The Convertible Loan Agreement Template is designed for use in the United Arab Emirates when a company seeks to raise capital through a loan that can later be converted into equity shares. This financing instrument is particularly popular among growth-stage companies and startups in the UAE ecosystem, offering flexibility to both investors and companies. The template incorporates all necessary elements required under UAE Federal Law No. 32 of 2021 (Commercial Companies Law) and related regulations, including provisions for interest/profit calculation, conversion triggers, and share issuance procedures. It addresses specific UAE requirements regarding foreign ownership, corporate governance, and optional Sharia compliance. The document is structured to protect both lender and borrower interests while ensuring enforceability under UAE law.
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Your data doesn't train Genie's AI
You keep IP ownership of your docs
Alternatively...
1. Parties: Identification of the Lender and Borrower (Company), including full legal names, registration details, and addresses
2. Background: Context of the agreement, including company's business, purpose of the loan, and basic transaction structure
3. Definitions and Interpretation: Key terms used throughout the agreement, including Conversion Price, Conversion Rights, Qualifying Event, etc.
4. Loan Amount and Disbursement: Details of the loan amount, disbursement conditions, and drawdown procedures
5. Interest/Profit Rate: Specification of interest/profit rate, calculation method, and payment schedule, ensuring Sharia compliance if required
6. Conversion Mechanism: Terms and conditions for converting the loan into shares, including trigger events and conversion price calculation
7. Conversion Procedure: Step-by-step process for executing the conversion, including notices, timing, and documentation requirements
8. Representations and Warranties: Standard and specific warranties from both parties, including company's authority to issue shares upon conversion
9. Covenants: Ongoing obligations of the borrower, including information rights and operational restrictions
10. Events of Default: Circumstances constituting default and consequences, including acceleration rights
11. Termination: Circumstances and procedures for terminating the agreement
12. Confidentiality: Obligations regarding confidential information and announcements
13. Notices: Communication procedures and contact details for formal notices
14. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for disputes
1. Security: Include when the loan is secured by company assets or third-party guarantees
2. Anti-dilution Provisions: Include for protection against share dilution before conversion, particularly relevant for startups
3. Tag-Along Rights: Include when lender requires right to participate in sale of shares by major shareholders
4. Board Observer Rights: Include when lender requires right to appoint observer to company's board meetings
5. Islamic Finance Provisions: Include when agreement needs to be Sharia-compliant, restructuring interest as profit sharing
6. Foreign Investment Provisions: Include when lender is foreign entity, addressing UAE foreign ownership restrictions
1. Schedule 1: Form of Conversion Notice: Template notice for exercising conversion rights
2. Schedule 2: Conditions Precedent: List of documents and conditions required before loan disbursement
3. Schedule 3: Calculation of Conversion Price: Detailed formula and examples for calculating conversion price
4. Schedule 4: Warranties: Detailed list of company warranties
5. Schedule 5: Company Information: Key company details including capitalization table and corporate structure
6. Appendix A: Shareholders' Resolution: Pro-forma shareholders' resolution approving share issuance upon conversion
7. Appendix B: Board Resolution: Pro-forma board resolution approving loan and potential conversion
Is a Convertible Loan Agreement legally binding in the United Arab Emirates?
Yes, a properly executed Convertible Loan Agreement is legally binding in the UAE under Federal Law No. 5 of 1985 (Civil Transactions Law). The agreement must comply with UAE Commercial Companies Law No. 32 of 2021, particularly regarding share conversion mechanisms and foreign ownership restrictions. All parties must have legal capacity to enter into the agreement and the terms must not violate UAE public policy or Sharia principles.
Do I need a lawyer to draft a Convertible Loan Agreement in UAE?
While not legally mandatory, engaging a UAE-qualified lawyer is highly recommended for Convertible Loan Agreements due to their complexity. These agreements involve both debt and equity components that must comply with UAE Commercial Companies Law and foreign investment regulations. A lawyer ensures proper structuring of conversion terms, compliance with UAE Central Bank regulations if applicable, and protection of your legal interests.
How does a Convertible Loan Agreement differ from a regular loan agreement in UAE?
A Convertible Loan Agreement includes an option to convert debt into company shares, while a regular loan agreement only involves repayment of principal and interest. Under UAE Commercial Companies Law No. 32 of 2021, convertible loans require additional provisions for share issuance, valuation methods, and compliance with foreign ownership limits. The conversion feature also triggers different regulatory requirements and potential Central Bank approvals depending on the company structure.
Authors
Find the document you need
Vendor Finance Loan Agreement
An Australian-law governed template agreement for vendor financing arrangements, incorporating security interests and compliance with local credit legislation.
Download
Private Lender Contract
An Australian-law governed agreement establishing terms and conditions for private lending arrangements, including loan details, security, and compliance with national lending regulations.
Download
OverLoan Agreement
An Australian-law governed agreement establishing an overdraft facility between a financial institution and borrower, detailing credit limits, terms, and obligations under Australian banking regulations.
Download
Fixed Sum Loan Agreement Early Settlement
An Australian-compliant loan agreement template for fixed sum loans with early settlement provisions, meeting National Consumer Credit Protection Act requirements.
