Attachment Co-Founders Agreement Template Detailed

1st page being e-stamp paper
CO-FOUNDERS AGREEMENT
This CO-FOUNDERS AGREEMENT is executed at [●] on [●] [insert date].
BETWEEN
[●] , bearing PAN # [●] and residing at [insert address], (hereinafter referred to as “Co-
Founder 1”) which expression shall, unless it be repugnant to the subject or context
thereof, include their legal heirs, successors, nominees and permitted assignees, of the First
Part;
AND
[●] , bearing PAN # [●] and residing at [insert address], (hereinafter referred to as “Co-
Founder 2”) which expression shall, unless it be repugnant to the subject or context
thereof, include their legal heirs, successors, nominees and permitted assignees of the
Second Part.
AND
[●], bearing PAN # [●] and residing at [●], (hereinafter referred to as “Co-Founder 3/
Admitted Co-Founder”) which expression shall, unless it be repugnant to the subject or
context thereof, include their legal heirs, successors, nominees and permitted assignees of
the Third Part.
Each of the parties shall be individually referred to as a ‘Co-Founder’ and collectively as

the ‘Co-Founders’.
WHEREAS:
A. Mr. [●] and [●] (hereinafter referred to as the “Initial Co-Founders”) are the Co-
Founders and Directors of [●] Private Limited having its registered office at [●]
(hereinafter referred to as “Company”).
B. The Company is incorporated under the laws of India and is engaged in the business
of [description of the business]. (hereinafter referred to as Business).
C. [●] is working with the Company from [insert date] as a Consultant and the Initial
Co-Founders have offered [●] to become a Co-Founder and [●] has accepted to
become a Co-Founder in the Company as per the terms of this Agreement.
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suitable action under applicable law.
D. The Authorised share capital of the Company is Rs. 1,00,000/- (Rupees One lakh
only) divided into 10,000 equity shares of Rs. 10 (Rupees Ten) each. The Paid Up
Capital of the Company is Rs. 1,00,000/- (Rupees One lakh only) divided into
10,000 equity shares of Rs. 10 (Rupees Ten) each.
E. The Company has commenced its business from [insert date] and would like to
expand and grow in an accelerated rate.
F. The Co-Founders have agreed to work towards the expansion of the business of the
Company.
G. The Co-Founders have decided to enter into this agreement to crystallize the terms
of their relationship with one another.
IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AS

FOLLOWS:
1. APPOINTMENT OF NEW CO-FOUNDER

1.1. Parties have identified a prospective business opportunity in the area in which the
Company is operating and have agreed to work together. The Board of Directors
of the Company has accepted the admission of the Admitted Co-Founder as the
Co-founder of the Company as per the terms of this Agreement.
1.2. The Admitted Co-Founder shall jointly participate in the management and
operational decision-making processes of the Business, and in execution of the
business strategy, as explained in this agreement.
1.3. Any costs incurred by any of the Co-Founders for and on behalf of the Company,
personal loans of the Co-Founders or their friends, family, relatives or any angel
investor to the Company will be reimbursed from the revenues, if any, in
accordance with a budget that has been preapproved by the CEO.
1.4. On the date of execution of this Agreement, the following events will take place:
i. The Company shall pass a Board Resolution and General Meeting to
appoint Admitted Co-Founder as the Director of the Company. The
Initial Co-Founders, who are also the majority shareholders of the
Company, shall ensure that the above resolution is passed.
ii. Admitted Co-Founder shall join as the Co-Founder of the Company as
per the terms of this Agreement.
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iii. The Company shall adopt the Amended and Restated Articles of the
Company to reflect the terms of this Agreement.
iv. File necessary forms and documents with the jurisdictional Registrar of
Companies within the prescribed time-limits.
2. TERM AND VALIDITY OF THIS AGREEMENT
2.1 This agreement shall govern the relationship between the Company and the Co-
Founders. The Company will continue perpetually, unless dissolved in accordance
with this agreement.
2.2 Unless a Co-Founder is dismissed or retired as explained later in this agreement,

or has stopped working for the Company, the Co-Founders shall ensure that the
commercial understanding in this agreement (particularly the provisions with
respect to the economic interest and capital contribution) is factored into the
current and all subsequent documentation constituting their business, such as
Articles of Association of a company.
2.3 Any amendments to this document shall only be made in writing in form of a new
agreement if so desired. New Co-Founders may be added in the future with the
consent of all the Co-Founders. In case of admission of new Co-founders, the
equity of the Co-founders may dilute in the same proportion as held by the Co-
founders at the time of executing the new amended agreement.
3. RESPONSIBILITIES OF THE CO-FOUNDERS
3.1 The Co-Founders will share general responsibility for the reputation and the
economic growth of the business. Currently, specific responsibilities of the Co-
Founders are as follows:
3.2 Co-Founder 1:
Responsibilities:
a) He shall assume the title of Co-Founder of the Company and be a member

