VESTING AGREEMENT

This Vesting Agreement (hereinafter referred to as the “Agreement”) is made on [INSERT DATE ON WHICH AGREEMENT COMES INTO FORCE] (hereinafter referred to as the “Effective Date”) between:

[INSERT THE NAME OF COMPANY], having registered office at [INSERT ADDRESS OF THE COMPANY] (hereinafter referred to as the “Company” which expression shall, unless repugnant to the context or meaning thereof, means and includes its legal representatives, executors, administrators and permitted assigns); and 

[INSERT NAME OF THE SHAREHOLDER], having registered office at [INSERT ADDRESS OF THE SHAREHOLDER] OR (hereinafter referred to as the “Shareholder” which expression shall, unless repugnant to the context or meaning thereof, means and includes its legal representatives, executors, administrators and permitted assigns).

The “Company” and the “Shareholder” together shall be referred to as “Parties” and individually as a “Party”.

WHEREAS:

1. The Shareholder holds [INSERT NUMBER OF SHARES] shares of capital stock of the Company.
2. The Company intends to sell shares of the preferred stock to outside investors and Investors require as a condition to such transaction that the Company accept certain vesting restrictions with respect to the Shares as set forth herein;
3. The Parties mutually agree to the terms and conditions outlined in this Agreement, which governs the working relationship between the parties.
4. The parties are duly authorized and have the capacity to enter into this agreement.
5. Both the parties affirm to understand the provisions contained herein and in case either party requires clarification as to one or more provisions, either party has had the right to seek clarifications or sought legal guidance.

NOW, THEREFORE, in consideration of the mutual promises contained herein and intending to, be legally bound, the Parties have agreed as follows:

