Restrictions on Transfer Clause Example from Business Contracts

Restrictions on Transfer. 4.1. Securities Law Restrictions. In addition to the restrictions set forth in Section 4, Director shall not sell, transfer, pledge, hypothecate or dispose of all or any part of the Insider Shares prior to the date on which the Company completes its initial Business Combination. Notwithstanding the foregoing, Director may transfer the Insider Shares to Permitted Transferees as such term is defined in the Insider Letter (as defined below), provided that such Permitted Transferees must agree in wr...iting to be bound by this Section 4 and such Insider Shares remain subject to forfeiture as provided in Section 5. Director agrees not to sell, transfer, pledge, hypothecate or otherwise dispose of all or any part of the Insider Shares unless, prior thereto (a) a registration statement on the appropriate form under the Securities Act and applicable state securities laws with respect to the Insider Shares proposed to be transferred shall then be effective or (b) the Company has received an opinion from counsel reasonably satisfactory to the Company, that such registration is not required because such transaction is exempt from registration under the Securities Act and the rules promulgated by the Securities and Exchange Commission thereunder and with all applicable state securities laws. 2 4.2. Lock-ups. Director acknowledges that the Insider Shares will be subject to restrictions on transfer (the "Lock-ups") contained in that certain letter agreement (the "Insider Letter"), of even date herewith, by and between the Company, the undersigned and each other person who is, as of the date hereof, an executive officer, director or director nominee of the Company, which Insider Letter shall be substantially in the form to be filed as an exhibit to the Registration Statement. 4.3. Restrictive Legends. All certificates representing the Insider Shares shall have endorsed thereon legends substantially as follows: "THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL, IS AVAILABLE." "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO LOCK-UP PROVISIONS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED DURING THE TERM OF THE LOCKUP PERIOD. ANY TRANSFEREE SHALL BE SUBJECT TO THE RESTRICTIONS SET FORTH IN THE GRANT AGREEMENT." 4.4. Additional Insider Shares or Substituted Securities. In the event of the declaration of a stock dividend, the declaration of a special dividend payable in a form other than Common Stock, a spin-off, a stock split, an adjustment in conversion ratio, a recapitalization or a similar transaction affecting the Company's outstanding Common Stock without receipt of consideration, any new, substituted or additional securities or other property which are by reason of such transaction distributed with respect to any Insider Shares subject to Section 4 and Subsections 4.4-4.5, or into which such Insider Shares thereby become convertible shall immediately be subject to this Section 4. Appropriate adjustments to reflect the distribution of such securities or property shall be made to the number or class of Insider Shares subject to this Section 4. 4.5. Registration Rights. Director acknowledges that the Insider Shares are being acquired pursuant to an exemption from the registration requirements of the Securities Act and will become freely tradable only after certain conditions are met or they are registered pursuant to a Registration Rights Agreement to be entered into with the Company prior to the closing of the IPO. View More