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Restricted Share Purchase Agreement

Restricted Share Purchase Agreement Template for South Africa

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Key Requirements PROMPT example:

Restricted Share Purchase Agreement

"I need a Restricted Share Purchase Agreement for our employee share scheme, where we're selling 1000 restricted shares to senior management with a 3-year lock-in period starting March 2025, including tag-along rights and B-BBEE compliance provisions."

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Document background
The Restricted Share Purchase Agreement is a specialized legal instrument used in South African corporate transactions where shares are transferred subject to specific restrictions on their subsequent sale or transfer. This document is commonly used in employee share schemes, B-BBEE transactions, or strategic corporate arrangements where the company wishes to maintain control over share ownership and transfer. The agreement must comply with South African corporate law, particularly the Companies Act 71 of 2008 and Financial Markets Act 19 of 2012, while addressing specific requirements for restricted securities. It typically includes comprehensive provisions for share transfer mechanics, restriction periods, voting rights, dividend entitlements, and regulatory compliance. The document is particularly relevant for private companies implementing employee retention schemes or companies structuring strategic investments with lock-in periods.
Suggested Sections

1. Parties: Identification of the Seller, Purchaser and Company

2. Background: Context of the transaction, including details of the Company and reason for the share sale

3. Definitions and Interpretation: Definitions of key terms and interpretation rules

4. Sale and Purchase: Core transaction terms including number of shares, price, and payment terms

5. Conditions Precedent: Any conditions that must be met before the agreement becomes effective

6. Completion: Process and requirements for completing the share transfer

7. Share Restrictions: Details of restrictions on the shares, including transfer limitations and duration

8. Representations and Warranties: Standard warranties from both parties regarding capacity, authority, and share ownership

9. Regulatory Compliance: Compliance with South African laws including Companies Act and Financial Markets Act

10. Confidentiality: Provisions regarding confidential information and announcement restrictions

11. Breach and Termination: Consequences of breach and termination rights

12. General Provisions: Standard boilerplate clauses including notices, governing law, and jurisdiction

Optional Sections

1. Tag-Along Rights: Optional protection for minority shareholders, include if multiple shareholders exist

2. Drag-Along Rights: Optional mechanism for forcing minority shareholders to join in a sale, include if appropriate

3. B-BBEE Provisions: Include if the transaction affects B-BBEE status or compliance

4. Employee Matters: Include if shares are part of employee scheme or affect employment terms

5. Put and Call Options: Include if parties agree to future purchase/sale rights

6. Management Provisions: Include if the share purchase includes management rights or board representation

7. Competition Compliance: Include if transaction requires competition authority approval

8. Exchange Control: Include if transaction involves non-South African parties

Suggested Schedules

1. Share Details: Details of shares including class, rights, and restrictions

2. Purchase Price Calculation: Detailed methodology for calculating the purchase price

3. Completion Requirements: Detailed list of documents and actions required for completion

4. Warranties: Detailed warranties given by the parties

5. Company Information: Key company details including shareholding structure and financial information

6. Regulatory Approvals: List of required regulatory approvals and status

7. Transfer Forms: Pro forma share transfer documentation

8. Board Resolutions: Pro forma board resolutions approving the 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

Linkedin in social icon imageX social icon image
alex.den.21@genieai.co
Relevant legal definitions
Agreement
Authorizations
B-BBEE
Board
Business Day
Closing Date
Companies Act
Company
Completion
Conditions Precedent
Confidential Information
Consideration
CIPC
Disposal
Effective Date
Encumbrance
Financial Markets Act
Financial Year
Group
JSE
Lock-in Period
Material Adverse Change
MOI
Parties
Purchase Price
Purchaser
Regulatory Approvals
Restricted Period
Restricted Shares
SARB
Securities
Securities Register
Seller
Share Certificate
Shareholders Agreement
Shares
Signature Date
South African Reserve Bank
Subsidiary
Tax
Trading Day
Transaction
Transfer
Transfer Secretary
Warranties
Clauses
Definitions
Interpretation
Sale and Purchase
Purchase Price
Payment Terms
Share Restrictions
Transfer Restrictions
Lock-up Provisions
Conditions Precedent
Completion
Representations and Warranties
Regulatory Compliance
B-BBEE Compliance
Exchange Control
Securities Transfer
Confidentiality
Non-disclosure
Anti-dilution
Tag-along Rights
Drag-along Rights
Put and Call Options
Share Certificates
Board Approval
Shareholder Approval
Company Undertakings
Seller Undertakings
Purchaser Undertakings
Breach
Termination
Dispute Resolution
Governing Law
Jurisdiction
Force Majeure
Notices
Assignment
Costs
General Provisions
Entire Agreement
Amendment
Severability
Relevant Industries

Financial Services

Mining

Technology

Manufacturing

Retail

Professional Services

Healthcare

Telecommunications

Energy

Real Estate

Agriculture

Construction

Education

Transportation

Relevant Teams

Legal

Finance

Compliance

Corporate Secretariat

Human Resources

Executive Management

Investment

Risk Management

Corporate Development

Treasury

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Company Secretary

Legal Counsel

Corporate Lawyer

Financial Director

Head of Compliance

Investment Manager

HR Director

Corporate Finance Manager

Board Director

Managing Director

Equity Partner

Corporate Transaction Manager

Compliance Officer

Industries
Companies Act 71 of 2008: Primary legislation governing company operations, share capital, share transfers, and shareholder rights in South Africa
Financial Markets Act 19 of 2012: Regulates financial markets and securities trading, including restrictions on share transfers and trading
Income Tax Act 58 of 1962: Governs the tax implications of share transfers, including capital gains tax and securities transfer tax considerations
Securities Transfer Tax Act 25 of 2007: Specifically deals with the tax implications of transferring securities, including shares
Exchange Control Regulations: Regulates cross-border financial transactions and foreign ownership of South African shares
Financial Advisory and Intermediary Services Act 37 of 2002: Relevant if the share purchase involves financial advisors or intermediaries
Broad-Based Black Economic Empowerment Act 53 of 2003: May be relevant if the share purchase agreement is part of a B-BBEE transaction
Protection of Personal Information Act 4 of 2013: Governs the processing of personal information in contractual relationships
Teams

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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