Pre-incorporation agreement between founders

PRE-INCORPORATION FOUNDERS' AGREEMENT

(To be entered into prior to incorporation of the proposed company)

This Pre-Incorporation Founders' Agreement (this "Agreement") is made and executed at Place of execution on this Day of execution day of Month of execution, Year of execution

BETWEEN

First founder's full name, Relation descriptor (son of/daughter of/wife of) First founder's father's/husband's name, aged about First founder's age years, residing at First founder's address, hereinafter referred to as "Founder 1" (which expression shall, unless repugnant to the context, include his/her heirs, legal representatives, successors and permitted assigns);

AND

Second founder's full name, Relation descriptor (son of/daughter of/wife of) Second founder's father's/husband's name, aged about Second founder's age years, residing at Second founder's address, hereinafter referred to as "Founder 2";

AND

Third founder's full name, Relation descriptor (son of/daughter of/wife of) Third founder's father's/husband's name, aged about Third founder's age years, residing at Third founder's address, hereinafter referred to as "Founder 3";

Founder 1, Founder 2 and Founder 3 are hereinafter collectively referred to as the "Founders" and individually as a "Founder".

WHEREAS:

NOW THIS AGREEMENT WITNESSETH AND IT IS HEREBY AGREED AS FOLLOWS:

1.1 The Founders shall take all steps necessary to incorporate the Company under the Companies Act, 2013 with an authorised share capital of Authorised share capital amount (Rupees Authorised share capital in words only) divided into Total number of shares of face value equity shares of Face value per share (Rupees Face value in words only) each.

1.2 The principal object of the Company shall be Principal business object description.

1.3 The Company is hereinafter referred to as the "Company" and, until incorporation, references to the Company shall mean the entity proposed to be incorporated as above.

2.1 All expenses incurred prior to incorporation, including registration fees, professional fees, stamp duty and other incidental expenses (the "Pre-Incorporation Expenses"), shall be borne by the Founders in the following proportions: Founder 1 – Founder 1 expense share percentage%; Founder 2 – Founder 2 expense share percentage%; Founder 3 – Founder 3 expense share percentage%.

2.2 The Founders acknowledge that, under the Indian Contract Act, 1872, a company cannot be bound by contracts made on its behalf prior to its incorporation, and each Founder shall be personally liable for Pre-Incorporation Expenses in the proportions stated above until such obligations are validly ratified or adopted by the Company after incorporation pursuant to Section 15 of the Specific Relief Act, 1963.

2.3 If the Company is not incorporated within Deadline in days for incorporation days of the date of this Agreement, the Founders shall meet and decide by mutual consent whether to extend the timeline or to treat this Agreement as terminated, in which case Pre-Incorporation Expenses shall be shared in the proportions stated in Clause 2.1.

3.1 The Founders shall subscribe to the initial paid-up capital of the Company as follows:

3.2 Each Founder shall pay the amount of subscription agreed above into the Company's bank account within Days to pay subscription after incorporation days of incorporation of the Company or such other date as may be unanimously agreed in writing.

3.3 No Founder shall create any pledge, lien, encumbrance or third-party interest over the shares agreed to be held by him/her under this Agreement without the prior written consent of the other Founders.

4.1 The Founders agree that upon incorporation:

4.2 Each Founder shall devote such time and attention to the business of the Company as is reasonably necessary for the proper discharge of his/her responsibilities, and shall not, during the continuance of this Agreement, engage in any business competing with the proposed business of the Company without the prior written consent of the other Founders.

4.3 First Directors: The first Board of Directors of the Company shall consist of Number of first directors directors, being the Founders named in Clause 4.1, or such other persons as the Founders may unanimously agree in writing.

5.1 The Founders agree that, for so long as each Founder holds shares in the Company in the proportion set out in Clause 3.1, the following matters shall require the unanimous approval of all Founders (acting as shareholders and/or directors):

5.2 The Founders shall, to the extent legally permitted, vote their shares and exercise their rights as directors to ensure that the decisions contemplated in this Agreement are duly passed by the Company.

