

Legal

Finance

Compliance

Corporate Governance

Investment

Risk Management

Corporate Affairs

Treasury

Executive Leadership

Board of Directors

Shareholder Relations

Business Development

Regulatory Affairs

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Secretary

Investment Manager

Compliance Officer

Financial Director

Business Development Director

Managing Partner

Board Member

Shareholder Relations Manager

Investment Banker

Private Equity Manager

Corporate Governance Officer

Risk Management Officer

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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