Cofounder Partnership Agreement

Cofounder Partnership Agreement

This Cofounder Partnership Agreement (the "Agreement") is made and entered into as of by and between: Cofounder A: , Address: ; and Cofounder B: , Address: . Cofounder A and Cofounder B are each a "Party" and collectively the "Parties."

RECITALS

WHEREAS, the Parties desire to associate as cofounders to form and operate a partnership to carry on the business of (the "Business");

WHEREAS, the Parties wish to set forth their respective rights, obligations, capital contributions and the terms governing their relationship and the operation of the Business; and

WHEREAS, the Parties intend that the Business be conducted as a partnership under the laws of the state of and that this Agreement govern their affairs.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the Parties agree as follows:

1. FORMATION; NAME; PRINCIPAL PLACE OF BUSINESS

1.1 Formation. The Parties hereby form a partnership (the "Partnership") pursuant to the terms of this Agreement for the purposes described herein. The Partnership shall commence on the effective date set forth above and shall continue until terminated in accordance with this Agreement.

1.2 Name. The Partnership shall operate under the name (the "Partnership Name"), or such other name as the Parties may unanimously agree in writing.

1.3 Principal Place of Business. The principal office and place of business of the Partnership shall be: . The Partnership may change its principal place of business upon written notice to the other Party.

2. PURPOSE

The purpose of the Partnership is to engage in the Business described above and to perform all activities reasonably related or incidental thereto. The Partnership shall have all powers necessary or convenient to accomplish such purpose, including the power to enter into contracts, hire employees and contractors, obtain financing, and hold, license or assign intellectual property.

3. TERM

The Partnership shall continue until terminated as provided in Section 13. The Partnership's fiscal year shall end on of each year, unless otherwise determined by unanimous written agreement of the Parties.

4. CAPITAL CONTRIBUTIONS AND OWNERSHIP

4.1 Initial Contributions. The Parties shall contribute capital to the Partnership as follows:

4.2 Additional Capital. No Party shall be required to make any additional capital contribution except as may be agreed in writing. Any additional contribution shall be evidenced by an amendment to the capital schedule and, unless otherwise agreed, shall adjust ownership percentages pro rata.

5. MANAGEMENT AND VOTING

5.1 Management. The Parties shall manage the Partnership jointly. Except as otherwise expressly provided in this Agreement, routine decisions concerning the day-to-day operations shall be made by mutual agreement of the Parties.

5.2 Voting. Unless this Agreement expressly provides otherwise, decisions of the Partnership shall require the approval of a majority in interest of the Parties, measured by Ownership Percentage. Major decisions, including but not limited to the admission of additional partners, sale of substantially all Partnership assets, incurrence of indebtedness in excess of , or amendment of this Agreement, shall require unanimous written consent of the Parties.

6. ROLES, DUTIES AND TIME COMMITMENT

Each Party shall devote such time and effort as is reasonably necessary to perform his or her duties. Neither Party shall assign management responsibilities to a third party without the prior written consent of the other Party.

7. PROFITS, LOSSES AND DISTRIBUTIONS

7.1 Allocation. Except as otherwise provided in this Agreement, Profits and Losses of the Partnership shall be allocated to the Parties in proportion to their Ownership Percentages as set forth in Section 4.

7.2 Distributions. Distributions of available cash shall be made at such times and in such amounts as agreed by the Parties, taking into account working capital requirements and reserves. The Parties shall endeavor to cause the Partnership to make distributions sufficient to permit each Party to meet any tax liabilities arising from allocations under Section 7.1.

8. INTELLECTUAL PROPERTY

8.1 Assignment. Each Party hereby assigns and agrees to assign to the Partnership all right, title and interest in and to any and all inventions, discoveries, designs, works of authorship, trade secrets and other intellectual property created, conceived or reduced to practice by such Party that relate to the Business, whether created before or after the effective date, subject to any preexisting third-party rights.

8.2 Further Assurances. Each Party shall execute such instruments and take such further actions as may be reasonably necessary to effectuate the intent of this Section 8.

