Stock Swap Agreement for United Arab Emirates

Stock Swap Agreement Template for United Arab Emirates

A comprehensive legal agreement governed by UAE law that facilitates the exchange of shares between two or more parties. This document outlines the terms and conditions for swapping shares, including exchange ratios, representations and warranties, regulatory compliance requirements under UAE securities laws, and closing conditions. It incorporates specific provisions to comply with UAE Companies Law, SCA regulations, and foreign ownership restrictions, while addressing tax implications and economic substance requirements applicable in the UAE jurisdiction.

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What is a Stock Swap Agreement?

A Stock Swap Agreement is a crucial document used in corporate restructuring, strategic investments, and business combinations in the UAE. This agreement type is particularly relevant when companies wish to exchange ownership interests without cash consideration, subject to UAE Federal Law No. 32 of 2021 (Companies Law) and SCA regulations. The document typically includes detailed provisions on share valuation, exchange mechanics, regulatory approvals, and compliance with UAE foreign ownership restrictions. Stock Swap Agreements are commonly used in joint ventures, strategic alliances, and corporate reorganizations, requiring careful consideration of UAE securities laws, tax implications, and economic substance requirements. The agreement must address specific UAE regulatory requirements, including SCA approvals for listed companies and foreign ownership restrictions in certain sectors.

What sections should be included in a Stock Swap Agreement?

1. Parties: Identification of the parties entering into the stock swap agreement

2. Background: Context of the transaction and relationship between the parties

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

4. Exchange of Shares: Core terms of the stock swap including share quantities, exchange ratios, and mechanics

5. Closing: Conditions precedent, closing mechanics, and timing

6. Representations and Warranties: Statements of fact and assurances from each party regarding their authority, shares, and company status

7. Covenants: Ongoing obligations of the parties before and after closing

8. Regulatory Compliance: Compliance with UAE laws, including SCA regulations and foreign ownership restrictions

9. Tax Matters: Treatment of taxes arising from the transaction

10. Termination: Circumstances under which the agreement may be terminated

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

12. General Provisions: Standard boilerplate provisions including notices, amendments, and assignment

What sections are optional to include in a Stock Swap Agreement?

1. Share Transfer Restrictions: Additional restrictions on transfer of shares, used when parties want to impose specific limitations

2. Board Composition: Provisions regarding changes to board composition, used when the swap results in significant ownership changes

3. Non-Competition: Restrictions on competitive activities, used when parties are competitors

4. Integration Plan: Details of post-closing integration, used in strategic combinations

5. Employee Matters: Provisions regarding treatment of employees, used when swap affects employment arrangements

6. Intellectual Property: Special provisions for IP rights, used when IP is a significant consideration

7. Shareholder Rights: Special rights granted to shareholders, used in strategic investments

What schedules should be included in a Stock Swap Agreement?

1. Schedule 1 - Share Details: Detailed description of shares being exchanged, including class, rights, and current ownership

2. Schedule 2 - Exchange Ratio Calculation: Detailed methodology for calculating the exchange ratio

3. Schedule 3 - Closing Deliverables: List of documents and items to be delivered at closing

4. Schedule 4 - Company Information: Detailed information about each company involved in the swap

5. Schedule 5 - Required Consents: List of required regulatory and third-party consents

6. Appendix A - Form of Share Transfer Instruments: Template documents for effecting the share transfers

7. Appendix B - Corporate Resolutions: Form of corporate approvals required for the transaction

8. Appendix C - Regulatory Filings: Forms and documents required for UAE regulatory compliance

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Publisher

Genie AI

Cost

Free to use
Clauses
Relevant Industries

Financial Services

Technology

Real Estate

Manufacturing

Healthcare

Retail

Energy

Transportation

Telecommunications

Professional Services

Media and Entertainment

Construction

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Compliance

Treasury

Corporate Finance

Company Secretariat

Board of Directors

Executive Management

Tax

Investment

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Chief Legal Officer

Corporate Development Director

Investment Director

Legal Counsel

Corporate Secretary

Finance Director

Mergers & Acquisitions Manager

Compliance Officer

Board Director

Investment Manager

Treasury Manager

Corporate Finance 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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