The Debt To Equity Conversion Agreement Template is a crucial document used in corporate restructuring scenarios within the UAE legal framework. It is typically employed when a company seeks to improve its balance sheet by converting outstanding debt obligations into equity shares, effectively reducing its debt burden while providing creditors with ownership stakes. This template ensures compliance with UAE Federal Law No. 32 of 2021 and related regulations, including specific provisions for foreign ownership limits, free zone requirements, and Shariah compliance where applicable. The document comprehensively covers the conversion mechanism, valuation methodology, necessary regulatory approvals, and post-conversion shareholder rights. It's particularly relevant during financial restructuring, corporate reorganizations, or when implementing strategic investment arrangements in the UAE market.
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1. Parties: Identification of the debtor company, creditor(s), and any guarantors or other relevant parties
2. Background: Context of the existing debt, reason for conversion, and current corporate structure
3. Definitions: Key terms used throughout the agreement, including financial terms, corporate terminology, and UAE-specific regulatory references
4. Debt Acknowledgment: Formal acknowledgment of the existing debt amount, origin, and terms
5. Conversion Terms: Details of the conversion mechanism, including conversion ratio, share price calculation, and timing
6. Conditions Precedent: Prerequisites for the conversion, including corporate and regulatory approvals required under UAE law
7. Implementation of Conversion: Step-by-step process for executing the conversion, including share issuance and debt cancellation
8. Representations and Warranties: Standard and specific declarations by all parties regarding their capacity, authority, and compliance with UAE laws
9. Corporate Governance: Post-conversion management rights, board composition, and voting arrangements
10. Regulatory Compliance: Specific provisions ensuring compliance with UAE Companies Law and other relevant regulations
11. Completion Obligations: Actions required by each party to complete the conversion process
12. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for disputes
1. Islamic Finance Compliance: Required when the transaction needs to comply with Shariah principles
2. Free Zone Provisions: Required when the company operates within a UAE free zone
3. Foreign Ownership Provisions: Required when the conversion involves foreign investors
4. Anti-dilution Rights: Optional protection for existing shareholders
5. Tag-Along Rights: Optional inclusion for minority shareholder protection
6. Drag-Along Rights: Optional inclusion for majority shareholder protection
7. Exit Rights: Optional provisions regarding future sale or IPO scenarios
8. Management Rights: Optional detailed provisions about post-conversion management participation
1. Existing Debt Details: Detailed breakdown of the debt being converted, including principal, interest, and other charges
2. Conversion Calculations: Detailed methodology and calculations for the debt-to-equity conversion
3. New Shareholding Structure: Post-conversion shareholding details and share class rights
4. Corporate Approvals: Copies of board resolutions, shareholder approvals, and other corporate authorizations
5. Regulatory Approvals: Copies of required UAE regulatory approvals and licenses
6. Share Certificates: Form of new share certificates to be issued
7. Amended Articles of Association: Draft of the amended constitutional documents reflecting the new capital structure
8. Valuation Report: Independent valuation report supporting the conversion ratio
Relevant legal definitions
Agreement
Articles of Association
Board
Business Day
Companies Law
Company
Completion
Completion Date
Conversion Price
Conversion Ratio
Conversion Rights
Conversion Shares
Creditor
Debt Amount
Debt Instruments
Directors
Economic Department
Effective Date
Encumbrance
Existing Shareholders
Financial Year
Free Zone Authority
Governing Law
Interest Rate
Issued Share Capital
Liabilities
Maturity Date
New Shares
Ordinary Shares
Original Debt Agreement
Party
Principal Amount
Regulatory Approvals
Relevant Authority
Securities
Share Capital
Share Certificate
Shareholder Resolution
Shareholders Agreement
Shares
Subscription Price
UAE
UAE Central Bank
Valuation Report
Working Day
Articles of Association
Board
Business Day
Companies Law
Company
Completion
Completion Date
Conversion Price
Conversion Ratio
Conversion Rights
Conversion Shares
Creditor
Debt Amount
Debt Instruments
Directors
Economic Department
Effective Date
Encumbrance
Existing Shareholders
Financial Year
Free Zone Authority
Governing Law
Interest Rate
Issued Share Capital
Liabilities
Maturity Date
New Shares
Ordinary Shares
Original Debt Agreement
Party
Principal Amount
Regulatory Approvals
Relevant Authority
Securities
Share Capital
Share Certificate
Shareholder Resolution
Shareholders Agreement
Shares
Subscription Price
UAE
UAE Central Bank
Valuation Report
Working Day
Clauses
Definitions and Interpretation
Debt Acknowledgment
Conversion Mechanism
Conversion Price
Share Issuance
Conditions Precedent
Completion
Representations and Warranties
Corporate Authorization
Regulatory Compliance
Share Rights
Anti-dilution
Board Composition
Voting Rights
Transfer Restrictions
Pre-emptive Rights
Tag Along Rights
Drag Along Rights
Confidentiality
Assignment
Notices
Amendment
Severability
Waiver
Further Assurance
Costs and Expenses
Entire Agreement
Counterparts
Governing Law
Dispute Resolution
Debt Acknowledgment
Conversion Mechanism
Conversion Price
Share Issuance
Conditions Precedent
Completion
Representations and Warranties
Corporate Authorization
Regulatory Compliance
Share Rights
Anti-dilution
Board Composition
Voting Rights
Transfer Restrictions
Pre-emptive Rights
Tag Along Rights
Drag Along Rights
Confidentiality
Assignment
Notices
Amendment
Severability
Waiver
Further Assurance
Costs and Expenses
Entire Agreement
Counterparts
Governing Law
Dispute Resolution
Relevant Industries
Banking & Financial Services
Private Equity
Investment Banking
Corporate Finance
Real Estate & Construction
Manufacturing
Technology
Healthcare
Retail & Consumer
Energy & Resources
Professional Services
Hospitality & Tourism
Relevant Teams
Legal
Finance
Corporate Finance
Treasury
Compliance
Risk Management
Corporate Secretariat
Investment
Corporate Development
Restructuring
Relevant Roles
Chief Financial Officer
Finance Director
Legal Counsel
Corporate Lawyer
Investment Manager
Restructuring Officer
Company Secretary
Compliance Officer
Financial Controller
Chief Executive Officer
Investment Banker
Private Equity Manager
Risk Manager
Corporate Finance Manager
Treasury Manager
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