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Sweat Equity Agreement
"I need a Sweat Equity Agreement under Austrian law for a senior software developer who will join my early-stage fintech startup, providing 20 hours per week of development services in exchange for 5% equity vesting over 3 years, starting March 2025."
1. Parties: Identification of the company and the service provider, including full legal names and addresses
2. Background: Context of the agreement, including the company's business and the service provider's expertise
3. Definitions: Key terms used throughout the agreement, including technical and legal definitions
4. Services: Detailed description of the services to be provided, including scope, quality standards, and timeframe
5. Equity Compensation: Details of the equity stake offered, including percentage, type of shares, and vesting schedule
6. Vesting Terms: Specific conditions and timeline for the vesting of equity, including any cliff period
7. Valuation: Agreed method for valuing the services and corresponding equity
8. Tax Implications: Overview of tax treatment and responsibilities of both parties
9. Representations and Warranties: Statements of fact and promises made by both parties
10. Confidentiality: Provisions protecting company information and trade secrets
11. Intellectual Property Rights: Assignment of IP created during the service period
12. Term and Termination: Duration of the agreement and conditions for ending it
13. Governing Law: Specification of Austrian law as governing law and jurisdiction
1. Non-Competition: Restrictions on competing activities, used when the service provider might have access to sensitive business information
2. Board Observation Rights: Rights to attend board meetings, included for significant equity stakes
3. Tag-Along Rights: Rights to join in sale of shares, relevant for minority shareholders
4. Drag-Along Rights: Obligation to join in sale of shares, included for majority shareholder protection
5. Employee Status: Clarification of employment status, needed when service provider might be considered an employee
6. Performance Metrics: Specific KPIs or milestones, included when equity vesting is tied to performance
7. Dispute Resolution: Alternative dispute resolution procedures, optional when parties prefer arbitration
1. Schedule A - Service Description: Detailed scope of services and deliverables
2. Schedule B - Vesting Schedule: Detailed timeline and conditions for equity vesting
3. Schedule C - Share Capital Structure: Current and post-investment share capital structure
4. Schedule D - Valuation Methodology: Agreed method for calculating service value and equity
5. Schedule E - IP Assignment: Detailed terms of intellectual property transfer
6. Appendix 1 - Company Articles: Current articles of association
7. Appendix 2 - Shareholders Agreement: Existing shareholders agreement (if applicable)
Authors
Technology
Software Development
Consulting
Professional Services
Startups
E-commerce
Digital Media
Financial Technology
Healthcare Technology
Creative Industries
Business Services
Education Technology
Legal
Human Resources
Finance
Executive Leadership
Corporate Development
Operations
Administration
Compliance
Founder
Co-Founder
Chief Technology Officer
Chief Marketing Officer
Chief Product Officer
Technical Advisor
Strategic Consultant
Software Developer
Product Manager
Business Development Executive
Marketing Strategist
UX/UI Designer
Financial Advisor
Operations Manager
Creative Director
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