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FOUNDERS AGREEMENT
THIS FOUNDERS AGREEMENT (the “Agreement”) is made as of [________, 20__] (“Effective
Date”), by and among [NAME & ID OF FOUNDER A] (“Founder A”), and [NAME & ID OF
FOUNDER B] (“Founder B”)
...
Whereas The Founders wish to collaborate with the purposes of developing certain business model
(“Business Model”) which is an idea for a business involving involve a new product, service
or invention, or different approach to marketing or delivering an existing product or service
that gives a company an advantage over competitors, and the related technology and
intellectual property that is used to create, implement, develop, or perfect the idea; and
Whereas
Whereas
The Founders wish to form a joint company (“Company”) which shall be involved in the
research, development and implementation of Business Model outlined in the Exhibit A
_____________________; and
the Founders wish to specify their respective rights and obligations, with respect to the
Company and its future business, all in accordance with the terms and conditions detailed
herein
...
Formation and Governance of the Company
1
...
Promptly after the execution of this Agreement, the Founders shall make their best efforts to
establish a corporation to be founded in _________________________________, under the tentative
company name of _________________, or such other which shall be mutually agreed by the Founders
...
2
The Company’s Articles will be in a standard form as is customarily used in
________________, which shall include however the relevant special provisions of this
Agreement
...
1
...
1
...
Each share
shall be entitled to one vote in any matter brought before the shareholders of the Company
...
1
...
1% of the issued and outstanding shares of the Company
...
1
...
2
...
All intellectual property rights relating to or arising
out of the Business Model, including patents and trademarks, which are capable of registration will be
registered solely in the name of the Company
...
Business Structure, Shares & Transfer
3
...
2
The Company shall reserve __% of its capital for issuance to employees, as shall be determined
by the Board, within the framework of an employee stock option plan to be approved by the Board
...
3
...
If a Founder departs the Company so that such Founder‘s relationship with the Company terminates for any
reason prior to full vesting of his or her Percentage Interest, during the _____ year period from the date of
the issuance of the shares, then:
the Company may buy back the portion of shares that have not vested or nominate the other Founder or any
other person to acquire and hold those shares in each case for consideration of _________ per share
...
5
Each Founder will have the same rights (including but not limited to voting and distribution rights)
accorded to the Percentage Interest issued to each Founder
...
6
The Founders agree that Company shall not issue (or agree to issue) any equity, option, warrant or
other equity security without the written agreement of all Founders
...
3
...
Each Founder will be entitled (but not obligated) to
purchase, within fourteen (14) days after receipt of notice from the Company that it intends to offer New
Shares, all or part of his portion of the New Shares, and all or any of the portions of the other Founders who
have not exercised their rights hereunder, at the same price and on the same terms as such New Shares are
proposed to be offered by the Company
...
The term New Shares shall not
include any shares issued under stock or option incentive plans, shares issued upon stock dividends,
reclassification or re-capitalization, shares issued upon conversion or exercise of preferred shares whose
issuance was approved by the Board, issuances in connection with acquisitions or settlements of claims and
issuances of shares to strategic investors who are defined as such by the Board
...
8
Subject to the provisions of this Section 9, no shareholder in the Company may sell, assign, transfer,
pledge or otherwise dispose of, whether directly or indirectly, any Shares or any interest therein (each a
“Transfer”) without complying with the terms of this Agreement
...
3
...
The Offeree shall be required to give written notice of his decision to the Offeror, within 21
days of receipt of the Notice, whether to purchase all, but not less than all, of the Offered Shares or does
not give any notice at all within the allotted period, then the Offeror shall be free to Transfer his shares to a
third party, but on terms which shall not be less favorable to the third party than those specified in the Notice
...
A Transfer to a third
party shall only become effective after such third party has executed a written undertaking to comply with
the provisions of this Agreement and such Transfer was approved by the Board
...
3
...
In each of the above cases, the transfer shall come into to effect
only after the transferee has executed a written undertaking to comply with the provisions of this Agreement
and only as long as such transferee qualifies as a Permitted Transferee, as approved by the Board
...