of the founding team.
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b) He shall further be appointed to the role of Director and [insert

designation].
c) He will be responsible for Business development, Sales, marketing and

product development.
3.3 Co-Founder 2:
Responsibilities:
a) He shall assume the title of Co-Founder of the Company and become a

member of the founding team.
b) He shall, further be appointed to the role of a Director and [insert

designation].
c) He will be responsible for content and product development.
3.4 Co-Founder 3:
Responsibilities:
a) He shall assume the title of Co-Founder of the Company and become a

member of the founding team.
b) He shall, further be appointed to the role of [insert designation].
c) He will be responsible for technology and product development
3.5 The above allocation is not strict and responsibilities on some of the above areas
may be shared with other Co-Founders. Wherever necessary, each Co-Founder
shall co-operate with each other and provide necessary help to other Co-Founders
towards discharging their specific responsibility, for the overall benefit of the
Business.
3.6 The roles mentioned above may be modified from time to time depending on the
needs of the Business and based on mutual understanding of all the Parties. The
modification may even be recorded or evidenced by electronic communication.
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4 MUTUAL RIGHTS AND OBLIGATIONS OF THE CO-FOUNDERS
4.1 In their capacity as a co-founder of the business, the Co-Founders shall be

expected to participate in team discussions and development of plans. They will
have the following rights:
i. The right to be represented as a co-founder of the Company in

all communications and publicity materials
ii. Right to participate in discussions pertaining to the company
iii. Right to be involved in developing future expansion plans and

strategies
iv. Right to inspect the books of accounts
v. Right to be treated fairly
vi. Right to have the terms of this agreement incorporated into a

subsequent business structure.
5 CAPITAL CONTRIBUTION AND PROFIT-SHARING
5.1 The Initial Co-Founders have initially contributed the following amounts as their
share of capital in the business:
i. Co-Founder 1: [●]
ii. Co-Founder 2: [●]
5.2 Any excess amounts of capital shall be contributed by the Co-Founders in two
ways – in proportion of their equity share holdings or by way of loan carrying 10%
(ten percent) simple interest.
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5.3 The Board of Directors, at its sole discretion, shall decide what percentage of
profits will be paid out, if any, as dividend in a particular year.
5.4 Company may (but is not required to) make ordinary distributions to the Co-
Founders out of cash received by the Company (excluding new capital
contributions or loans), less all accounts payable and reserves against anticipated
expenses from time to time as determined by a majority of Co-Founders. All
distributions must be made in the following order:
i. First, in equal proportion to all Co-Founders who have
contributed cash that has not been repaid, until each Founder has
been paid out to the extent of such contributions in full;
ii. Second, to all Co-Founders in accordance with each Co-
Founder’s positive capital account balance; and
iii. Third, to all Co-Founders in proportion to their respective
ownership interests.
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6 RESTRAINT ON COMPETING BUSINESS

6.1 The Co-Founders shall be expected to involve themselves full-time in the carrying
out of their responsibilities towards the Business and agree that they will not carry
out any other activity for remuneration or charity irrespective of whether it
competes with the Business in any way whatsoever or not or to participate in any
outside business relationships, which may involve a conflict of interest, and in the
event that a Co-Founder discovers that a potential or actual conflict exists he will
immediately inform other Co-Founders of such discovery. However, a Co-Founder
may work part-time, take up other opportunities or projects and as long as it
doesn’t impact deliverables in the Company or it is in direct competition with the
Company, after mutual discussion and other Co-Founders’ written consent.
6.2 The Co-Founders shall not, directly or indirectly, during the period of this
Agreement and for a period of 1 (one) year after they decide to leave the Company
and terminate this Agreement- either by themselves or in association with or
through any Person or in any capacity whatsoever including but not limited to
owning an interest in, directly or indirectly (through a holding company or
otherwise), any individual proprietorship, partnership, corporation, joint venture, or
any other form of business entity, whether as an individual proprietor, partner,
shareholder, joint venture or as an officer, director, consultant, finder, broker,
employee, or in any other manner whatsoever (except on behalf of the Company):
(a) work as an employee or independent contractor or become a partner, director,
investor or lender or hold shares or ownership interests of a company or entity,
directly or indirectly, engaged in a Competing Business; (b) carry on, own,
manage, operate, join, assist, have an interest or control in any business or Person
which directly or indirectly competes with the Business; (c) on their own account
or as an agent of any Person canvass or solicit for any Competing Business. A
Competing Business, for the purposes of this Clause means any business, which the
Company is engaged in, or has actively engaged in or proposes to engage in.
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6.3 The Co-Founders acknowledge that their position with the Company requires and
will continue to require the performance of services that are special, unique,
extraordinary and of an intellectual character and has placed and will continue to
place them in a position of confidence and trust with the employees, customers and
associates of the Company, and accordingly that the restrictive covenants above are
reasonable and necessary in order to protect and maintain the goodwill acquired by
the Company. They further acknowledge that the investment by the Parties as
contemplated in this Agreement is adequate consideration for the restrictions
contained herein.
6.4 The Co-Founders hereby acknowledges that the restrictions under this Clause are
fair and reasonable as to subject matter, geographical scope and duration, and are
reasonably necessary to protect the interests of the Company and also to protect the
value of the business of the Company and associated goodwill.
6.5 The Co-Founders further acknowledge that any breach of any provision of this
Clause 6 by them would cause irreparable harm to the Company and that monetary
damages would not be sufficient or adequate to protect the Company’s interests
under this Clause 6, and therefore irrevocably agrees that the Company shall in
addition to all other applicable remedies be entitled to, injunctive relief to prevent a
breach or specific performance of this Clause 6 or other equitable remedy.
7 PROFIT-SHARING, SALARY AND DRAWINGS
7.1 A monthly remuneration has to be paid to the Co-Founders, from the business in
the following manner:
i. Co-Founder 1 – [●]
ii. Co-Founder 2 – [●]
iii. Co-Founder 3 – [●]
7.2 The Co-Founders agree that a Co-Founder will be reimbursed for reasonable
travel and related expenses incurred by him in the course of performing services
as per the terms of this Agreement, provided, however, for any expenses above
INR 2000 (Rupees Two Thousand Only), the Co-Founder must take a prior
permission of the Board of Directors. For all such expenditure, a Co-Founder shall
submit a proof of such cost and expenditure made to the Company. However, no
reimbursement will be provided for visiting the Registered or Corporate office of
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the Company.
7.3 The Co-Founders shall enjoy all such benefits normally granted to the employees
of the Company.
7.4 Unless all the Co-Founders decide by consensus to share the profits in a different
manner, profits will be ordinarily shared in the ratio of their economic interest in
the Business as per their shareholding percentage in Clause 8.
8 OWNERSHIP AND SHARES

8.1 The Shareholding Pattern of the Company as on the date of execution of this
Agreement is as below:
Sl. Person / Entity Number of shares held Shareholding

No. in the Company Percentage
1. [●]
2. [●]
3. [●]
8.2 Post completion of vesting of the shares as per the terms of this Agreement, the
shareholding pattern, will be as follows:
Sl. Person / Entity Number of shares held Shareholding

No. in the Company Percentage
1. [●]
2. [●]
3. [●]
4. [●]
8.3 Grant of shares to Admitted Co-Founder:
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The Company will grant to the Admitted Co-Founder up to a maximum of

[number] shares (equivalent to [●] % of the equity shares of the Company) at the
face value of the shares (“Shares”).
8.4 Subject to the other clauses in this Agreement, the Admitted Co-Founder shall be
granted the Shares defined in Clause 8.3 as per the following schedule:
a) Until and through [[FIRST VESTING DATE]], none of the Shares will be
granted
b) On and not before [[FIRST VESTING DATE]]– 34% of the Shares will be
granted.
c) On and not before the 1st of every quarter thereafter, 8.25% of the
remaining 66% of the Shares will be granted.
d) Thus, on [[END DATE]] (the "Full Vesting Date"), the Shares will be
100% granted.
[Grant of options to the Admitted Co-Founder:
The Company will grant to the Admitted Co-Founder options to purchase up to a

maximum of [number] shares (equivalent to 22% of the equity shares of the
Company) at the face value of the shares (“Options”). Each option shall give the
right to purchase one equity share of the Company.
Options shall vest as per the following schedule:
e) Until and through [[FIRST VESTING DATE]], none of the Admitted Co-
Founder’s Options will vest
f) On and not before [[FIRST VESTING DATE]]– 25% of the Admitted Co-
Founder’s Options will vest
g) On and not before the 1st of every quarter thereafter, 6.25% of the
remaining 75% of the Admitted Co-Founder’s Options will vest
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h) Thus, on [[END DATE]] (the "Full Vesting Date"), the Admitted Co-
Founder’s Options will be 100% vested.
All options must be exercised by the Admitted Co-Founder within 3 months of

