Transfer Restrictions Clause Example from Business Contracts

Transfer Restrictions. (a) Restriction on Transfer. Except for any Permitted Transfer, (i) Participant shall not transfer, assign, encumber or otherwise dispose of any of the Unvested Shares and (ii) Participant shall not transfer, assign, encumber or otherwise dispose of any of the Vested Shares in contravention of the First Refusal Right, the Market Stand-Off or the transfer restrictions set forth in Section 2. (b) Transferee Obligations. Each person (other than the Corporation) to whom the Awarded Shares are transf...erred by means of a Permitted Transfer must, as a condition precedent to the validity of such transfer, acknowledge in writing to the Corporation that such person is bound by the provisions of this Agreement and that the transferred shares are subject to (i) the Repurchase Right, (ii) the First Refusal Right, (iii) the Market Stand-Off and (iv) the transfer restrictions set forth in Section 2, to the same extent such shares would be so subject if retained by Participant. (c) Market Stand-Off. (i) In connection with the Corporation's Initial Public Offering and any underwritten public offering by the Corporation of its equity securities pursuant to an effective registration statement filed under the 1933 Act that is declared effective within two years after the effective date of the Corporation's Initial Public Offering, Owner shall, if requested by either the Corporation or the underwriters, enter into a lock-up agreement in a customary form, for a customary duration and with customary carve-outs for any dispositions to the Corporation for the purpose of satisfying any tax withholding liabilities in connection with the Awarded Shares, pursuant to which Owner shall not sell, make any short sale of, hedge with, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or otherwise agree to engage in any of the foregoing transactions with respect to, any Awarded Shares without the prior 3 written consent of the Corporation or its underwriter, as applicable (the "Market Stand-Off"). The Market Stand-Off shall be in effect for such customary period of time from and after the effective date of the final prospectus for the offering as may be requested by the Corporation or such underwriters, provided that the Market Stand-Off for the Corporation's Initial Public Offering shall not extend beyond the date immediately prior to the date specified in Section 4(c)(i). (ii) Any new, substituted or additional securities that are by reason of any Recapitalization or Reorganization distributed with respect to Awarded Shares shall be immediately subject to the Market Stand-Off. (iii) In order to enforce the Market Stand-Off, the Corporation may impose stop-transfer instructions with respect to Awarded Shares until the end of the applicable stand-off period. In addition, the foregoing covenant may be enforced by the underwriters who are parties with the Corporation to an underwriting agreement under which such public offering is being undertaken. View More