Download
Facility Agreement Loan
An Australian law-governed agreement setting out terms and conditions for the provision of loan facilities between lenders and borrowers, including key financial and operational terms.
Download
Employee Loan Agreement Interest
An Australian-compliant interest-free loan agreement between employer and employee, including repayment terms and FBT considerations.
Download
Employee Computer Loan Agreement
An Australian law agreement governing the loan of computer equipment from employer to employee, establishing terms, conditions, and mutual obligations.
Download
Contract To Take Over Car Payments
An Australian legal agreement for transferring car payment obligations from one borrower to another, compliant with national consumer credit laws.
Download
Auto Loan Promissory Note
An Australian-compliant template for vehicle loan agreements that establishes loan terms, security interests, and obligations under national consumer credit laws.
Download
Acknowledgement Of Debt Agreement
An Australian-compliant legal document where a debtor formally acknowledges their debt and agrees to specific repayment terms under Australian law.
Download
Personal Loan To Business Agreement
An Australian-law governed agreement between an individual lender and a business borrower, establishing terms and conditions for a business loan.
Download
Loan Agreement Between Family Members
An Australian-compliant legal agreement that formalizes and documents loan arrangements between family members, including terms, conditions, and repayment schedules.
Download
Standard Mortgage Agreement
An Australian-law governed agreement establishing the terms and security arrangements for a mortgage loan secured against real property.
Download
Director Loan To Company Agreement
An Australian law-governed agreement documenting the terms and conditions of a loan provided by a director to their company, ensuring regulatory compliance and protecting both parties' interests.
Download
Simple Promissory Note For Family Loan
An Australian legal document that formalizes and documents the terms of a monetary loan between family members, providing legal protection while maintaining familial considerations.
Download
Simple Intercompany Loan Agreement
An Australian law template for documenting loan arrangements between related companies within the same corporate group.
Download
Loan Agreement Between Companies
Australian corporate loan agreement template for inter-company lending, compliant with Australian corporate and financial services laws.
Download
Loan Agreement Between Two Individuals
An Australian-compliant loan agreement template for personal lending between individuals, establishing terms, conditions, and obligations for both parties.
Download
Home Equity Loan Agreement
Australian-compliant Home Equity Loan Agreement Template establishing terms for property equity-secured lending, including mandatory consumer protection provisions.
Download
Demand Loan
Australian-compliant demand loan agreement template allowing lenders to call for repayment at any time, suitable for both consumer and business lending.
Download
Construction Loan Contract
An Australian legal agreement for progressive funding of construction projects, governing both financial and construction aspects under Australian federal and state laws.
Download
Commercial Real Estate Loan Term Sheet
Australian-compliant template outlining key terms and conditions for commercial real estate loan facilities.
Download
Balloon Loan Agreement
An Australian-compliant loan agreement template featuring regular payments and a final balloon payment, structured according to Australian financial and consumer protection laws.
Download
Employer Paid Training Agreement
An Australian legal agreement establishing terms for employer-funded professional training, including financial commitments and employee obligations.
Download
Debt Payment Agreement
An Australian-compliant template for structuring and documenting debt repayment arrangements between creditors and debtors, incorporating all essential legal and practical provisions.
Download
Inter Lender Agreement
An Australian law-governed agreement establishing rights, priorities, and relationships between multiple lenders in a financing arrangement.
Download
Hand Loan Agreement
An Australian-compliant agreement documenting the terms and conditions of a personal or small business loan between parties, including loan amount, interest, and repayment terms.
Download
Flexi Finance Loan Agreement
An Australian-compliant flexible finance agreement establishing a revolving credit facility with variable drawdown and repayment terms.
Download
Employee Forgivable Loan Agreement
Download
Employee Equipment Loan Agreement
Download
Employee Cash Advance Agreement
Download
Subordinated Loan Agreement
Australian law template for subordinated loan arrangements, establishing terms for junior-ranking debt with comprehensive creditor provisions.
Download
Forgivable Loan Agreement
Download
Device Loan Agreement
Download
Debt To Equity Conversion Agreement
Download
Credit Terms Agreement
An Australian-compliant template for establishing credit arrangements between providers and customers, incorporating all necessary legal and regulatory requirements.
Download
Borrowing Form
Download
Assignment Of Loan Agreement
Australian-compliant template for transferring loan rights and obligations from one lender to another, suitable for various types of loan assignments under Australian law.
Download
Assignment Of Debt Agreement
Download
Agreement Between Two Persons For Money
An Australian law-governed agreement formalizing financial arrangements between two individuals, including payment terms and obligations.
Download
Genie’s Security Promise
Genie is the safest place to draft. Here’s how we prioritise your privacy and security.
Your data is private:
We do not train on your data; Genie’s AI improves independently
All data stored on Genie is private to your organisation
Your documents are protected:
Your documents are protected by ultra-secure 256-bit encryption
We are ISO27001 certified, so your data is secure
Organizational security:
You retain IP ownership of your documents and their information
You have full control over your data and who gets to see it