1. DEFINITIONS
   1. “Shareholder” shall mean an individual, who has shares of the Company.
   2. “Capital stock” shall mean total amount of equity securities, both common and preferred stock.
   3. “Unvested share” refers to the shares that have been granted to the shareholder but have not the met the conditions for full ownership.
   4. “Change of Control” shall mean a merger, acquisition or sale of a certain percentage of a company’s assets or stock.
   5. “Confidential Information” shall mean the any non-public information, data, documentation, trade secrets, know-how, or any other information disclosed by one party (Company) to the other party (Shareholder) in connection with the terms and conditions whether in written, oral, electronic, or any other form, and identified as confidential or which the Parties should reasonably understand to be confidential.
2. SCOPE OF THE AGREEMENT
   1. This Agreement sets forth the terms and conditions under which the Shareholder’s equity ownership in the Company shall be subject to specific vesting restrictions and repurchase rights. It governs the allocation, vesting schedule, and treatment of unvested shares, particularly in the event of the Shareholder’s termination or a change in control of the Company. The Agreement also establishes the Company’s right to repurchase unvested shares under defined circumstances, and the conditions for issuing ownership certificates upon the fulfillment of vesting milestones.
   2. This Agreement further delineates the responsibilities and expectations of both Parties in relation to confidentiality, dispute resolution, legal compliance, and communication protocols. The purpose of this Agreement is to protect the interests of the Company and its investors while providing a clear and enforceable structure for share ownership and vesting by the Shareholder.
3. TERM
   1. This Agreement shall commence on the effective date of [INSERT DATE OF AGREEMENT] and continue for [INSERT TERM PERIOD OF AGREEMENT IN DAYS/MONTHS/YEARS] as agreed by the parties. The Agreement may be terminated earlier in accordance with the termination provisions set forth herein, including termination upon mutual written consent or any other conditions specified within the Agreement that allow for early termination.
4. OBLIGATIONS OF THE SHAREHOLDER
   1. The Shareholder agrees to render continuous service to the Company as a shareholder, employee, or consultant (providing services for a minimum of three (3) days per week), as a condition for the vesting of unvested shares.
   2. The Shareholder shall notify the Company promptly of any intention to terminate or discontinue their service or consultancy arrangement with the Company.
   3. The Shareholder shall not sell, transfer, pledge, or otherwise dispose of any unvested shares except as permitted by this Agreement or with the prior written consent of the Company.
   4. In the event of termination, the Shareholder agrees to comply with the Company’s repurchase of unvested shares and to execute all necessary documentation to facilitate such repurchase.
   5. The Shareholder shall maintain the confidentiality of all proprietary information received from the Company and act in good faith in their dealings with the Company.
5. OBLIGATIONS OF THE COMPANY
   1. The Company shall maintain proper records of the Shareholder’s vesting schedule and ensure that shares are vested in accordance with the terms of this Agreement.
   2. Upon termination of the Shareholder’s service, the Company shall exercise any repurchase rights within the timeframe specified in this Agreement (i.e., within sixty (60) days), by providing written notice to the Shareholder.
   3. Upon fulfillment of vesting conditions, the Company shall issue duly signed and sealed ownership certificates to the Shareholder evidencing legal title to the vested shares.
   4. The Company shall maintain the confidentiality of all personal and proprietary information of the Shareholder received in connection with this Agreement.
   5. The Company shall comply with all applicable corporate, securities, and tax laws in relation to the issuance, management, and transfer of shares under this Agreement.
6. UNVESTED SHARE REPURCHASE OPTION
   1. Upon the termination of the shareholder’s service to the Company as a Shareholder or employee, for any reason, with or without cause, including Involuntary Termination, death or temporary or permanent disability, the Company shall have the option to repurchase any unvested shares held by the shareholder as of the date of termination.
   2. The Company may exercise the Unvested Share Repurchase Option by written notice to Shareholder or the Shareholder’s legal representative within sixty 60 days after such termination.
7. VESTING OF UNVESTED SHARE
   1. Unvested shares shall vest according to the following schedule;
   2. [INSERT PERCENT (%)] of the shareholder’s share initially shall be Unvested Shares. [INSERT PERCENTAGE] of the initial number of Unvested Shares will vest [INSERT DATE ON WHICH THE SHARES SHALL VEST] and shall vest on the [INSERT DAY ON WHICH THE SHARE SHALL VEST] day of each month thereafter subject to the Shareholder’s continuous service to the Company as an Shareholder or consultant providing services at least three (3) days per week.
   3. In the event of a change of control or termination of the Shareholder, voluntary or involuntary, the Unvested Shares shall become fully vested and owned by the Company or investors.
8. REPRESENTATION AND WARRANTY
   1. Each Party hereby represents and warrants to the other Party, and acknowledges that the other Party is entering into this Agreement in reliance upon such representations and warranties, as follows:
      1. The Parties shall each have full power, authority, and legal right to enter into and perform this Agreement. The execution, delivery, and performance of this Agreement shall have been duly authorized by all necessary corporate actions (where applicable), and this Agreement shall constitute a valid and binding obligation of each Party, enforceable in accordance with its terms.
      2. Each Party shall represent that the execution and performance of this Agreement shall not constitute a breach of, or otherwise conflict with, any other agreement, instrument, judgment, order, or decree to which such Party is a party or by which it is bound. Furthermore, each Party shall ensure that the execution and performance of this Agreement shall not result in a violation of any applicable law, regulation, or requirement imposed by any governmental or regulatory authority.
      3. Each Party shall further represent and warrant that there are no actions, suits, proceedings, or investigations pending or, to the best of such Party’s knowledge, threatened against such Party that would reasonably be expected to affect such Party’s ability to enter into or perform its obligations under this Agreement.
      4. Each Party shall affirm that all statements made, documents provided, and information disclosed by it in connection with the negotiation and execution of this Agreement shall be true, accurate, and complete in all material respects. Neither Party shall have made any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements made not misleading.
      5. The foregoing representations and warranties shall survive the execution of this Agreement and shall continue in full force and effect for the duration of the term of this Agreement.
9. CERTIFICATE
   1. Upon successful fulfillment of the vesting conditions as outlined in this agreement, the Company shall issue ownership certificate to the holder of the shares representing the vested shares and interests.
   2. The Certificate shall be signed and sealed by an authorized representative of the Company and shall serve as official proof of the new shareholder’s ownership rights to the vested shares.
10. TAX MATTERS AND WITHHOLDING
    1. The Shareholder shall be solely responsible for any and all tax liabilities, obligations, or consequences arising from the grant, vesting, ownership, transfer, or disposition of any shares under this Agreement, including but not limited to income taxes, capital gains taxes, and any other applicable taxes or charges.
    2. The Company shall have the right to deduct or withhold, or require the Shareholder to remit to the Company, any taxes required to be withheld under applicable law in connection with any issuance, vesting, or transfer of shares pursuant to this Agreement. The Company may take such actions as it considers necessary to comply with its withholding obligations, including withholding shares or reducing the number of shares deliverable to the Shareholder.
    3. The Shareholder acknowledges and agrees that the Company has not provided, and is not obligated to provide, any tax, legal, or financial advice with respect to the shares or the transactions contemplated under this Agreement. The Shareholder has had the opportunity to consult with independent tax and legal advisors regarding their own tax obligations and consequences prior to entering into this Agreement.
11. TERMINATION
    1. Either party may terminate this Agreement for material breach on [INSERT THE NUMBER OF DAYS FOR NOTICE OF TERMINATION] days' written notice with opportunity to cure; provided termination will become effective immediately upon such notice, without opportunity to cure, if:
    2. this Agreement provides a specific date or period for performance of the obligation breached; or
    3. the injury caused by the breach is of a type that cannot be materially reduced by the breaching party during the cure period.
    4. Upon expiration or termination of this Agreement, all rights and obligations of the parties shall immediately cease, except for those obligations that have accrued prior to the effective date of termination. Specifically, any outstanding payment obligations, as well as any liabilities or breaches incurred before termination, shall remain fully enforceable. No new rights or obligations shall arise or be enforceable following termination, except for those expressly provided to survive termination within this Agreement.
    5. If this Agreement is terminated in accordance with its termination provisions, it shall become null and void and have no further force or effect, except that the Parties shall continue to be bound by its provisions regarding confidentiality and restrictions on announcements, indemnification, confidentiality, non-solicitation, non-disparagement, notices, miscellaneous matters, and governing law and dispute resolution. Nothing in this clause shall release any Party from any liability for any breach of this Agreement occurring prior to the effective date of such termination.
12. CONFIDENTIALITY
    1. The Shareholder acknowledges that in connection with this Agreement, they may receive or have access to confidential or proprietary information relating to the Company’s business, operations, technology, financial condition, or strategic plans (“Confidential Information”). The Shareholder shall not disclose, use, or permit the use of any Confidential Information for any purpose other than as necessary to perform their obligations under this Agreement or as required by law.