vesting of such option (Exercise Period). In case the option is not exercised by the
Admitted Co-Founder, his option will lapse and no right will accrue after such
date.]
8.5 The Co-Founders shall not sell, assign, transfer, pledge or otherwise dispose of,
whether directly or indirectly, any Shares or any interest therein without
complying with the terms of this Agreement.
8.6 Subject to the restrictions on Transfer of the Shares held by the Co-Founders
elsewhere in this Agreement, if at any time, any of the Co-Founders propose to
Transfer any of the Shares held by them (the “Sale Shares”) to any Person (the
“Proposed Buyer”) (excluding the transfer of Shares between the Co-Founders),
such Co-Founder/s (“Selling Co-Founder”) shall, in the manner specified herein,
first offer to the other Co-Founders all the Sale Shares on the same terms and
conditions upon which such Sale Shares are proposed to be Transferred to the
Proposed Buyer. The offer to the other Co-Founders under this Clause 8.6 shall be
by way of a notice in writing (the “Transfer Notice”) which shall:
(a) Specify:
i. The number of Sale Shares;
ii. The price at which the Selling Co-Founder intends to Transfer such Sale
Shares;
iii. The identity of the Proposed Buyer; and
iv. Other terms and conditions of the proposed Transfer;
(b) Contain a confirmation to the other Co-Founders that (i) the Selling Co-
Founder has made an offer to or received an offer from the Proposed Buyer to buy
the Sale Shares, and (ii) the Proposed Buyer has been made aware of the rights of
the other Co-Founders and the obligations of the Selling Co-Founder under this
Agreement; and
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(c) Be accompanied by an undertaking from the Selling Co-Founder whereby such

Selling Co-Founder certifies that the particulars contained in the Transfer Notice
are true, accurate and complete.
(d) Within [30 (thirty)] days of receipt of the Transfer Notice, the other Co-
Founders shall have the right to purchase the Sale Shares, at the price mentioned
in the Transfer Notice, by each of them serving a written notice to the Selling Co-
Founder (the “ROFR Notice”). The other Co-Founders shall decide inter se upon
the number of Sale Shares which each of them shall purchase and the number of
such Sale Shares shall accordingly be mentioned in the ROFR Notice delivered by
each Co-Founder. In the event that the Co-Founder/s serve the ROFR Notice, the
Transfer of the Sale Shares mentioned in each ROFR Notice shall be completed
within [30 (thirty)] days from the date of delivery of such ROFR Notice by the
respective Co-Founder.
(e) In the event that all the Co-Founders reject such offer, or neither Co-Founders
serves the ROFR Notice within [30 (thirty)] days of receipt of the Transfer Notice,
the Selling Co-Founder shall have the right, subject to Clause 8.6, to Transfer the
Sale Shares to the Proposed Buyer within a period of [30 (thirty)] days from the
earlier of (a) expiry of [30 (thirty)] days of receipt of the Transfer Notice, or (b)
receipt of rejection from the Co-Founders, provided that:
i) The price and terms on which the Sale Shares are Transferred to the Proposed
Buyer are no more favourable to the Proposed Buyer than the price and terms
offered to the Co-Founders in the Transfer Notice; and
ii) The Proposed Buyer executes a Deed of Adherence simultaneously with the
Transfer of the Sale Shares.
(f) However, the Selling Co-Founder will not be able to transfer the shares to a
direct or indirect competitor of the Company, even if the other Co-Founders has
refused to purchase the vested shares.
8.7 Company will seek written approval or have a meeting of the Board of Directors
to authorize the issuance of such shares or transfer of shares within 30 days of the
grant, issuance or transfer of shares.
8.8 The Co-Founders with mutual consent of all the Co-Founders may issue new
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shares or options to purchase shares to the Advisors of the Company.
9 MINIMUM COMMITMENT OF CO-FOUNDERS
9.1 The Initial Co-Founders agrees to be committed to the Business for a minimum
period of 1 (one) year from the date of signing of this Agreement (“Minimum
Commitment Period”).
9.2 The Admitted Co-Founder agrees to be committed to the Business for a minimum
period of 4 (four) years from the date of signing of this Agreement (“Minimum
Commitment Period”).
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10. PERFORMANCE GOALS AND CONSEQUENCES OF NON-