11
Until the earlier of (i) the IPO; or (ii) a period of ___ years have from the execution hereof; the
Founders shall not be entitled to transfer any of their shares in the Company unless such transfer is approved
by the Board
...
Management
...
1
The Board of Directors shall consist of two directors, until it is decided otherwise by the joint
decision of the Founders
...
Founder B shall be responsible, in accordance with the instructions of the Board, for the daily management
of the Company
...
The Founders together shall design and implement the scientific and engineering strategies and plans of the
Company
...
2
The quorum for all meetings of the Board shall be two directors
...
3 below
...
3
Notwithstanding anything to the contrary in this Agreement and in the Articles, the following
matters shall be subject to the affirmative vote of Founder B, as long as Founder B holds at least ____% of
the outstanding shares of the Company:
(a) the sale and/or other disposition of the Business Model
...
4
...
5
...
6
...
Upon the formation of the Company, the
Founders may further detail and define any additional confidentiality obligations
...
7
...
If the Founders have not yet formed a Company within twelve (12) months of executing this Agreement,
the Founders will have 30 additional days to take substantial steps toward forming the Company
...
The Founders will further define any and all confidentiality obligations
related to the Business Model within the separation agreement
...
Representations and Warranties
Each Founder represents and warrants that he or she is not a party to any other agreement that would restrict
such Founder’s ability to perform its obligations as set forth in this Founders’ Collaboration Agreement
...
9
...
1
9
...
3
9
...
5
Miscellaneous Provisions
Expenses
...
Amendment and Modification
...
Termination
...
Remedies
...
All notices and other communications hereunder shall be in writing and shall be deemed
given on delivery if delivered personally or sent by facsimile transmission with electronic
confirmation, or four (4) business days following such notice being sent, if mailed by registered or
registered, postage prepaid, to the other Founder at the address as mentioned in the heading of this
Agreement (or at such other address for a Founder as shall be specified by like notice; provided
that notices of a change of address shall be effective only upon receipt thereof)
...
6
9
...
8
9
...
10
9
...
This Agreement will be governed by and construed in all respects in accordance
with _____________________
...
Any disputes arising under or in connection with the validity, interpretation and
performance of this Agreement that cannot be resolved amicably by the Founders shall be brought
before a mediator agreed to be the Founders for settlement and in the event such settlement is not
reached within ____ days then the dispute shall be resolved in arbitration before a single arbitrator
...
If the Founders cannot mutually agree on the selection of an arbitrator within
ten (10) days of the request, they shall apply to the Chairperson of the Israeli Bar Association to
appoint one
...
Arbitration proceedings
shall be conducted in Israel, in the Hebrew language
...
The decision of any such arbitrator shall be final and binding on the Founders
...
Each
Founder shall pay the arbitrator’s fees when due, and if he shall not do so, the arbitrator shall enter
a final award against such Founder
...
Upon its formation the Founders shall cause the
Company to adopt and ratify the terms and conditions of this Agreement
...
This Agreement may be executed in one or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute one and the same instrument
...
This Agreement, including the exhibits and schedules hereto and the
documents, schedules, certificates and instruments referred to herein, embody the entire agreement
and understanding of the Founders hereto in respect of the transactions contemplated by this
Agreement
...
This Agreement supersedes
all prior agreements and understandings between the Founders with respect to such transactions
...
If any provision of this Agreement is held by a competent court to be invalid or
unenforceable under applicable law, then such provision shall be severed from this Agreement and
the remainder of this Agreement shall be interpreted as if such provision were so severed and shall
be enforceable in accordance with its terms; provided, however, that in such event this Agreement
shall be interpreted so as to give effect, to the greatest extent consistent with and permitted by
applicable law, to the meaning and intention of the severed provision as determined by the Founders
or as determined by court of competent jurisdiction
...
Agreed by
FOUNDERS:
________________________________________
Name:
Address For Notice:
_________________________________________
Name:
Address For Notice:
Ratified by
COMPANY:
________________________________________
Name:
Title:
Address For Notice:
Ratification Date: