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FII Founder Agreement

FII Founder Agreement

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Published by TheFunded

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Published by: TheFunded on Nov 04, 2010
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This Founder Agreement (this “
”) is entered into as of the date set forth onthe signature page hereto (the “
Effective Date
”), by and between Founder Institute,Incorporated, a Delaware corporation (“
”), and the individual whose name is listed on thesignature pages hereto (“
”).FII and Founder agree as follows:1. FII Program Participation. During the time in which Founder is enrolled in theFII program (the “
”), Founder will be eligible to receive:A. Participation with peers in company building exercises;B. Education by experienced executive officers of start-up companies;C. Mentorship by experienced executive officers on business issues;D. Multiple opportunities to meet investors and investor groups;E. Discounted or free services by third party providers;F. Certification as an FII graduate; andG. Participation in the Bonus Pool (described in Section 3 below).2. Obligations of Founder. To graduate and to be eligible for the benefits listedunder Section 1, Founder must:A. Attend every session during the Semester in person;B. Complete all weekly session projects and assignments on time;C. Participate in weekly peer working group meetings and assignments;D. Provide feedback on each mentor that teaches a session, once immediatelyafter such session and again within three (3) months of the end of the Semester;
E. Form at least one company during the Semester that uses basic corporatedocuments consistent with the materials provided by FII or otherwise approved by FII (a
Founder Company
”);F. Cause each Founder Company founded by Founder and selected by FII to participate in the Bonus Pool to, within five (5) business days of its selection, issue a Warrant infavor of FII in the form attached as Exhibit A (a “
”) and deliver FII duly and validlyexecuted Board of Directors resolutions authorizing the issuance of the Warrant in the formattached hereto as Exhibit B. FII agrees that, by executing this Agreement and accepting aWarrant from a Founder Company founded by Founder, it is making the representations and
Macintosh HD:Users:adeoressi:Desktop:FII-Founder_3.DOC (14985)
 warranties contained in Section 13 of the form of Warrant to such Founder Company on and asof the issuance date of such Warrant;G. Pay FII a one-time fee for course administration and materials in theamount specified on the signature page hereto;H. Pay FII a one-time tuition fee of $4,500 for the first Founder Companyfounded by Founder that receives debt or equity financing in the aggregate gross amount of atleast $50,000 (excluding any funds contributed by Founder or any other FII participant that co-founds such company) within eighteen (18) months of the date of the last session of theSemester;I. Notify FII of intent to leave the program by no later than thirty (30) days before the last session of the Semester;J. Notify FII of the consummation of any financing or liquidity event by anyFounder Company founded by Founder within ten (10) business days of consummation, andauthorize and direct legal counsel to such Founder Company to do the same.3. Bonus Pool. FII may, at its sole discretion, select any Founder Company formedduring the Semester by an FII program participant attending sessions at the same location asFounder to participate in the Bonus Pool (each an “
Eligible Company
”). All Warrants grantedto FII by the Eligible Companies shall be collectively referred to as the “
Bonus Pool
.” Founder shall be eligible to participate in the Bonus Pool by contributing a Warrant from an EligibleCompany to the Bonus Pool, subject to the terms below:A. Any proceeds actually received by FII resulting from the sale of theWarrants in the Bonus Pool or the sale of any securities underlying such Warrants shall bereferred to as “
Bonus Proceeds
.”B. FII will set aside thirty percent (30%) of all Bonus Proceeds receivedwithin ten (10) years of the start of the Semester from the Bonus Pool (the “
Available BonusProceeds
”) for the Eligible Participants (as defined below).C. The Available Bonus Proceeds will be divided by the number of EligibleCompanies contributing a Warrant to the Bonus Pool and the resulting quotient will be referredto as a “
Bonus Pool Share
.”D. Each FII participant that forms, either alone or in conjunction with others,an Eligible Company that contributes a Warrant to the Bonus Pool (an “
Eligible Participant
”)shall receive a Bonus Pool Share or pro rata portion thereof based on the number of EligibleParticipants forming such Eligible Company. For instance, if two (2) Eligible Participants formone (1) Eligible Company that contributes a Warrant to the Bonus Pool, then each such EligibleParticipants will be entitled to one-half (0.5) of a Bonus Pool Share.E. FII will attempt to distribute any Available Bonus Proceeds received byFII to the Eligible Participants twice annually in accordance with their Bonus Pool Shares.
AtFII’s option, Available Bonus Proceeds will be distributed in cash or by check, wire transfer,
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 cancellation of indebtedness or any combination thereof. Each distribution will include astatement of expenses providing reasonable detail on the taxes, fees, expenses and other coststhat were deducted from such distribution. No Eligible Participant shall have any audit rights pertaining to the Bonus Pool, any Bonus Proceeds or any Available Bonus Proceeds.F. FII will attempt to notify each Eligible Participant of a distribution usingthe contact information provided to FII in writing by such Eligible Participant. If FII is unable tonotify an Eligible Participant using such contact information within forty-five (45) days of FII’sinitial attempt, such Eligible Participant shall be terminated from the Bonus Pool and allAvailable Bonus Proceeds owed to such Eligible Participant shall be allocated to FII. Inaddition, any Available Bonus Proceeds that such Eligible Participant would have been entitledto in the future will be allocated to FII.G. Bonus Proceeds shall be net of the exercise prices of the Warrants,applicable taxes and any legal, arbitration, escrow, banking, administrative and other reasonablefees, expenses and costs incurred by FII in connection with administering the Bonus Pool, theexercise or sale of the Warrants or the sale of the securities underlying the Warrants.H. The exercise or sale of any Warrant and/or the sale of any securitiesreceived upon exercise of a Warrant shall be in FII’s sole discretion.4. Confidentiality.A. Definition of Confidential Information.
Confidential Information
means any non-public information that relates to the actual or anticipated business and/or  products, research or development of FII, any other participant in the FII program, any companyformed by another participant in the FII program during the Semester or any of their respectiveaffiliates (each a “
Disclosing Party
”), including but not limited to technical data, trade secrets,know-how, research, product plans, or other information regarding a Disclosing Party’s productsor services and markets therefor, customer lists and customers, software, developments,inventions, processes, formulas, technology, designs, drawings, engineering, hardwareconfiguration information, marketing, finances, and other business information disclosed by aDisclosing Party, either directly or indirectly, in writing, orally or by drawings or inspectionrights granted to Founder. The fact that a person is participating or has participated in the FII program shall be considered Confidential Information hereunder. Notwithstanding theforegoing, Confidential Information shall not include any such information which Founder canestablish (i) was publicly known or made generally available prior to the time of disclosure toFounder; (ii) becomes publicly known or made generally available after disclosure to Founder through no wrongful action or inaction of Founder; or (iii) is in the rightful possession of Founder, without confidentiality obligations, at the time of disclosure as shown by Founder’sthen-contemporaneous written records.B. Nonuse and Nondisclosure. During and after the term of this Agreement,Founder will hold in the strictest confidence, and take all reasonable precautions to prevent anyunauthorized use or disclosure of Confidential Information, and Founder will not (i) use theConfidential Information for any purpose whatsoever other than as necessary for Founder’s participation in the FII program, or (ii) disclose the Confidential Information to any third party

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