PERFORMANCE
10.1. Performance goals shall be mutually decided by the Co-Founders. The
[CEO] shall have the sole ability to determine whether the other Co-Founders’
performance has been satisfactory as per the performance metrics specified in the
Schedule. This will be done in a quarterly meeting with the Co-founders. Any
differences or opinions pertaining to underperformance will be escalated and
discussed on a prompt basis between the Co-Founders. In case of failure to meet
the Deliverables, the Co-Founders may be given sufficient opportunity to make up
for any shortfall in performance. A new Annexure will be signed with new
deliverables defined, as an Addendum to this Agreement during the first week of
every new quarter.
10.2. Continuous non-performance, non-availability or inability to perform duties
without satisfactory justification, despite necessary intimations shall render the
Co-Founders liable to expulsion by way of an E-mail or Notice after a meeting of
the Co-Founders. Any disputes with regard to the expulsion of a Co-founder will
resolved by way of Arbitration as specified in Clause 19 of this Agreement.
11. BOARD SEATS FOR CO-FOUNDERS
11.1. The Board shall consist of three Directors. [●],[●] and [●]shall be on the
Board of the Company. [Name of the co-founder] shall be appointed as the
Managing Director of the Company. The Board of Directors may appoint other
Directors as and when required. [●],[●] and [●] shall be non-retiring directors.
Any decision by the Board of Directors shall be taken unanimously. In case of
difference of opinion between the Directors, the decision of the majority of the
Co-Founders shall be held final and binding.
12. MANAGEMENT AND APPROVAL RIGHTS
12.1. The Company will be managed by the Board of Directors of the Company,
and a majority of Board of Directors of the Company may take any action on
behalf of the Company except where explicitly stated otherwise in this agreement.
The unanimous written approval of all the Co-Founders is required to:
a) Sell, transfer or in any other way dispose of all or a substantial part of its
business, its undertaking, property, intellectual property rights, or other assets
whether by a single transaction or a series of transactions related or not;
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b) Altering rights attached to shares;

c) Issuance or allotment of shares;
d) Increase, reduce or cancel shares;
e) Infusion of fresh capital;
f) Merge with another company or acquire another company;
g) Remove a director;
h) Appointment of any additional director other than the initial directors;
i) Change the nature of the Business of the Company;
j) Entering into joint-venture arrangement with third parties;
k) Payment of dividends;
l) Provide any loan other than an amount or credit given in the normal course of
business or loans given to employees of the Company under the Company’s
rules;
m) Commence any material litigation or arbitration proceedings other than in the
ordinary course of business or for the purpose of collecting book or trade debts
owing to the Company or any subsidiary;
n) Pass any resolution for the voluntary winding up of the Company;
o) Settle any debts, outstanding, loans and advances given/due to the Company,
exceeding Rupees One Lakh;
p) Any other act deed or thing statutorily required to be passed in the meeting of
the Board.
q) Alter the articles of association of the Company;
r) Change of name of the Company;
s) Enter into any commitment for capital expenditure in excess of Rupees Twenty
lakh or its equivalent;
t) Obtain a loan in excess of Rupees Twenty Lakhs;
u) Create any mortgage, debenture or other encumbrance over assets of the
company;
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v) amend this agreement.

12.2. The finances of the Company shall be managed through the Bank Accounts
which shall be in the name of the Company and would require signatures of atleast
two of the Co-Founders.. Co-Founders may, however, agree to make payment up
till a certain ceiling, by a separate resolution passed by the Board of Directors of
the Company. Any payment beyond the ceiling must be signed by all the three Co-
Founders.
13. VOLUNTARYRETIREMENT, EXPULSION AND RESTRICTIONS
13.1 The Board of Directors may immediately terminate a Co-Founder from

Directorship/Employment due to his continuous non-performance, non-
availability or inability to perform duties without satisfactory justification,
dishonest or unethical conduct damaging to the business or reputation of other Co-
Founders, serious breach of discipline in course of performance of duties at
workplace or otherwise, including sexual harassment, as well as commission of a
crime involving moral turpitude, for breach or threatened breach of any of the
provisions of this Agreement or for reasons of cause resulting from any actions
whatsoever by him deemed to be either illegal or morally detrimental to the
welfare of Company’s standing or reputation within the business community or
the Co-Founder has been declared insolvent or the Co-founder has been declared
insane by a competent court of law.
13.2 If the Company terminates a Co-Founder under Clause 13.1 or a Co-Founder
voluntarily wishes to leave the Company before the Minimum Commitment
Period mentioned in Clause 9, or is unwilling or unable to stay committed to the
Company on a full-time basis or terminates the Agreement otherwise before the
completion of the Minimum Commitment Period as mentioned in Clause 9 of this
Agreement, shares remaining unvested as of the Termination Date shall be
cancelled.
13.3 The Outgoing Co-Founder will have to deposit all the data in form of business
documents, legal documents, files, databases, Layouts, Marketing strategies,
blueprints, plans, projections, forecast, charts, lists, reproductions or any other
data, tables, calculations, diaries, notes or books and correspondences or any other
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property, assets, monies or belongings of the Company;

13.4 Expulsion or voluntary retirement before the minimum commitment period is
completed pursuant to Clause 9 or this Clause 13 will deprive the outgoing Co-
Founder of his ‘co-founder’ status in the Company.
14 CONSEQUENCES OF DEATH
14.1 In the event of death of a Co-Founder, the following procedure shall be adopted:
i. Shares shall be subject to a fair valuation conducted by the
Chartered Accountant by a fair valuation method.
ii. 50% of the vested shares of the Co-Founder shall devolve to the
successors of the deceased Co-Founder, without conferring any
managerial or operational rights in the conduct of the Business.
Subjected to the other terms of this Agreement, the successors of
the deceased Co-Founder shall have the sole right to decide on
whether to transfer or sell the shares to other Co-Founders or any
other third parties.
iii. The remaining 50% of the shares shall be purchased in the
following manner:
• the surviving Co-Founders proportionately, or
• a ratio that is mutually decided depending on the
financial ability of the surviving Co-Founders, or
• if the Co-Founders are unable or unwilling to buy, the
economic interest shall devolve to the successors of the
deceased Co-Founder, without conferring any managerial
or operational rights in the conduct of the Business.
15 CONSEQUENCES OF DISABILITY
15.1 In the event of termination of the Agreement due to the Co-Founder's disability
(physical or mental), the Co-founder shall be entitled to the salary pro-rated to the
date of termination.
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15.2 The vested shares will remain with the Co-founder and the vested shares may be
transferred, sold as per the other terms of this Agreement.
15.3 The unvested shares may be purchased in the following manner:
• First by the surviving Co-Founders proportionately, or
• Second, in a ratio that is mutually decided depending on the

financial ability of the surviving Co-Founders.
16 PROVISIONS RELATING TO INSTITUTIONAL OR ANGEL

FUNDING/INVESTMENT
16.1 The Co-Founders shall have a pro-rata right, based on their respective percentage
equity ownership on a fully diluted basis, to participate in subsequent equity
financings of the Company on the same terms as that of the new investment.
16.2 At the time of any Institutional or Angel funding into the Company, the Co-
Founders shall dilute their respective equity during such round of Institutional /
Angel funding on pro-rata basis.
17 DISSOLUTION
17.1 If the Co-Founders determine by unanimous consent to dissolve, liquidate the
Company and wind up its affairs, then any persons who were Co-Founders
immediately prior to the dissolution event will cause the Company to sell all its
property (including Intellectual Property) for cash only, and to liquidate in an
orderly fashion. All Co-Founders must be afforded the first opportunity to bid on
any Intellectual Property in connection with such liquidation process. The
Company will distribute any cash that remains after paying for the expenses of
dissolving and winding up, and repaying all indebtedness owed by the Company, as
follows:
● First, all unpaid salary and other reimbursements.
● Second, all the loans advanced by the Co-Founders along with interests and
unpaid salary and other reimbursements.
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● Third, equity as adjusted with the profits or losses of the Company.
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18 EMPLOYEE STOCK OPTIONS

18.1 The Co-Founders agrees to create an employee stock option plan of the Company
and to provide for the eligibility criteria for the issue of employee stock options
linked to performance target achievements (“ESOP Scheme”). The Parties agree
that, a total of 5% of the Share Capital of the Company (being [1000 (One
Thousand))] Equity Shares shall be reserved for issue of stock options to the
employees of the Company in accordance with the ESOP Scheme. The Co-
Founders agree to dilute their shares/economic interest in pro-rata basis as per their
shareholding/economic interests.
18.2 The Co-Founders also agree to dilute their shares/economic interest in pro-rata
basis as per their shareholding/economic interests in case shares are issued or
granted to the Advisors of the Company.
19 DISPUTE RESOLUTION AND JURISDICTION
19.1 The Parties hereby agree that they will, at all times, act in good faith and make all
attempts to resolve all differences howsoever arising out of or in connection with
this Agreement by discussion. If within 30 days of the commencement of the
discussions, the dispute is not resolved, the dispute under this Agreement shall be
settled by arbitration by a sole arbitrator, as per Arbitration and Conciliation Act,
1996. The language of the arbitration shall be English. The arbitrator’s fee shall be
capped at [INR 50,000] and the award must be issued within 60 days of the notice
to initiate arbitration.
19.2 For any issue with the Arbitral Award or any other legal issue that arises in relation
to this Agreement, the courts in New Delhi shall have exclusive jurisdiction to
handle any such issues.
20 INTELLECTUAL PROPERTY, NON-DISCLOSURE OBLIGATIONS
20.1 Intellectual Property in all work that is done by any of the Co-Founders for the
Business shall be exclusively used for the purposes of the Businesses.
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Intellectual Properly includes contributions and inventions, discoveries, creations,

developments, improvements, works of authorship and ideas (whether or not
protectable under patent, copyright, or other legal theory) of any kind that are
conceived, created, developed or reduced to practice by any Co-Founder, alone or
with others, while such Co-Founder is a member of, or provides services to, the
Company, regardless of whether they are conceived or made during regular
working hours or at the Company’s place of work, that are directly or indirectly
related to the Project, result from tasks assigned to a Co-Founder by the Company,
or are conceived or made with the use of the Company’s resources, facilities or
materials; and (b) any and all patents, patent applications, copyrights, trade secrets,
trademarks (whether or not registered), domain names and other intellectual
property rights, worldwide, with respect to any of the foregoing.
The term “Intellectual Property” does not include any inventions developed by a
Co-Founder entirely on such Co-Founder’s own time, without using any Company
equipment, supplies, facilities or trade secret information, unless the invention
related to the Project at the time of the invention’s conception or reduction to
practice.
20.2 Each Co-Founder hereby irrevocably assigns to the Company all right, title, and
interest in and to all Intellectual Property owned by such Co-Founder. Each Co-
Founder agrees (i) to assist the Company from time to time with signing and filing
any written documents of assignment that are necessary or expedient to evidence
such Co-Founder’s irrevocable assignment of Intellectual Property to the Company;
and (ii) to assist the Company in applying for, maintaining, and filing any renewals
with respect to Intellectual Property anywhere in the world, in each case at the
Company’s expense.
20.3 An outgoing Co-Founder shall be under an obligation not to disclose information
specific to the business to third parties, without the express written permission of
the remaining Co-Founders.
20.4 During the period of their association with the Business, disclosure to third parties
shall only be made on a need-to-know basis and by subjecting the third party to a
similar obligation of non-disclosure, or on any other basis as agreed by the Co-
Founders.
21
20.5 For two (2)years following termination of a Co-Founder (i) the Co-Founder shall
not solicit, encourage, or induce or attempt to solicit, encourage, or induce any (A)
Consultant, marketing agent, or consultant of the Company to terminate his
employment, agency, or consultancy with the Company or any (B) prospective
Consultant with whom the Company has had discussions or negotiations within six
months prior to Consultant’s termination of employment, not to establish a
relationship with the Company, (ii) induce or attempt to induce any current
customer to terminate its relationship with the Company or (iii) induce any
potential customer with whom the Company has had discussions or negotiations
within six months prior to Co-Founder’s termination of this agreement not to
establish a relationship with the Company.
21 NOTICES
21.1 Any notice, approval, consent and or other notification required or permitted to be
given hereunder shall be in writing in English and shall be personally delivered, or
transmitted by registered post with postage fully paid or transmitted by fax or email
to the address specified below or to such other addresses as may, from time to time
be given by each Party to the other Party in writing and in the manner herein before
provided to:
(a) In the case of Co-Founder 1:

Address: [Insert address]
Email id: [Insert email id]
(b) In the case of Co-Founder 2:

