Are electronic signatures legally valid?

Yes. Electronic signatures are legally valid under the federal ESIGN Act (15 U.S.C. ch. 96) and state UETA laws when intent, consent, attribution, and retention are documented; however certain statutory exceptions, such as wills or court orders, may remain inapplicable to e-signing.

When is notarization required?

Notarization depends on state law and the asset type; many states require notarized acknowledgements for deeds or transfer instruments. Remote Online Notarization (RON) is permitted in most states subject to identity-proofing and audio-video retention rules; verify state notary commission requirements.

How do I correct signer errors?

If a signature is missing or names mismatch, execute a corrective amendment or ratification signed by all parties and note the reason for correction. For material mistakes, obtain legal review; notary re-attestation or new execution may be required under state law.

Are remote notarizations accepted?

Many states now permit Remote Online Notarization (RON) with identity proofing, multi-factor authentication, and recorded audio-video sessions; audio-video retention and notary journal requirements vary. Confirm the state’s permanent RON statute or administrative rules before relying on remote notarization.

Can lockups be amended after signing?

Yes, amendments are possible when the agreement’s amendment clause allows it or when all parties provide written consent. Amendments should be dated, signed by the same authorized signatories, and follow any required notarization or shareholder approval procedures to ensure enforceability.

What remedies exist for breaches?

Remedies typically include injunctive relief to prevent prohibited transfers, monetary damages for losses, contractual buyback provisions, and specific performance where available. Choice-of-law and venue clauses will influence litigation paths, and courts will interpret ambiguous restrictions under ordinary contract principles.

Electronic Signature
Templates
Legal
Legal Lockup Agreement

Legal Lockup Agreement

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LEGAL LOCKUP AGREEMENT

This Legal Lockup Agreement (the Agreement) is entered into as of between Company Name: , a Corporation LLC Other, with principal place of business at (Company), and Holder Name: , with address at (Holder). Company and Holder are each a Party and together the Parties.

RECITALS

WHEREAS, Holder is the beneficial or record owner of certain securities of the Company set forth in Schedule A attached hereto and made a part hereof; and

WHEREAS, in connection with the Company's financing, registration, public offering or other corporate transaction, the Company requires assurances that such securities will not be sold, transferred or otherwise disposed of for a specified period; and

WHEREAS, Holder is willing to agree to certain transfer restrictions on the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

For purposes of this Agreement, the following terms shall have the following meanings:

(a) "Securities" means the shares, options, warrants, or other equity interests of the Company held by Holder as described in Schedule A.

(b) "Lockup Period" means the period commencing on the date hereof and continuing until the earlier of (i) the expiration of months from the effective date or (ii) the date specified as the Lockup End Date: .

2. LOCKUP OBLIGATIONS

During the Lockup Period, Holder shall not, directly or indirectly, (i) offer, sell, contract to sell, pledge, hypothecate, gift, transfer, assign or otherwise dispose of any Securities, or (ii) enter into any transaction that would have the economic effect of disposing of Securities, except as expressly permitted by Section 3. Any attempted disposition in violation of this Section shall be null and void ab initio and shall not be effective to transfer title or economic rights in the Securities.

3. EXCEPTIONS

Notwithstanding Section 2, the restrictions set forth therein shall not apply to:

(a) Transfers by Holder to an immediate family member or to a trust for the benefit of Holder or Holder's immediate family, provided that any transferee executes a written agreement reasonably satisfactory to the Company, agreeing to be bound by the terms of this Agreement.

(b) Transfers to an affiliate of Holder or to any entity controlled by Holder, provided that the transferee assumes in writing Holder's obligations hereunder.

(c) Transfers by operation of law upon the death or incapacity of Holder, or pursuant to court order, probate or other compelled disposition, provided that the transferee agrees in writing to be bound by the restrictions of this Agreement.

(d) Transfers otherwise permitted in writing by the Company upon a determination by the Company in its reasonable discretion that such transfer will not prejudice the objectives underlying this Agreement.

4. LEGEND AND BOOKS

Holder agrees to deliver, at the time of any certificate delivery or book-entry instruction, instructions to the transfer agent to cause any certificates representing Securities to be stamped or imprinted with a restrictive legend reading substantially as follows: "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCKUP AGREEMENT BETWEEN THE REGISTERED HOLDER AND THE COMPANY AND MAY NOT BE TRANSFERRED, SOLD, OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH SUCH AGREEMENT." Company may require, as a condition to removing any such legend, such documentation and assurances as it reasonably deems necessary.

5. REPRESENTATIONS AND WARRANTIES

Holder represents and warrants that: (a) Holder has full power and authority to enter into this Agreement and to perform its obligations hereunder; (b) Holder has good and marketable title to the Securities free and clear of any liens, encumbrances or adverse claims except for those expressly disclosed in writing to the Company; and (c) execution, delivery and performance of this Agreement by Holder will not violate any agreement, law or court order applicable to Holder.

