Business Pre Incorporation Agreement

Business Pre-Incorporation Agreement

This Pre-Incorporation Agreement (the Agreement) is entered into as of (the Effective Date), by and between Promoter Name: with address ; and Subscriber Name: with address .

RECITALS

WHEREAS, the parties intend to organize a business entity under the proposed name (the Company) to engage in the business of within the jurisdiction of .

WHEREAS, the parties desire to set forth their respective rights and obligations with respect to the formation of the Company, the contributions to be made prior to incorporation, the allocation of equity and other matters relating to the initial governance of the Company.

WHEREAS, the parties intend that upon incorporation of the Company, certain pre-incorporation contributions and agreements shall be adopted, ratified and converted into the capital structure of the Company on the terms set forth herein.

NOW, THEREFORE

In consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

1. DEFINITIONS

1.1. "Articles" means the proposed articles of incorporation, including any initial bylaws or operating agreement to be adopted upon formation. "Contribution" means any capital, services, intellectual property, contracts, or other assets provided by a party to the Company prior to incorporation.

2. FORMATION

2.1. The parties agree to use commercially reasonable efforts to cause the Company to be duly organized and incorporated under the laws of the jurisdiction specified in the Recitals within days of the Effective Date.

2.2. The initial registered office and principal place of business of the Company shall be , unless otherwise agreed in writing.

3. PRE-INCORPORATION CONTRIBUTIONS

3.1. The parties intend that the following contributions be made on the terms set forth below and reflected in the Company's capitalization upon incorporation.

3.2. Each Contribution shall be evidenced by documentation reasonably acceptable to the parties and shall be valued for purposes of initial capitalization at the agreed amount set forth below:

4. CAPITALIZATION AND EQUITY ALLOCATION

4.1. Upon formation, the parties shall cause the authorized capital of the Company to be allocated as set forth below and such allocation shall be reflected in the initial certificate(s) or membership interests: Promoter to receive of the outstanding equity; Subscriber to receive of the outstanding equity.

4.2. The parties agree that any equity issued in respect of Contributions shall be subject to any vesting schedule and transfer restrictions set forth in Section 5 and the Company's governing documents.

5. VESTING AND TRANSFER RESTRICTIONS

5.1. All equity issued in connection with Contributions shall be subject to a vesting schedule of years, with a cliff of months, unless otherwise agreed in writing.

5.2. No party shall transfer, assign, pledge or encumber any equity or rights in respect of Contributions prior to incorporation except with the prior written consent of the other party, which consent shall not be unreasonably withheld.

6. PRE-INCORPORATION EXPENSES AND REIMBURSEMENT

6.1. Expenses incurred on behalf of the Company prior to incorporation shall be classified as Company expenses if approved in writing by both parties. Such approved expenses shall be reimbursable from Company funds upon formation or treated as additional Contributions at the election of the parties.

7. CONFIDENTIALITY

7.1. Each party shall hold in strict confidence and shall not disclose to any third party any Confidential Information of the other party, except as required by law or as necessary to effectuate the purpose of this Agreement. "Confidential Information" includes nonpublic financial data, proprietary business plans, technical information, customer lists and other proprietary materials disclosed in connection with the Company.

7.2. The obligations under this Section shall survive the termination of this Agreement for a period of three (3) years from the Effective Date or longer as required under applicable law with respect to trade secrets.

8. REPRESENTATIONS AND WARRANTIES

8.1. Each party represents and warrants to the other that (a) it has the full power and authority to enter into this Agreement; (b) this Agreement constitutes a valid and binding obligation enforceable in accordance with its terms; and (c) the execution and performance of this Agreement will not violate any agreement or obligation of such party.

8.2. Each party further warrants that any Contribution described in this Agreement is free and clear of any liens, encumbrances or adverse claims, other than those disclosed in writing to the other party prior to the Effective Date.

9. INDEMNIFICATION

9.1. Each party agrees to indemnify, defend and hold harmless the other party and the Company (to the extent formed) from and against any and all losses, liabilities, claims, damages and expenses (including reasonable attorneys' fees) arising from any breach of such party's representations, warranties or obligations under this Agreement.

10. NOTICES

10.1. Any notice, demand, consent or other communication required or permitted under this Agreement shall be in writing and delivered to the addresses set forth below or to such other address as a party may specify by notice in accordance with this Section.

11. AMENDMENT AND WAIVER

11.1. This Agreement may be amended, modified or supplemented only by a written instrument executed by both parties. No failure or delay by any party in exercising any right under this Agreement shall operate as a waiver of such right.

12. COUNTERPARTS

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

13. GOVERNING LAW

13.1. This Agreement shall be governed by and construed in accordance with the laws of the jurisdiction of incorporation specified in the Recitals without regard to its conflict of law principles.

14. ENTIRE AGREEMENT

14.1. This Agreement, together with any schedules or exhibits expressly incorporated herein, constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations and discussions, whether oral or written.

15. SEVERABILITY

15.1. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not be affected thereby, and the parties shall negotiate in good faith to replace the invalid provision with a valid provision that, to the extent possible, achieves the original economic intent of the parties.

16. MISCELLANEOUS

16.1. No party shall assign or transfer any of its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld. The headings in this Agreement are for convenience of reference only and shall not affect its interpretation.

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