9. CONFIDENTIALITY

Each Party shall keep confidential all non-public information relating to the Partnership and the Business, including trade secrets, financial information and customer lists, and shall not disclose such information to any third party except as required by law or with the prior written consent of the other Party. This obligation shall survive termination of this Agreement for a period of .

10. NON-COMPETE AND NON-SOLICITATION

During the term of the Partnership and for a period of following termination, no Party shall, directly or indirectly, own, manage, operate, join, control or participate in the ownership, management, operation or control of any business that competes with the Business within a radius of , except with the prior written consent of the other Party. Each Party agrees not to solicit employees or contractors of the Partnership for the same period.

11. TRANSFER OF INTERESTS; RIGHT OF FIRST REFUSAL

11.1 Restriction on Transfer. A Party shall not sell, assign, pledge or otherwise transfer all or any part of its Partnership interest except in accordance with this Section 11.

11.2 Right of First Refusal. If a Party (the "Selling Party") receives a bona fide offer from a third party to purchase any part of the Selling Party's interest, the Selling Party shall provide written notice to the other Party describing the terms of the proposed sale. The non-selling Party shall have a right of first refusal to purchase such interest on the same terms within days of receipt of notice.

12. WITHDRAWAL, DEATH, DISABILITY AND BUY-OUT

12.1 Voluntary Withdrawal. A withdrawing Party shall give not less than days' prior written notice and shall comply with the transfer provisions of Section 11.

12.2 Death or Disability. Upon the death or permanent disability of a Party, the Partnership interest of such Party shall be offered to the surviving or remaining Party in accordance with the Right of First Refusal provisions. If the interest is not purchased, the Partnership may be dissolved and wound up pursuant to Section 13.

13. DISSOLUTION AND WINDING UP

13.1 Events Causing Dissolution. The Partnership shall be dissolved upon the unanimous written agreement of the Parties, the occurrence of an event making it unlawful for the Partnership to continue, or such other events as set forth in this Agreement.

13.2 Winding Up. Upon dissolution, the Partnership shall wind up its affairs, liquidate assets, discharge liabilities and distribute any remaining assets to the Parties in accordance with their respective Ownership Percentages after payment of or provision for Partnership liabilities.

14. RECORDS; BANK ACCOUNTS; TAX MATTERS

14.1 Records. The Partnership shall keep complete and accurate records of all Partnership transactions and shall allow either Party or its duly authorized representative reasonable access to those records during normal business hours.

14.2 Bank Accounts. All Partnership funds shall be deposited in the Partnership's name in such bank accounts as the Parties shall designate. Withdrawals shall require the signature of a Party or Parties as agreed by the Parties.

14.3 Tax Matters. The Parties shall cause the Partnership to file all required tax returns. Each Party shall report its distributive share of Partnership taxable income, gain, loss, deduction and credit on its own tax returns in accordance with applicable law.

15. INDEMNIFICATION; INSURANCE

The Partnership shall indemnify and hold harmless each Party from and against any losses, liabilities, claims or expenses (including reasonable attorneys' fees) incurred by reason of any act performed or omitted by such Party on behalf of the Partnership, except to the extent arising from such Party's gross negligence, willful misconduct or material breach of this Agreement. The Partnership may maintain insurance to cover such risks.

16. NOTICES

All notices required or permitted under this Agreement shall be in writing and shall be deemed given when delivered personally, sent by certified mail (return receipt requested), or delivered by nationally recognized overnight courier to the addresses set forth below or to such other address as a Party may designate by notice in accordance with this Section.

17. AMENDMENTS; WAIVER

No amendment or modification of this Agreement shall be effective unless in writing and signed by both Parties. The failure of either Party to enforce any provision of this Agreement shall not constitute a waiver of that provision or any other provision.

18. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

18.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of , without regard to its conflicts of law principles.

18.2 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior and contemporaneous agreements, understandings and negotiations, both written and oral.

18.3 Severability. If any provision of this Agreement is held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired.

19. COUNTERPARTS; ELECTRONIC SIGNATURES

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. Signatures transmitted by electronic means shall be effective to bind the Parties.

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