    2. The Shareholder agrees to maintain the strict confidentiality of such information and to take all reasonable measures to prevent unauthorized disclosure or use. These obligations shall survive the termination or expiration of this Agreement for a period of [INSERT THE NUMBER OF YEARS FOR WHICH THE CONFIDENTIALITY CLAUSE SHALL SURVIVE AFTER TERMINATION] years, or longer if required by applicable law or a separate confidentiality agreement.
    3. Confidential Information shall not include information that (i) is or becomes publicly known through no fault of the Shareholder, (ii) is lawfully received from a third party without restriction, or (iii) is independently developed without the use of Confidential Information.
13. INDEMNIFICATION
    1. Each party (“Indemnifying Party”) shall indemnify, defend, and hold harmless the other party, its affiliates, officers, directors, employees, agents, successors, and assigns (“Indemnified Party”) from and against any and all claims, demands, actions, suits, or proceedings initiated by third parties, as well as any resulting liabilities, damages, losses, costs, and expenses, including reasonable attorneys’ fees, to the extent such claims arise from;
       1. any breach by the Indemnifying Party of its covenants, agreements, or obligations under this Agreement;
       2. any inaccuracy or material misrepresentation in the representations or warranties made by the Indemnifying Party; or
       3. any claim that the use, licensing, or commercialization of intellectual property or proprietary rights by the Indemnifying Party infringes, misappropriates, or otherwise violates the rights of any third party. The Indemnified Party shall provide prompt written notice of any claim for which indemnification is sought, and the Indemnifying Party shall have the right to assume and control the defence with counsel of its choosing, subject to the Indemnified Party’s reasonable approval.
    2. The Indemnified Party shall cooperate in good faith, and while it may participate in the defence at its own expense, the Indemnifying Party shall not settle any claim without the Indemnified Party’s prior written consent if such settlement imposes liability, does not provide a full release, or includes an admission of wrongdoing. Indemnification shall not apply to the extent that the claim arises from the Indemnified Party’s own willful misconduct, negligence, or material breach of this Agreement.
14. LIMITATION OF LIABILITY
    1. Except as otherwise required by applicable law, neither Party shall be liable to the other Party for any indirect, incidental, consequential, or punitive damages arising out of or relating to this Agreement, whether in contract, tort (including negligence), or otherwise. The Company’s total liability for any claim arising under this Agreement shall not exceed the fair market value of the unvested shares as of the date of such claim.
15. DISPUTE RESOLUTION
    1. The Parties shall endeavour to resolve any differences of opinion which may arise between them with respect to the provisions of this Agreement by negotiation between themselves personally or with the assistance of their attorneys and unless in the opinion of any party, acting reasonably, the matter in dispute is of such significant nature to warrant it being addressed otherwise, no party shall commence any public proceedings until the negotiations have failed to produce a resolution. In furtherance of the provisions of this paragraph, all Parties hereby agree to make themselves available on short notice and to negotiate promptly and in good faith, any matter any party may wish to negotiate.
    2. All disputes arising under this agreement shall be governed by and interpreted in accordance with the Arbitration laws of [INSERT COUNTRY/STATE OF ARBITRATION] , without regard to principles of conflict of laws. The parties to this agreement will submit all disputes arising under this Agreement to Arbitration in [INSERT COUNTRY/STATE OF ARBITRATION] before a single arbitrator . The arbitrator shall be selected by mutual agreement of the parties. The venue of Arbitration proceedings shall be [INSERT NAME OF COUNTRY AND CITY WHERE ARBITRATION SHALL BE CONDUCTED] No party to this agreement will challenge the jurisdiction or venue provisions as provided in this section. The decision of the Arbitrator shall be final and binding upon the parties.
16. APPLICABLE LAW
    1. This Agreement shall be governed by and constructed in accordance with the Laws, rules, orders and regulations of [INSERT THE COUNTRY OF APPLICABLE LAWS].
    2. The Parties shall resolve all disputes in connection with the validity or interpretation of this Agreement, unless otherwise expressly stated in the Agreement, in the following manner: 
    3. By direct negotiations between the Company and Shareholder. 
    4. If negotiations between the parties are unsuccessful, the matter shall be referred to the competent court sitting at [INSERT THE PLACE OF COURT WITH EXCLUSIVE JURISDICTION IN CASE OF DISPUTE BETWEEN THE PARTIES] which shall have exclusive jurisdiction in all matters arising there from unless otherwise agreed between the Parties in writing.
17. FORCE MAJUERE
    1. Neither party shall be held liable for any failure or delay in performing its obligations under this Agreement if such failure or delay is caused by events beyond the reasonable control of the affected party, including but not limited to acts of God, natural disasters (e.g., floods, earthquakes, hurricanes), war, terrorism, riots, labour strikes, governmental actions, epidemics or pandemics, power outages, or other similar events ("Force Majeure Events").The affected party shall promptly notify the other party in writing of the occurrence of a Force Majeure Event, providing reasonable details of the event, its expected duration, and the steps being taken to mitigate its impact. Failure to provide timely notice may result in the affected party forfeiting its rights under this clause. If a Force Majeure Event continues for a period exceeding [INSERT THE NUMBER OF DAYS CONSTITUTING PERIOD EXCEEDING WHICH, IF THE FORCE MAJEURE CONTINUES, EITHER PARTY MAY TERMINATE THE AGREEMENT] days, either party may terminate this Agreement upon written notice to the other party without further liability, except for obligations accrued prior to the Force Majeure Event.