(c) In the case of Co-Founder 3:
22
22 ANNOUNCEMENTS
22.1 No formal or informal public announcement or press release which makes reference
to the terms and conditions of this Agreement or any of the matters referred to
herein, shall be made or issued by any Party without the prior written approval of
all the Parties.
23 MISCELLANEOUS
23.1. Amendments and Waivers. This Agreement may only be amended with the
written consent of all Parties and none of its provisions may be waived except
with the written consent of the party waiving compliance.
23.2. Governing Law: This Agreement is governed by and shall be construed in
accordance with the laws of India.
23.3. Sole Agreement. This Agreement, including the Annexure, Schedules and
Exhibits hereto, constitutes the sole agreement of the parties and supersedes all
oral negotiations and prior writings with respect to the subject matter hereof.
23.4. Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (i) such
provision shall be excluded from this Agreement, (ii) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (iii)
the balance of the Agreement shall be enforceable in accordance with its terms.
23.5. Headings. The headings of the Clauses of this Agreement are intended for
convenience only, and will not affect the intent, scope, or meaning of any
provision of this Agreement.
23.6. Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together will constitute one and the
same instrument.
23.7. Survival: All Clauses of this Agreement that by their very nature should
survive termination or expiration shall survive, including, without limitation,
Clause 6 (Restraint On Competing Business), Clause 20 (Intellectual
Property; Non-Disclosure Obligations), Clause 19 (Dispute Resolution),
Clause 21 (Notices), Clause 23 (Miscellaneous). Termination shall not
23
prejudice or affect any right or action or remedy which shall have accrued or
shall thereafter accrue to either Party, and shall not discharge either Party from
payment of any sums already due under this Agreement.
IN WITNESS WHEREOF the parties have put their respective hands the day and
year first hereinabove written
Signed and delivered by
Co-Founder 1
Co-Founder 2
Co-Founder 3
Witnesses:
Name of witness:[●]
Address: [●]
Signature:[●]
Name of witness: [●]

Address: [●]
Signature:
24
Annexure –A
Performance Metrics for Co-Founder 1
Performance Metrics
[Insert performance indicators]
Performance Metrics

Performance Metrics
25
26

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This CO-FOUNDERS AGREEMENT is executed at [●] on [●] [insert date].

Each of the parties shall be individually referred to as a ‘Co-Founder’ and collectively as

IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES HERETO AS

1. APPOINTMENT OF NEW CO-FOUNDER

2. TERM AND VALIDITY OF THIS AGREEMENT

2.2 Unless a Co-Founder is dismissed or retired as explained later in this agreement,

3. RESPONSIBILITIES OF THE CO-FOUNDERS

a) He shall assume the title of Co-Founder of the Company and be a member

b) He shall further be appointed to the role of Director and [insert

c) He will be responsible for Business development, Sales, marketing and

a) He shall assume the title of Co-Founder of the Company and become a

b) He shall, further be appointed to the role of a Director and [insert

c) He will be responsible for content and product development.

a) He shall assume the title of Co-Founder of the Company and become a

b) He shall, further be appointed to the role of [insert designation].

c) He will be responsible for technology and product development

4 MUTUAL RIGHTS AND OBLIGATIONS OF THE CO-FOUNDERS

4.1 In their capacity as a co-founder of the business, the Co-Founders shall be

i. The right to be represented as a co-founder of the Company in

ii. Right to participate in discussions pertaining to the company

iii. Right to be involved in developing future expansion plans and

iv. Right to inspect the books of accounts

v. Right to be treated fairly

vi. Right to have the terms of this agreement incorporated into a

5 CAPITAL CONTRIBUTION AND PROFIT-SHARING

ii. Co-Founder 2: [●]

6 RESTRAINT ON COMPETING BUSINESS

ii. Co-Founder 2 – [●]

iii. Co-Founder 3 – [●]

8 OWNERSHIP AND SHARES

Sl. Person / Entity Number of shares held Shareholding

Sl. Person / Entity Number of shares held Shareholding

8.3 Grant of shares to Admitted Co-Founder:

The Company will grant to the Admitted Co-Founder up to a maximum of

[Grant of options to the Admitted Co-Founder:

The Company will grant to the Admitted Co-Founder options to purchase up to a

Options shall vest as per the following schedule:

All options must be exercised by the Admitted Co-Founder within 3 months of

i. The number of Sale Shares;

iii. The identity of the Proposed Buyer; and

iv. Other terms and conditions of the proposed Transfer;

(c) Be accompanied by an undertaking from the Selling Co-Founder whereby such

shares or options to purchase shares to the Advisors of the Company.

9 MINIMUM COMMITMENT OF CO-FOUNDERS

10. PERFORMANCE GOALS AND CONSEQUENCES OF NON-

b) Altering rights attached to shares;

v) amend this agreement.

13. VOLUNTARYRETIREMENT, EXPULSION AND RESTRICTIONS

13.1 The Board of Directors may immediately terminate a Co-Founder from

property, assets, monies or belongings of the Company;

• First by the surviving Co-Founders proportionately, or

• Second, in a ratio that is mutually decided depending on the

16 PROVISIONS RELATING TO INSTITUTIONAL OR ANGEL

● First, all unpaid salary and other reimbursements.

● Third, equity as adjusted with the profits or losses of the Company.

18 EMPLOYEE STOCK OPTIONS

Intellectual Properly includes contributions and inventions, discoveries, creations,

(a) In the case of Co-Founder 1: