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Shareholder Exit Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Shareholder Exit Agreement

"I need a Shareholder Exit Agreement for a UAE technology company where a minority shareholder holding 15% shares is voluntarily exiting by March 2025, with payment to be made in three installments over 12 months."

Document background
The Shareholder Exit Agreement is a crucial document used when a shareholder wishes to or is required to exit their ownership position in a UAE company. This agreement becomes necessary in various scenarios, including voluntary exits, forced exits, retirement, or strategic divestments. It must comply with UAE Federal Law No. 32 of 2021 and other relevant regulations, including specific free zone requirements where applicable. The document typically covers share valuation methodology, payment terms, representations and warranties, non-compete provisions, and post-exit obligations. It's particularly important in the UAE context where foreign ownership restrictions and local sponsor requirements may need to be considered. The agreement serves to protect all parties' interests while ensuring a smooth transition of ownership and maintaining business continuity.
Suggested Sections

1. Parties: Identification of all parties to the agreement, including the exiting shareholder(s), remaining shareholders, and the company

2. Background: Context of the agreement, including current shareholding structure and reason for exit

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

4. Exit Process: Detailed procedure for implementing the exit, including timelines and mechanisms

5. Valuation: Method of determining the value of shares and payment terms

6. Representations and Warranties: Standard representations and warranties from all parties, including title to shares

7. Confidentiality: Obligations regarding confidential information and announcement restrictions

8. Non-Compete and Non-Solicitation: Restrictions on the exiting shareholder's future business activities

9. Tax Matters: Allocation of tax liabilities and responsibilities

10. Notices: Process for serving notices under the agreement

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

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

Optional Sections

1. IPO Provisions: Include when there's a possibility of an IPO, covering pre-IPO restructuring and obligations

2. Tag-Along Rights: Include when other shareholders should have the right to join the exit on same terms

3. Drag-Along Rights: Include when majority shareholders need the right to force minority shareholders to join the exit

4. Earn-Out Provisions: Include when part of the exit payment is contingent on future performance

5. Islamic Finance Compliance: Include when the transaction needs to comply with Sharia principles

6. Employee Matters: Include when the exiting shareholder has management or employment roles

7. Intellectual Property Rights: Include when IP ownership or licensing needs to be addressed post-exit

Suggested Schedules

1. Schedule 1 - Share Details: Details of shares being transferred, including class, number, and nominal value

2. Schedule 2 - Completion Requirements: Checklist of documents and actions required for completion

3. Schedule 3 - Valuation Methodology: Detailed explanation of share valuation method and calculations

4. Schedule 4 - Payment Terms: Detailed payment schedule and mechanisms

5. Schedule 5 - Company Information: Key company information including assets, liabilities, and material contracts

6. Appendix A - Board Resolutions: Required board resolutions approving the exit

7. Appendix B - Regulatory Approvals: List of required regulatory approvals and status

8. Appendix C - Form of Resignation Letters: Template resignation letters for exiting shareholder from official positions

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

Manufacturing

Professional Services

Retail

Healthcare

Financial Services

Construction

Hospitality

Energy

Transportation

Media and Entertainment

Education

Telecommunications

Relevant Teams

Legal

Finance

Corporate Governance

Compliance

Risk Management

Board Secretariat

Corporate Affairs

Investor Relations

Business Development

Executive Leadership

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Secretary

Managing Director

Board Member

Compliance Officer

Finance Director

Investment Manager

Corporate Governance Officer

Risk Manager

Business Development Director

Company Secretary

Shareholder Relations Manager

General Counsel

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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