Company represents and warrants that it has the corporate power and authority to enter into this Agreement and to perform its obligations hereunder and that this Agreement has been duly authorized by all necessary corporate action.

6. ENFORCEMENT; REMEDIES

The Parties agree that monetary damages would be inadequate compensation for any breach of this Agreement and that, in the event of any such breach or threatened breach by Holder, Company shall be entitled to seek injunctive or other equitable relief, without being required to post bond or prove actual damages, in addition to any other remedies available at law or in equity. Holder acknowledges that the Company may withhold registration or refuse to remove legends to enforce this Agreement.

7. TERM; TERMINATION

This Agreement shall remain in full force and effect for the Lockup Period, unless earlier terminated by written agreement of the Parties. Termination of this Agreement shall not relieve Holder of obligations arising from unauthorized transfers occurring prior to termination.

8. NOTICES

Notices to Company Notices to Holder

All notices required or permitted under this Agreement shall be in writing and shall be deemed given upon personal delivery or three (3) business days after deposit in the U.S. mail, postage prepaid, addressed to the Parties at the addresses set forth above or to such other address as either Party shall designate by notice to the other in accordance with this Section.

9. ASSIGNMENT

Holder may not assign or transfer any obligation under this Agreement except as permitted in Section 3 and except that Holder may assign this Agreement to a transferee who agrees in writing to be bound by the terms hereof. Any purported assignment in violation of this Section shall be void.

10. GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to conflict of law principles.

11. ENTIRE AGREEMENT

This Agreement, including Schedule A, constitutes the entire agreement of the Parties with respect to the subject matter hereof, and supersedes all prior agreements and understandings, both written and oral, between the Parties relating to such subject matter.

12. SEVERABILITY

If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such provision shall be modified to the minimum extent necessary to make it valid and enforceable, and the remaining provisions shall remain in full force and effect.

13. AMENDMENT AND WAIVER

No amendment, modification or waiver of any provision of this Agreement shall be effective unless in writing and signed by the Party against whom enforcement is sought. No failure or delay by any Party in exercising any right under this Agreement shall operate as a waiver of such right.

14. COUNTERPARTS

This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be an original, but all of which together shall constitute one and the same instrument. Signatures delivered by facsimile, electronic image or other electronic means shall be binding.

15. MISCELLANEOUS

The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement. The obligations and rights hereunder shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

SCHEDULE A — SECURITIES SUBJECT TO LOCKUP

Number of Shares/Units Subject to Lockup Class of Securities

Company:

By:

Date:

Holder:

By:

Date:

What a Legal Lockup Agreement Is and when it's used

Legal Lockup Agreement is a contractual arrangement that restricts the transfer, sale, or public offering of securities or specified assets for a defined period following a corporate event. Commonly used in initial public offerings, merger and acquisition transactions, and private financing rounds, the agreement binds parties — typically founders, early investors, and key employees — to refrain from selling shares for a negotiated lockup period. The document specifies duration, exceptions, permitted transfers, remedies for breach, and procedures for termination or amendment, and forms part of the issuer’s governing transaction documents.

Why parties include a Legal Lockup Agreement

Used to protect market stability and align stakeholder interests, a Legal Lockup Agreement reduces immediate share selling after an offering, clarifies transfer restrictions and enforcement options, and provides counterparties with contractual remedies. It also documents exceptions and timelines that reduce post-closing disputes.

Common users and roles for this agreement

Common users include corporate issuers, underwriters, investors, and legal counsel who manage post-transaction transfer restrictions.

Startup founders and early investors agreeing to resale restrictions during IPO or exit transactions.
Underwriters seeking market stability by limiting large-scale sell-offs immediately after public offerings.
Corporate legal teams drafting enforceable timelines, carve-outs, and transfer procedures in transaction documentation.

Effective implementation typically requires collaboration across finance, compliance, corporate secretarial, and external counsel teams to ensure enforceability and regulatory alignment.

Who typically signs or negotiates a lockup

Issuer Counsel

In-house or outside attorneys who prepare and negotiate the lockup terms, ensure consistency with securities laws, and advise on exceptions such as permitted transfers. They coordinate with underwriters and corporate governance teams to align the lockup with disclosure schedules and regulatory filings.

Investor Representative

An appointed investor signatory or counsel who negotiates forfeiture clauses, transfer permissions, and buyback rights; monitors compliance during the lockup period and triggers remedies if transfers occur outside permitted windows, protecting investor value and contractual expectations.

