Equity For Services Agreement Generator for United Arab Emirates

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Key Requirements PROMPT example:

Equity For Services Agreement

"I need an Equity For Services Agreement for my UAE-based technology startup to engage a senior software architect, offering 2% equity vesting over 3 years starting March 2025, with quarterly vesting and a one-year cliff period."

Document background
The Equity For Services Agreement is utilized when a company wishes to compensate a service provider with equity instead of, or in addition to, cash compensation. This arrangement is particularly common in growth-stage companies and startups operating in the UAE where cash conservation is important. The document must comply with UAE Federal Law No. 32 of 2021 (Commercial Companies Law) and related regulations, particularly regarding share issuance and transfer. It typically includes detailed provisions about service scope, equity vesting schedules, valuation methodologies, and corporate governance requirements. The agreement is especially relevant in situations where companies seek to align service providers' interests with long-term business success, while ensuring compliance with UAE's specific requirements regarding share ownership and transfer restrictions.
Suggested Sections

1. Parties: Identifies the contracting parties - typically the company issuing equity and the service provider

2. Background: Sets out the context of the agreement, including the company's need for services and the proposed equity compensation structure

3. Definitions: Defines key terms used throughout the agreement, including specific service-related terms and equity-related definitions

4. Services: Detailed description of the services to be provided, including scope, deliverables, and performance standards

5. Equity Compensation: Details of the equity to be issued, including amount, type of shares, and vesting schedule

6. Issuance and Transfer of Shares: Mechanics and process for issuing and transferring shares, including compliance with UAE Companies Law requirements

7. Representations and Warranties: Key statements and guarantees from both parties regarding their capacity, authority, and compliance

8. Service Provider's Obligations: Specific duties, commitments, and standards expected from the service provider

9. Company's Obligations: Company's commitments regarding equity issuance, support for services, and other obligations

10. Confidentiality: Provisions protecting confidential information exchanged during the service relationship

11. Intellectual Property: Ownership and rights regarding IP created during the service provision

12. Term and Termination: Duration of the agreement and circumstances under which it can be terminated

13. Governing Law and Jurisdiction: Specifies UAE law as governing law and defines jurisdiction for dispute resolution

Optional Sections

1. Non-Competition and Non-Solicitation: Restrictions on competitive activities and solicitation of employees/clients, optional based on service provider's role and access to sensitive information

2. Tag-Along Rights: Rights of the service provider to participate in future sale of shares, relevant for significant equity stakes

3. Drag-Along Rights: Company's right to force service provider to join in sale of shares, relevant for significant equity stakes

4. Board Representation: Rights to board representation, typically included only for substantial equity grants

5. Performance Metrics: Specific KPIs or metrics for service evaluation, needed when equity vesting is tied to performance

6. Dispute Resolution: Detailed dispute resolution procedures, optional if parties prefer to rely on standard court proceedings

7. Force Majeure: Provisions for unforeseen circumstances affecting service delivery, optional based on nature of services

Suggested Schedules

1. Schedule 1 - Service Scope and Deliverables: Detailed breakdown of services to be provided and specific deliverables

2. Schedule 2 - Equity Vesting Schedule: Detailed timeline and conditions for equity vesting

3. Schedule 3 - Share Valuation Methodology: Agreed method for valuing shares for various purposes under the agreement

4. Schedule 4 - Performance Criteria: Specific metrics or KPIs for evaluating service performance

5. Schedule 5 - Form of Share Certificate: Template for share certificates to be issued

6. Appendix A - Company's Corporate Documents: Relevant corporate documents including articles of association and shareholder agreements

7. Appendix B - Required Regulatory Approvals: List of necessary regulatory approvals for share issuance and transfer

8. Appendix C - Service Provider's Qualifications: Documentation of service provider's relevant qualifications and experience

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

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CEO

Founder

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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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