Founders Restricted Stock Purchase Agreement Template for United Arab Emirates

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Key Requirements PROMPT example:

Founders Restricted Stock Purchase Agreement

"I need a Founders Restricted Stock Purchase Agreement for our UAE-based technology startup, where three co-founders will each receive 20% ownership with a 4-year vesting schedule starting March 2025, including a 1-year cliff and standard transfer restrictions."

Document background

A Founders Restricted Stock Purchase Agreement is a crucial document used during company formation or early-stage operations in the UAE, when issuing equity to founding members of the company. This agreement, governed by UAE law, particularly Federal Law No. 32 of 2021 on Commercial Companies, establishes the terms under which founders purchase and hold restricted shares in the company. It typically includes provisions for share vesting schedules, transfer restrictions, company repurchase rights, and founder obligations. The document is essential for protecting the company's interests while providing founders with clear rights and responsibilities regarding their equity ownership. It's particularly important in the UAE context where share transfer restrictions and foreign ownership considerations must be carefully addressed to ensure compliance with local regulations.

Suggested Sections

1. Parties: Identification of the Company and the Purchasing Founder(s)

2. Background: Context of the agreement, including company formation and purpose of the stock purchase

3. Definitions and Interpretation: Key terms used throughout the agreement and rules of interpretation

4. Purchase and Sale of Shares: Core terms of the stock purchase, including number of shares, purchase price, and payment terms

5. Vesting Provisions: Schedule and terms for share vesting, including vesting period, milestones, and acceleration events

6. Transfer Restrictions: Limitations on the founder's ability to transfer shares, including lock-up period and right of first refusal

7. Founder Representations and Warranties: Founder's confirmations regarding capacity, understanding, and compliance with law

8. Company Representations and Warranties: Company's confirmations regarding authority, share issuance, and compliance

9. Confidentiality: Obligations to maintain confidentiality of company information

10. Non-Competition and Non-Solicitation: Restrictions on founder's competitive activities and employee solicitation

11. Company's Repurchase Rights: Terms under which company can repurchase shares, including upon termination

12. Tax Matters: Tax obligations and responsibilities of parties

13. Governing Law and Jurisdiction: UAE law as governing law and jurisdiction for disputes

14. General Provisions: Standard boilerplate provisions including notices, amendments, and severability

Optional Sections

1. Drag-Along Rights: Include when majority shareholders need the right to force minority shareholders to join in sale of company

2. Tag-Along Rights: Include when minority shareholders need the right to join in sale of shares by majority shareholders

3. Board Matters: Include when founder is to serve on board of directors

4. Intellectual Property Assignment: Include when separate IP assignment is not executed

5. Spouse Consent: Include when required by personal status or property ownership considerations

6. Free Zone Specific Provisions: Include when company is established in UAE free zone

7. Shareholder Agreement Integration: Include when agreement needs to reference or integrate with separate shareholder agreement

Suggested Schedules

1. Schedule 1 - Share Details: Details of shares being purchased, including class, number, and nominal value

2. Schedule 2 - Vesting Schedule: Detailed timetable and conditions for share vesting

3. Schedule 3 - Form of Share Certificate: Template for physical share certificates if required

4. Schedule 4 - Deed of Adherence: Form for additional parties to join the agreement

5. Schedule 5 - Company Information: Key company details including registration, capital structure, and existing shareholders

6. Appendix A - Definitions: Detailed definitions of terms used in the agreement

7. Appendix B - Share Transfer Forms: Template forms for executing share transfers

8. Appendix C - Board Resolutions: Required board approvals for share issuance and transfer

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

alex.den.21@genieai.co

Relevant legal definitions

Clauses

Relevant Industries

Technology

E-commerce

Financial Services

Healthcare

Education

Real Estate

Manufacturing

Professional Services

Media and Entertainment

Retail

Telecommunications

Energy

Transportation

Hospitality

Construction

Relevant Teams

Legal

Finance

Executive Leadership

Corporate Governance

Compliance

Human Resources

Corporate Development

Company Secretariat

Board of Directors

Relevant Roles

CEO

Founder

Co-Founder

Chief Legal Officer

General Counsel

Corporate Secretary

Chief Financial Officer

Legal Director

Corporate Lawyer

Company Director

Board Member

Chief Operating Officer

VP of Legal

Legal Manager

Compliance Officer

Investment Manager

Corporate Governance Officer

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Let's create your Founders Restricted Stock Purchase Agreement

Authors

Alex Denne

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