Stop Transfer Instruction; Legends Clause Samples
The "Stop Transfer Instruction; Legends" clause serves to restrict the transfer of certain securities by instructing the issuer or its transfer agent not to process unauthorized transfers. In practice, this is often implemented by placing a stop transfer order on the issuer’s books and by marking the physical or electronic certificates with legends that indicate the securities are subject to specific restrictions, such as regulatory holding periods or contractual limitations. This clause ensures that securities are not transferred in violation of applicable laws or agreements, thereby protecting the issuer and maintaining compliance with relevant regulations.
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Stop Transfer Instruction; Legends. (a) Promptly following the date hereof, the Stockholder shall cause the Company to deliver written instructions to the Company’s transfer agent stating that the Shares may not be sold, transferred, pledged, encumbered, assigned, distributed, given as a gift or otherwise disposed of during the term of this Agreement without the prior written consent of Parent, except as otherwise provided in Section 1.1.
(b) Promptly following the date hereof, each Stockholder shall cause the Company to instruct its transfer agent to place a legend on the certificates (to the extent the shares are certificated) representing the Existing Shares and on any other securities acquired by the Stockholder after the date hereof as follows: “The Securities represented by this certificate are subject to restrictions on transfer and may not be sold, transferred, pledged, encumbered, assigned, distributed, given as a gift or otherwise disposed of except in accordance with and subject to the terms and conditions of the Stockholder Support Agreement, dated June 23, 2008, between the registered holder hereof and ▇▇▇▇▇▇▇ Laboratories, Inc.”
(c) The parties hereto agree that the legend set forth above shall be removed and the restrictions set forth in the legend above shall be of no further force and effect, in each case, upon termination of this Agreement in accordance with Section 4.1 hereof.