Agreement Between Co-Founders (Non-Binding) - Form Pro · AU-law

CO-FOUNDERS AGREEMENT

________

This Co-Founders Agreement ("this Agreement") is made on ________.

BETWEEN:

________

of the following address:

________

holding Australian Business Number (where applicable): ________

AND

________

of the following address:

________

holding Australian Business Number (where applicable): ________

(referred to in this Agreement collectively as the "Founders" and individually as a "Founder")

BACKGROUND

A. The Founders intend to work together to develop a project and/or business as described in this Agreement.

B. This Agreement records the initial relationship between the Founders and sets out the respective rights, responsibilities and expectations of each Founder.

C. Save for the clauses expressly stated to be legally binding in §13, this Agreement is intended to record the mutual understanding and good faith expectations of the Founders and is not otherwise intended to create legally binding obligations.

D. Each Founder undertakes to act honestly, in good faith and in the best interests of the Project.

§1 — THE PROJECT

1.1 The Founders agree to work together on a project to be named ________ ("the Project"), the nature of which involves:

________

1.2 The Founders intend that, if and when appropriate, the Project will be conducted through a legal entity of the following type: ________, in which case the Founders will execute such further documents (including a shareholders or unitholders agreement and constitution) as may be required under the Corporations Act 2001 (Cth).

§2 — FOUNDERS' INITIAL CAPITAL CONTRIBUTIONS

2.1 Each Founder will contribute to the capital of the Project, in cash, property, goods or services of an agreed value, as follows (each a "Capital Contribution"):

(a) ________ — $________ (________)

(b) ________ — $________ (________)

2.2 All Capital Contributions are to be made fully and on time, and in any event no later than ________.

2.3 All Capital Contributions are final and may not be withdrawn unless all Founders give their written consent to such withdrawal.

§3 — ADDITIONAL CAPITAL CONTRIBUTIONS

3.1 From time to time, with the prior written consent of all Founders, one or more Founders may make additional capital contributions to the Project in addition to the Capital Contributions set out in §2 (each an "Additional Capital Contribution").

3.2 No Founder is required to make any Additional Capital Contribution unless all Founders provide their prior written consent to that Additional Capital Contribution.

§4 — FOUNDERS' ROLES AND CONTRIBUTIONS OF WORK

4.1 The Founders agree to fulfil the roles and perform the work in relation to the Project set out below:

(a) ________ —

________

(b) ________ —

________

4.2 The Founders acknowledge that nothing in this Agreement is intended to create a relationship of employment between any Founder and the Project, and that the engagement of any employee will be governed by the Fair Work Act 2009 (Cth) and applicable modern awards.

§5 — FOUNDERS' SHARES OF EQUITY IN THE PROJECT

5.1 For the purpose of this clause, the equity in the Project ("Project Equity") includes equity in the following assets:

________

5.2 Each Founder will be entitled to a percentage ownership of the Project Equity as follows:

(a) ________ — ________% (________ percent)

(b) ________ — ________% (________ percent)

5.3 The Founders acknowledge that the issue of equity interests in any incorporated entity will be subject to the Corporations Act 2001 (Cth) and the entity's constitution, and that vesting arrangements (if any) applying to any Founder's equity are set out below: ________.

§6 — CONFIDENTIALITY

6.1 The Founders acknowledge that, except as stated in §13, this clause is not intended to be legally binding, and that if they require binding confidentiality protection they will enter into a separate binding confidentiality agreement.

6.2 Each Founder acknowledges that, in connection with this Agreement, they may have access to information that is confidential and/or commercially valuable to one or more of the other Founders ("Confidential Information").

6.3 Each Founder may be both the receiving party in relation to some Confidential Information ("Receiving Party") and the disclosing party in relation to other Confidential Information ("Disclosing Party"), and the terms of this clause apply to each Founder in both capacities as the context requires.

6.4 Confidential Information may include, but is not limited to:

(a) information of whatever nature relating to the Project or to another Founder;

(b) any information derived from any other information falling within this definition; and

(c) any copy of any Confidential Information,

but does not include information which:

(a) was lawfully known or in the possession of the Receiving Party before it was provided by the Disclosing Party, otherwise than as a result of any breach of an obligation of confidentiality;

(b) is, or becomes, publicly available through no fault of the Receiving Party;

(c) is provided to the Receiving Party without restriction by a third party who did not breach any confidentiality obligation in doing so;

(d) is provided by the Disclosing Party and marked "Non Confidential"; or

(e) is required by law or regulation to be disclosed, in which case disclosure is limited to the minimum necessary and, where practicable, the Disclosing Party is first consulted.

6.5 In relation to any Confidential Information, the Receiving Party shall:

(a) keep the Confidential Information confidential and secret;

(b) use the Confidential Information only for the purpose of working in good faith on the Project; and

(c) not disclose the Confidential Information to any other party, unless that party is an advisor under a duty of confidentiality who is assisting with the Project and needs the Confidential Information for that purpose.

6.6 If there is any doubt as to whether information constitutes Confidential Information, the Receiving Party should treat it as Confidential Information until the Disclosing Party confirms otherwise in writing.

6.7 Where any Confidential Information constitutes personal information, the Founders will comply with the Privacy Act 1988 (Cth) and the Australian Privacy Principles in relation to its collection, use, storage and disclosure.

6.8 Each Founder's obligations under this clause survive the termination or expiration of this Agreement and continue after that Founder ceases to participate in the Project.

§7 — RESTRAINT OF TRADE AND COMPETITION

7.1 The Founders acknowledge that, except as stated in §13, this clause is not intended to be legally binding, and that if they require a binding restraint they will enter into a separate binding non-compete agreement.

7.2 Each Founder agrees that, for the period set out in 7.4 ("the Restraint Period") after the Founder ceases to participate in the Project, and within the area set out in 7.5 ("the Restraint Area"), the Founder will not, directly or indirectly, whether as employee, partner, sole trader, manager, director, advisor, agent, representative, affiliate, consultant, shareholder, unitholder, trustee, contractor or otherwise:

(a) engage in a business or project that is the same as, similar to, or in competition with the Project;

(b) solicit, hire, or attempt to hire any other Founder or any employee or staff member working in connection with the Project; or

(c) solicit any customers or clients of the Project.

7.3 The Founders acknowledge that any restraint of trade is enforceable only to the extent it is reasonable to protect the legitimate interests of the Project, and the restraint operates as separate and severable restraints for each combination of the periods and areas specified, so that any restraint found to be unreasonable may be read down or severed without affecting the remaining restraints.

7.4 For the purposes of this clause, "the Restraint Period" means, from the date the Founder ceases to participate in the Project:

________

7.5 For the purposes of this clause, "the Restraint Area" means:

________

7.6 This clause survives the termination or expiration of this Agreement.

§8 — INTELLECTUAL PROPERTY

8.1 In connection with each Founder's participation in the Project, the Founder may generate, create, contribute to, write or produce intellectual property ("Project Intellectual Property").

8.2 "Project Intellectual Property" includes, but is not limited to:

(a) information, ideas, innovations, developments, improvements, inventions, discoveries, plans, reports, drawings, specifications, advice, analyses, designs, methodologies, code, artwork, or any other intellectual property;

(b) intellectual property resulting in any way from work performed for or on behalf of the Project, whether by the Founder or another person;

(c) intellectual property generated, created, contributed to, written or produced:

(i) directly, indirectly, independently or in cooperation with any other person;

(ii) during or outside the Founder's ordinary working hours; and

(iii) at the location where the Founder ordinarily participates in the Project, or elsewhere;

(d) intellectual property resulting in any way from the use of the Project's resources or assets, including reference or other materials, personnel, facilities or other resources; and

(e) intellectual property relating in any other way to the Project or any business developed in connection with the Project.

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8.4 Each Founder consents, to the extent permitted by Part IX of the Copyright Act 1968 (Cth), to acts or omissions in relation to any works comprising Project Intellectual Property that would otherwise infringe that Founder's moral rights.

8.5 Each Founder agrees to take all reasonable steps and sign all necessary documents to give effect to the assignment required under this clause.

8.6 This clause survives the termination or expiration of this Agreement.

§9 — DECISIONS AND MANAGEMENT

9.1 Except as otherwise provided in this clause, decisions between the Founders in relation to the Project will be made by a majority vote, with each Founder having one vote.

9.2 The following decisions may be made only with the unanimous written approval of all Founders:

(a) a decision to terminate or dissolve the Project;

(b) a decision to amend this Agreement;

(c) a decision to admit a new person or entity to acquire equity in the Project;

(d) a decision to borrow money on behalf of the Project;

(e) a decision to incur debt on behalf of the Project;

(f) a decision to set a budget for the Project;

(g) a decision to enter into any subsequent agreement with a Founder or an immediate family member of a Founder;

(h) a decision to assign any intellectual property.

§10 — RETIREMENT

10.1 Any Founder may retire from the Project by providing the following period of written notice to all other Founders: ________

10.2 If one or more Founders retire but at least one Founder remains active and the Project is not otherwise dissolved, the Project will continue.

10.3 Unless otherwise expressly agreed between the Founders, a retiring Founder will not be entitled to any payment or compensation from the Project or the other Founders.

§11 — DISSOLVING THE PROJECT

11.1 The Project may be dissolved:

(a) by unanimous consent of the Founders; or

(b) if no Founder remains as an active participant in the Project.

11.2 Where the circumstances in 11.1 ("the Dissolution Circumstances") apply, any person who was a Founder immediately prior to those circumstances arising may liquidate the Project and take all reasonable steps to cause the Project to sell its property, including any intellectual property.

11.3 If the Project is dissolved under this clause, all Founders will have the opportunity to purchase any property of the Project, including any intellectual property.

11.4 Where proceeds arise from the sale of the Project's property in connection with the dissolution ("the Proceeds"), the Proceeds will be distributed as follows:

(a) firstly, to pay all costs of dissolving and winding up the Project and to satisfy any debts of the Project;

(b) secondly, to repay all Founders who have contributed capital and not been repaid; and

(c) thirdly, any remaining Proceeds in equal shares to all persons or entities who were Founders at the time of dissolution.

11.5 Where the Project is conducted through an incorporated entity, any winding up will be carried out in accordance with the Corporations Act 2001 (Cth).

§12 — DISPUTE RESOLUTION

12.1 The Founders will use reasonable endeavours to resolve any dispute arising under or in connection with this Agreement by good faith discussion.

12.2 If a dispute is not resolved within ________ of written notice of the dispute, the Founders agree to refer the dispute to mediation administered by a mediator accredited under the National Mediator Accreditation System, with the place of mediation being ________, before commencing any court proceedings (except for urgent interlocutory relief).

§13 — LEGAL EFFECT AND GENERAL PROVISIONS

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13.2 This Agreement constitutes the entire understanding between the Founders in relation to its subject matter and supersedes all prior discussions, representations, negotiations and understandings, whether oral or written.

13.3 This Agreement may only be amended, varied or modified by a document in writing signed by all Founders.

13.4 If any provision of this Agreement is found to be invalid, illegal or unenforceable, that provision will be severed and the remaining provisions will continue in full force and effect.

13.5 This Agreement may be executed in counterparts, including by electronic signature in accordance with the Electronic Transactions Act 2000 (or its equivalent in the relevant State or Territory), each of which is taken to be an original and all of which together constitute one instrument.

13.6 This Agreement is governed by and construed in accordance with the laws of ________, and the Founders submit to the non-exclusive jurisdiction of the courts of that State or Territory and the courts competent to hear appeals from them.

SIGNED BY THE FOUNDERS on ________:

____________________________

________

In the presence of:

____________________________
Witness Signature

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Witness Name: ________

____________________________
Witness Occupation: ________

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Witness Address: ________

____________________________

________

In the presence of:

____________________________
Witness Signature

____________________________
Witness Name: ________

____________________________
Witness Occupation: ________

____________________________
Witness Address: ________