Founders' Agreement - Template, Sample Form to Complete Pro · US-law

FOUNDERS' AGREEMENT

State of ________

This Founders' Agreement (this "Agreement") is made and entered into as of ________ (the "Effective Date") by and among the undersigned founders (each a "Founder" and collectively, the "Founders").

RECITALS

WHEREAS, the Founders desire to associate together for the purpose of establishing and operating a business venture (the "Business Venture");

WHEREAS, the Founders have organized, or intend to organize, a limited liability company under the laws of the State of ________;

WHEREAS, such limited liability company is, or will be, registered under the name ________ (the "Business");

WHEREAS, the Founders desire to memorialize their mutual understanding regarding their respective rights, duties, contributions, and obligations with respect to the Business and the Business Venture; and

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

ARTICLE 1 ININESS

ARTICLE 1 — PRINCIPAL OFFICE AND MAILING ADDRESS

The principal office address and mailing address of the Business are as follows:

________

The principal office and mailing address of the Business may be changed from time to time as a majority of the Founders may designate in writing.

ARTICLE 2 — PURPOSE

The purpose and scope of the Business Venture is as follows:

________

The Business may engage in any other lawful act or activity for which a limited liability company may be organized under the laws of the State of ________.

ARTICLE 3 — OWNERSHIP AND CAPITAL CONTRIBUTIONS

Each Founder shall make the capital contribution set forth opposite such Founder's name and shall hold the membership/ownership interest indicated below:

Name: ________
Address:

________

Capital Contribution: $________ (________)
Ownership Percentage: ________%

Name: ________
Address:

________

Capital Contribution: $________ (________)
Ownership Percentage: ________%

No Founder shall be obligated to make any additional capital contribution beyond that set forth above except upon the prior written consent of all Founders. No interest shall accrue on any capital contribution, and no Founder shall have the right to withdraw or demand the return of any capital contribution except as expressly provided herein or as required by applicable law.

ARTICLE 4 — ROLES AND RESPONSIBILITIES

Each Founder shall undertake the duties and responsibilities described below, to be performed in good faith and in the best interests of the Business:

________:

________

________:

________

Each Founder shall devote such time and attention to the affairs of the Business as is reasonably necessary to discharge such Founder's duties, and shall act with the care, loyalty, and good faith owed by a member to a limited liability company under applicable law.

ARTICLE 5 — LOANS AND REIMBURSEMENT

(a) Any payment of funds by a Founder to the Business that is not expressly designated as a capital contribution shall be treated as a loan and a debt owed by the Business to such Founder. Such loan shall not increase the lending Founder's ownership interest in the Business and shall be repaid, together with interest at the rate of ________% per annum (or, if no rate is specified, the applicable federal rate then in effect), pursuant to a repayment schedule approved by a majority of the Founders.

(b) Each Founder shall be entitled to full reimbursement of reasonable and necessary out-of-pocket expenses incurred on behalf of the Business, provided that contemporaneous receipts or other supporting documentation are retained and made part of the Business' records.

ARTICLE 6 — VOTING AND DECISION-MAKING

Except as otherwise expressly provided in this Agreement, each Founder shall be entitled to one (1) equal vote on all matters submitted to the Founders for decision, regardless of ownership interest in the Business. Except where unanimity is expressly required herein, all decisions shall be made by majority vote of the Founders.

ARTICLE 7 — INTELLECTUAL PROPERTY

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ARTICLE 8 — CONFIDENTIALITY

The Founders acknowledge that, in the course of creating and operating the Business and the Business Venture, they will have access to and become acquainted with confidential and proprietary information belonging to the Business, including but not limited to trade secrets, business plans, financial information, customer and supplier lists, marketing strategies, and other non-public information ("Confidential Information").

Each Founder agrees to hold all Confidential Information in strict confidence and not to disclose, use, or permit the use of any Confidential Information for any purpose other than for the benefit of the Business, both during the term of this Agreement and following any termination, resignation, or dissolution.

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Each Founder agrees that any breach of this Article may cause irreparable harm to the Business for which monetary damages would be inadequate, and that the Business shall be entitled to seek injunctive relief, without the necessity of posting bond, in addition to any other remedies available at law or in equity.

The obligations of confidentiality set forth in this Article shall survive the termination, resignation, or dissolution of any Founder and the cancellation or termination of this Agreement.

ARTICLE 9 — NON-COMPETITION AND NON-SOLICITATION

(a) During the term of this Agreement and for a period of ________ following the termination, resignation, or dissolution of a Founder, no Founder shall, directly or indirectly, within the geographic area of ________, engage in, own, manage, operate, or have any financial interest in any business or activity that competes with the Business or the Business Venture, without the prior written consent of the remaining Founders.

(b) During the same period, no Founder shall, directly or indirectly, solicit or attempt to solicit any customer, client, employee, contractor, or supplier of the Business for the benefit of any competing enterprise.

(c) The Founders agree that the restrictions set forth in this Article are reasonable in scope, duration, and geographic area, and are necessary to protect the legitimate business interests of the Business. If any court of competent jurisdiction determines that any such restriction is unenforceable, the restriction shall be reformed and enforced to the maximum extent permitted by applicable law. This Article shall be enforced only to the extent permitted by the law of the governing state, and shall be of no effect to the extent such covenants are prohibited or void under applicable law.

ARTICLE 10 — DISPUTE RESOLUTION

In the event of any dispute between or among the Founders relating to the Business or the Business Venture, the Founders shall first attempt to resolve the dispute personally and in good faith. If such efforts fail, the Founders shall submit the dispute to non-binding mediation administered by a mutually agreed mediator, with the costs of mediation shared equally, prior to commencing any litigation. Each Founder irrevocably consents to the exclusive jurisdiction and venue of the state and federal courts located in ________, State of ________, for any action arising out of or relating to this Agreement.

ARTICLE 11 — TERMINATION OF FOUNDER

A Founder may resign from the Business or the Business Venture at any time upon not less than thirty (30) days' prior written notice to the other Founders. The payout, if any, to the resigning Founder shall be determined by mutual agreement of the remaining Founders based on the net positive worth of the Business as of the effective date of resignation. Upon resignation, the resigning Founder's roles and responsibilities shall cease, but such Founder's obligations under Articles 7, 8, and 9 shall survive.

ARTICLE 12 — DISSOLUTION

The Business may be dissolved upon the unanimous written agreement of the Founders, effected through a valid vote.

Upon dissolution, the Founders shall participate in the orderly winding up of the Business, which may include satisfying or making provision for creditors, liquidating assets, terminating or assigning outstanding contracts, and taking any other actions the Founders deem appropriate. The assets of the Business shall be distributed in accordance with applicable law, first to creditors (including Founders who are creditors), and thereafter to the Founders in proportion to their respective ownership percentages.

If the Business is registered with a Secretary of State, final termination requires the filing of articles or a certificate of dissolution or cancellation with the relevant Secretary of State.

ARTICLE 13 — TERMINATION OF AGREEMENT

This Agreement may be canceled or terminated by unanimous written consent of the Founders, including upon the adoption of a superseding organizational governance document for the Business, such as Articles of Incorporation, Articles of Organization, an Operating Agreement, a Shareholders' Agreement, or any other foundational governing document. Upon such termination, the provisions of Articles 7, 8, and 9 shall survive to the extent provided therein.

ARTICLE 14 — GENERAL PROVISIONS

a. Right to Counsel. Each Founder has been advised of the right to seek independent legal counsel prior to executing this Agreement. Each Founder has either obtained such counsel or knowingly waives the right to do so and enters into this Agreement freely and voluntarily.

b. Language. All communications and notices made pursuant to this Agreement shall be in the English language.

c. Severability. If any provision of this Agreement is held invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect and shall be enforced to the maximum extent permitted by law.

d. Entire Agreement. This Agreement constitutes the entire understanding among the Founders with respect to the subject matter hereof and supersedes all prior or contemporaneous agreements or understandings, whether written or oral.

e. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of ________, without giving effect to any choice or conflict of law provision or rule.

f. Amendment. This Agreement may be amended only by a writing signed by each and all of the then-current Founders.

g. Headings. Headings of Articles and subsections are for convenience only and shall not affect the interpretation of any provision of this Agreement.

h. Counterparts. This Agreement may be executed in counterparts, including by electronic signature and electronic transmission, each of which shall be deemed an original and all of which together shall constitute one and the same instrument, effective as of the Effective Date.

i. Notices. All notices, requests, consents, claims, demands, waivers, and other communications hereunder (each, a "Notice") shall be in writing and delivered by email, personal delivery, nationally recognized overnight courier (fees prepaid), or certified or registered mail (return receipt requested, postage prepaid) to the addresses the Founders may designate. A Notice is effective only if (a) the receiving Founder has received the Notice and (b) the sending Founder has complied with the requirements of this subsection.

j. Successors and Assigns; No Assignment. This Agreement shall be binding upon and inure to the benefit of the Founders and their respective heirs, executors, administrators, successors, and permitted assigns. No Founder may assign or transfer any rights or obligations under this Agreement without the prior written consent of all other Founders.

k. Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by the waiving Founder, and no waiver shall constitute a continuing waiver or a waiver of any other provision.

EXECUTION

IN WITNESS WHEREOF, the Founders have executed this Agreement as of the Effective Date.

Founder Name: ________

Signature: _______________________

Date: ________

Founder Name: ________

Signature: _______________________

Date: ________