6.1 Lock-in: None of the Founders shall sell, transfer, assign or otherwise dispose of any shares in the Company for a period of Share lock-in period from the date of incorporation, except with the prior written consent of all other Founders.

6.2 Right of First Refusal: After the expiry of the lock-in period, a Founder desiring to transfer shares (the "Transferor") shall first offer such shares in writing to the other Founders (the "Offerees") at a price determined in accordance with Clause 6.4. The Offerees shall have Days for right of first refusal acceptance days from receipt of such notice to accept the offer, failing which the Transferor may transfer the shares to any third party at a price not lower than the price offered to the Offerees.

6.3 Tag-Along Right: If any Founder transfers shares to a third party, each other Founder shall have the right, exercisable within Days to exercise tag-along right days of notice, to require the third-party transferee to purchase from such other Founder the same proportion of that Founder's shareholding at the same price and on the same terms.

6.4 Valuation: The price per share for any transfer under this Clause shall be the fair market value determined by a chartered accountant or a registered valuer jointly nominated by the Founders, and failing agreement, by Institution to appoint valuer if no agreement, whose determination shall be final and binding.

6.5 Any transfer of shares shall comply with the provisions of the Companies Act, 2013 and the Articles of Association of the Company.

7.1 Each Founder shall keep confidential all information relating to the business plan, financials, customers, suppliers and other affairs of the proposed Company disclosed by or on behalf of any other Founder, and shall not disclose the same to any third party except with prior written consent or as required by law.

7.2 The obligations under this Clause shall survive the termination of this Agreement for a period of Confidentiality survival years years.

8.1 All intellectual property created by any Founder in the course of preparation for the business of the proposed Company, including Description of pre-incorporation intellectual property, shall vest in or be assigned to the Company upon incorporation, and each Founder shall execute such documents as may be necessary to give effect to this Clause.

9.1 For a period of Non-solicitation period from the date of this Agreement, no Founder shall, without the prior written consent of the other Founders, solicit or entice away any employee, customer, vendor or other business associate of the proposed Company with whom such Founder had dealings in connection with the proposed business.

10.1 If the Founders are unable to agree on any matter requiring unanimity under Clause 5.1, and such disagreement persists for more than Days after which disagreement is a deadlock days after written notice by any Founder, the matter shall first be referred to mediation before Mediation institution.

10.2 If mediation fails within Days allowed for mediation days, the dispute shall be finally resolved by arbitration under the Arbitration and Conciliation Act, 1996, by a sole arbitrator mutually appointed by the Founders, or failing agreement, in accordance with the said Act. The seat and venue of arbitration shall be Seat of arbitration. The language of arbitration shall be English. The award shall be final and binding on the Founders.

11.1 This Agreement shall stand terminated upon the earliest of:

11.2 Termination shall not affect Clauses 2, 6 (to the extent applicable), 7, 8, 9, 10 and 12, which shall survive termination.

12.1 Governing Law: This Agreement shall be governed by and construed in accordance with the laws of India, and the courts at City of exclusive jurisdiction shall have exclusive jurisdiction.

12.2 Amendment: No amendment or modification of this Agreement shall be valid unless made in writing and signed by all the Founders.

12.3 Notices: Any notice under this Agreement shall be in writing and delivered by hand, registered post with acknowledgement due, or email to the addresses of the Founders stated above or to Email address for notices.

12.4 Entire Agreement: This Agreement constitutes the entire understanding between the Founders with respect to its subject matter and supersedes all prior discussions, understandings and agreements, whether written or oral.

12.5 Stamp Duty: The Founders shall ensure that this Agreement is stamped in accordance with the applicable Stamp Act of the State where it is executed.

12.6 Counterparts: This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.

IN WITNESS WHEREOF the Founders have executed this Agreement on the day, month and year first above written.

SIGNED and DELIVERED by the withinnamed "Founder 1"

In the presence of:

SIGNED and DELIVERED by the withinnamed "Founder 2"

SIGNED and DELIVERED by the withinnamed "Founder 3"