Founders' Agreement - Template, Sample Form to Complete

Founders' Agreement

State of Alabama

This Founders' Agreement (hereinafter "Agreement"), made by and between the founders signed below ("Founders"), is executed as of ________ (the "Effective Date").

RECITALS:

WHEREAS the Founders who have signed below are creating a Business Venture (defined below) together;

WHEREAS, the Founders have created a limited liability company, organized under the laws of the state of Alabama;

WHEREAS, the limited liability company is registered as: ________ (the "Business");

WHEREAS, the Founders wish to memorialize an agreement between them regarding their rights;

NOW, therefore, in consideration of the promises and covenants contained herein, as well as other good and valuable consideration (the receipt and sufficiency of which is hereby acknowledged), the Founders do hereby agree as follows:

ARTICLE 1 - ADDRESS OF BUSINESS:

The mailing address and the street address (principal office address) for the Business are as follows:

________

The principal and mailing address of the Business may change as the Founders may designate.

ARTICLE 2 - PURPOSE:

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

________

ARTICLE 3 - OWNERSHIP & CAPITAL CONTRIBUTIONS:

Name: ________
Address:

________

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

Name: ________
Address:

________

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

ARTICLE 4 - ROLES & RESPONSIBILITIES

Each founder will have a different role in the constitution of the Business, as follows:

________:

________

________:

________

ARTICLE 5 - LOANS & REIMBURSEMENT:

For any payment of funds from a Founder to the Business not specifically stated to be a capital contribution, that payment will be treated as a debt owed by the Business to the Founder. Such debt shall not increase the lending Founder's ownership interest in the Business and will be paid back with interest according to a schedule determined by a majority of Founders, which may be determined through a vote.

For any expenses incurred by Founders related to the Business, Founders will receive full reimbursement provided receipts are kept and made part of the Business' records.

ARTICLE 6 - VOTING:

Each Founder shall receive equal votes, regardless of ownership interest in the Business.

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 lists, marketing strategies, and other non-public information ("Confidential Information").

Each Founder agrees to hold all Confidential Information in strict confidence and to not 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.

Confidential Information shall not include information that (a) is or becomes generally available to the public other than as a result of a breach of this Agreement; (b) was lawfully in the possession of a Founder prior to disclosure; or (c) is required to be disclosed by law, regulation, or valid court order, provided that the disclosing Founder gives prompt written notice to the other Founders.

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 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 cancelation or termination of this Agreement.

ARTICLE 9 - NON-COMPETE:

During the term of this Agreement and for a reasonable period thereafter, no Founder shall, directly or indirectly, engage in or have any interest in any business or activity that competes with the Business or the Business Venture, nor shall any Founder solicit or attempt to solicit any customers, clients, employees, or contractors of the Business for the benefit of any competing enterprise, without the prior written consent of the remaining Founders.

ARTICLE 10 - DISPUTE RESOLUTION:

In case of a dispute between the Founders relating to the Business Venture or Business, the Founders shall first attempt to resolve the dispute personally and in good faith. If these personal resolution attempts fail, the Founders shall then submit the dispute to mediation prior to the filing of any suit. The Founders each and all agree to submit any lawsuit to the state and federal courts within the state of Alabama.

ARTICLE 11 - TERMINATION OF FOUNDER:

Founders may resign from the Business or Business Venture at any time upon thirty days' written notice to the other Founders. Payout of the resigning Founder will be determined by mutual agreement of the remaining Founders, based on the net positive worth of the Business or Business Venture at the time of resignation.

ARTICLE 12 - DISSOLUTION:

Dissolution of the Business may occur if the Founders unanimously decide to dissolve the Business and the Business Venture and do so through a valid vote.

If the Business is dissolved, the Founders must participate in the winding up of the Business. Duties in winding up may include satisfying any creditors, liquidating assets, ensuring the cancelation of outstanding contracts, and any other actions the Founders deem appropriate.

If the Business is registered, final termination of the Business requires any state registration provided to the relevant Secretary of State to be canceled.

ARTICLE 13 - AGREEMENT CANCELATION:

This Agreement may be canceled or terminated by unanimous written consent of the Founders if an organizational business document is created outlining relevant oversight of the Business, such as an Articles of Incorporation, Articles of Organization, Operating Agreement, or any other foundational business document.

ARTICLE 14 - GENERAL PROVISIONS:

a. Right to counsel. All Founders have been advised of their right to seek independent counsel prior to signing this Agreement. All Founders have either sought such counsel or waive their right to do so and enter into this Agreement freely and of their own volition.

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

c. Severability. If any part or subpart of this Agreement is held invalid or unenforceable by a court of law, the remaining parts and sub-parts will be enforced to the maximum extent possible. In such condition, the remainder of this Agreement shall continue in full force.

d. Entire agreement. This Agreement constitutes the entire understanding between the Founders and the LLC with respect to the subject matter covered herein. This Agreement supersedes and replaces all prior or contemporaneous agreements or understandings, written or oral, regarding the LLC.

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

f. Amendment. This Agreement may only be amended if agreed to in writing by each and all of the then-current Founders.

g. Headings for convenience only. Headings of parts and sub-parts under this Agreement are for convenience and organization, only. Headings shall not affect the meaning of any provisions of this Agreement.

h. Counterparts. This Agreement may be executed in counterparts, all of which shall constitute a single agreement. The Agreement shall be effective as of the date set forth above.

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EXECUTION:

________

Signature:_______________________

________

Signature:_______________________