Key security and compliance elements to capture

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest

Access Controls: Role-based access and SSO available

Audit Trail: Timestamps, IP, action history preserved

HIPAA BAA: BAA required for PHI-related agreements

ESIGN / UETA: Electronic signatures accepted under federal/state law

Notary Records: RON and journal retention where applicable

Primary legal and operational risks to avoid

Breach Remedies: Damages and injunctive relief possible

Securities Law Risk: SEC enforcement for false disclosures

Tax Withholding: Backup withholding if TIN issues

Invalid Execution: Unsigned or mismatched names voidable

Notarization Missing: Deeds may be rejected in filings

Contract Ambiguity: Ambiguous clauses trigger litigation

Common drafting and execution pitfalls

Using vague transfer language that leaves open whether secondary-market transactions are permitted, which creates disputes at enforcement.
Failing to specify exception types (for example, transfers to affiliates or on death) leading to unintended prohibition of routine transfers.
Not aligning the lockup period with registration or escrow timelines, causing conflicts with underwriter agreements and regulatory filings.
Overlooking required consents or notarizations for certain asset types, which can invalidate restrictions in specific jurisdictions.

Step-by-step completion checklist

Complete each section sequentially, confirm party names and effective dates, and specify permitted exceptions before final execution.

01

Identify Parties: Enter full legal names and entity types.
02

Define Assets: Describe securities or assets subject to lockup.
03

Set Duration: Specify lockup period with clear start/end dates.
04

Exceptions: List permitted transfers and required approvals.

How to configure an online signing workflow

When completing online, configure authentication, field validation, and routing rules to match the legal requirements of the lockup agreement.

Field	Configuration
Authentication	Email link; optional SMS or KBA
Signer Order	Specify sequential or parallel signing
Conditional Fields	Show carve-outs when checkbox selected
Retention	Keep signed PDF and audit trail archived

Technical and integration considerations

Legal Lockup Agreements can be managed and distributed electronically but may require notarization or witness steps per jurisdiction.

Formats: PDF, Word DOCX supported
Integrations: Salesforce, NetSuite, Google Workspace
Authentication: Email, SMS, KBA, SSO options

Typical electronic submission flow

Routing, authentication, and audit capture are essential steps when submitting a lockup agreement electronically remotely.

Upload Document: Attach signed draft or template to the platform.
Place Fields: Add signature, date, and checkbox fields.
Authenticate Signers: Choose email, SMS code, or KBA.
Finalize: Generate signed PDF and certificate of completion.

Key dates and timing considerations

Key deadlines depend on transaction timing, securities registration, and any regulatory notice periods; coordinate dates across involved parties.

Lockup Effective Date:

Date when restrictions begin; use MM/DD/YYYY format.

Lockup Expiration Date:

Exact end date when transfers become permitted without consent.

Notice Periods for Transfers:

Specify days required for notice before a permitted transfer.

Registration Statement Deadline:

Coordinate with underwriters for effective registration timelines.

Execution and Notarization:

Meet state witness/notary deadlines to validate transfer restrictions.

Price and capability snapshot for common eSignature vendors

Comparison shows starting price and key capabilities for common eSignature vendors used to process Legal Lockup Agreements; signNow is listed first in the vendor column.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Frequently asked questions about Legal Lockup Agreements

Answers to common questions about enforceability, notarization, digital signatures, and correcting errors in Legal Lockup Agreements.

Need help? Contact support

Are electronic signatures legally valid?
Yes. Electronic signatures are legally valid under the federal ESIGN Act (15 U.S.C. ch. 96) and state UETA laws when intent, consent, attribution, and retention are documented; however certain statutory exceptions, such as wills or court orders, may remain inapplicable to e-signing.
When is notarization required?
Notarization depends on state law and the asset type; many states require notarized acknowledgements for deeds or transfer instruments. Remote Online Notarization (RON) is permitted in most states subject to identity-proofing and audio-video retention rules; verify state notary commission requirements.
How do I correct signer errors?
If a signature is missing or names mismatch, execute a corrective amendment or ratification signed by all parties and note the reason for correction. For material mistakes, obtain legal review; notary re-attestation or new execution may be required under state law.
Are remote notarizations accepted?
Many states now permit Remote Online Notarization (RON) with identity proofing, multi-factor authentication, and recorded audio-video sessions; audio-video retention and notary journal requirements vary. Confirm the state’s permanent RON statute or administrative rules before relying on remote notarization.
Can lockups be amended after signing?
Yes, amendments are possible when the agreement’s amendment clause allows it or when all parties provide written consent. Amendments should be dated, signed by the same authorized signatories, and follow any required notarization or shareholder approval procedures to ensure enforceability.
What remedies exist for breaches?
Remedies typically include injunctive relief to prevent prohibited transfers, monetary damages for losses, contractual buyback provisions, and specific performance where available. Choice-of-law and venue clauses will influence litigation paths, and courts will interpret ambiguous restrictions under ordinary contract principles.

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