18. NOTICES
    1. Any notice, request, demand, consent or other communication required or permitted under this Agreement shall be in writing and sent either via email on the email address as provided by the parties and shall be considered sent when the email is sent to the correct email address of the party or shall be given by personal delivery (including courier) by certified mail (confirmed by mail) addressed to the party for which it is intended at the address below and shall be deemed to be given on the day of delivery or transmission if within during normal business hours, or, if after business hours, on the next following Business Day, or if mailed by registered or certified mail, on the day which is [INSERT THE APPLICABLE NUMBER OF BUSINESS DAYS WITHIN WHICH THE NOTICE WILL BE DEEMED SERVED] Business Days after such notice is mailed during normal postal conditions.  In the event of a postal disruption, any notice mailed will be deemed received on the [INSERT THE APPLICABLE NUMBER OF BUSINESS DAYS WITHIN WHICH THE NOTICE WILL BE DEEMED SERVED] Business Day following resumption of regular postal service:
       1. If to the Company : [INSERT EMAIL ID OR/AND ADDRESS OF THE COMPANY]
       2. If to the Shareholder: [INSERT EMAIL ID OR/AND ADDRESS OF THE SHAREHOLDER]
    2. Either party may change its address/email address for notices and other communications upon notice to the other party in the manner aforesaid.
19. MISCELLANEOUS
    1. Modifications: Except as otherwise provided herein this Agreement shall not be amended or otherwise modified unless the modification or amendment is done in writing, signed and has been mutually agreed by both the parties.
    2. Language: The language of all communications between the parties pursuant to this Agreement, including notices and reports, will be the [INSERT LANGUAGE OF ALL COMMUNICATION].
    3. Severability: If any provision of this Agreement shall, to any extent, be held to be invalid or unenforceable, it shall be deemed to be separate and severable from the remaining provisions of this Agreement, which shall remain in full force and effect and be binding as though the invalid or unenforceable provision had not been included.
    4. Entire agreement: This agreement along with all the Exhibits constitutes the entire understanding and agreement of the parties with respect to its subject matter and supersedes all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the parties. This Agreement may be executed in identical duplicate counterparts, each of which shall be deemed an original, and both of which together shall constitute one and the same instrument. 
    5. No Waiver: Any failure or delay of any Party hereto in exercising any right or privilege with respect to this Agreement shall not be construed to be a waiver or to affect the validity of any part of the Agreement and shall not retrain any of the Parties to enforce any of the provisions of the Agreement.
    6. Amendments and Assignments:  Any amendments to this Agreement shall be made, only if, both Parties agree upon such amendment in writing. This Agreement shall not be assigned by either party without the express, written consent of the other party.
    7. Headings: The headings upon the various sections are solely for convenience and reference only and shall not affect the scope, meaning, intent or interpretation of the provisions of this Agreement, nor shall such headings otherwise be given any legal effect.
20. INDEPENDENT LEGAL ADVICE
    1. The Parties are advised to seek independent legal counsel before entering into this Agreement. Each Party acknowledges that they have been given a reasonable opportunity to consult with an attorney of their choosing regarding the terms, conditions, and obligations set forth in this Agreement, including any restrictions or commitments imposed herein.
    2. By signing this Agreement, the Parties confirm that they have either sought such independent legal advice or voluntarily chosen to proceed without it. Each Party further represents that they are entering into this Agreement knowingly, voluntarily, and with a full understanding of its provisions. The Parties acknowledge that they are not relying on any statements, promises, or representations made by the other Party or any representative thereof that are not expressly included in this Agreement.
21. DECLARATION
    1. The Parties hereby acknowledge that the terms herein have been read, fully understood, and expressly agreed to, and hereby commit to performing their obligations with due diligence, honesty, and in good faith. The Parties hereby agree to foster a collaborative environment that promotes transparent communication and timely resolution of any issues, thereby ensuring compliance with all applicable laws and industry best practices.

IN WITNESS WHEREOF, the parties, intending to be legally bound, have each executed this agreement as of the effective date.

Signed, sealed and delivered on behalf of Company

Name: [INSERT NAME OF COMPANY/SIGNING AUTHORITY AND DESIGNATION]

Signature:

Date: [INSERT SIGNING DATE OF COMPANY]

Signed, sealed and delivered on behalf of Shareholder

Name: [INSERT NAME OF SHAREHOLDER/SIGNING AUTHORITY AND DESIGNATION]

Signature: 

Date: [INSERT SIGNING DATE OF SHAREHOLDER]