The Restricted Share Purchase Agreement is a specialized legal document used in the UAE for transactions involving shares that carry specific transfer restrictions or limitations. This agreement is particularly relevant when companies wish to implement employee share schemes, maintain control over share ownership, or comply with UAE foreign ownership restrictions. The document is structured to comply with UAE Companies Law (Federal Law No. 32 of 2021) and related regulations, incorporating necessary provisions for share transfer mechanics, regulatory approvals, and specific restrictions on future transfers. It is commonly used in private companies, family businesses, and companies with employee share ownership programs, providing a comprehensive framework for the transfer of restricted shares while ensuring compliance with local laws and protecting the interests of all parties involved.
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1. Parties: Identification of the seller, purchaser, and company whose shares are being sold
2. Background: Context of the transaction, including company details and reason for the share transfer
3. Definitions and Interpretation: Key terms used throughout the agreement and rules for interpretation
4. Sale and Purchase: Core transaction terms including number of shares, price, and payment terms
5. Conditions Precedent: Prerequisites that must be satisfied before completion
6. Completion: Timing, location, and mechanics of the transfer process
7. Transfer Restrictions: Details of restrictions on future transfers, including lock-up period and transfer procedures
8. Representations and Warranties: Statements of fact and assurances from both parties
9. Covenants: Ongoing obligations of the parties, including non-compete and confidentiality
10. Share Rights: Specific rights attached to the shares, including voting and dividend rights
11. Tag-Along and Drag-Along Rights: Mechanisms for future share transfers involving multiple shareholders
12. Termination: Circumstances under which the agreement can be terminated
13. Governing Law and Jurisdiction: UAE law as governing law and jurisdiction for disputes
14. Notices: Process for formal communications between parties
15. General Provisions: Standard boilerplate clauses including entire agreement, amendments, and severability
1. Management Rights: Used when the purchaser is to receive specific management or board representation rights
2. Employee Matters: Required when the share purchase involves employee shareholders or affects employment terms
3. Information Rights: Include when purchaser is to receive specific information access rights
4. Pre-emptive Rights: Optional rights for existing shareholders to participate in future share issues
5. UAE Compliance Provisions: Additional provisions for compliance with specific UAE regulations, particularly relevant for foreign investors
6. Tax Provisions: Specific tax-related provisions if the transaction has significant tax implications
7. Share Vesting Provisions: Include when shares are subject to vesting schedule, typically for employee share schemes
1. Share Details: Details of the shares being transferred, including class, rights, and current ownership
2. Conditions Precedent: Detailed list of all conditions that must be satisfied before completion
3. Completion Requirements: Detailed list of documents and actions required at completion
4. Warranties: Comprehensive list of warranties given by the seller
5. Company Information: Key details about the company, including corporate structure and financial information
6. Transfer Restrictions: Detailed mechanics of transfer restrictions and procedures
7. Shareholders' Rights: Detailed description of rights attached to different share classes
8. Form of Share Transfer Instrument: Template for the formal share transfer documentation
9. Required Regulatory Approvals: List of necessary UAE regulatory approvals and requirements
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