I want to include a few clauses in a co-founder agreement template I found online (Simmonds Stewart). How do I do that?

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Customer: I want to include a few clauses in a co-founder agreement template I found online (Simmonds Stewart). How do I do that? Are there any templates I can look online and just add them in?
JA: What state are you in? And have you consulted a local attorney?
Customer: Auckland. And no
JA: Has anything been officially filed? If so, what?
Customer: No
JA: Anything else you want the Lawyer to know before I connect you?
Customer: We're an early stage startup so anything that's quick and simple would be super helpful. This is just a vesting agreement alongside any IP issues to prevent any problems in the future
Answered by Chris The Lawyer in 5 hours 2 years ago
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Chris The Lawyer, Expert

Hi
I am a New Zealand lawyer based in Wellington and will help you with your question today. Please give me a minute to read the question

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Chris The Lawyer, Expert

What sort of clauses do you need? The Simmonds Stewart site has many useful examples

Customer
I want to add 3 things:
1) Make sure IP remains in company (something similar to employee agreements but for co-founders)
2) No expectation for salary, but will be reviewed when revenue is generated (at the moment, we're pre-revenue)
3) I as the founder, have the right to terminate the co-founder agreement if the other party has not contributed to their role as a co-founder.Also, in the case where either a co-founder leaves or is terminated, what would be the usual procedure for transferring (repurchasing) the unvested shares back to me?
Customer
This is what I have at the moment. Hope you can take a look at it.
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Chris The Lawyer, Expert

Generally there should be a disopute resolution clause saying how disputes should be resolved. You should also have a shareholders agreement which sets out what happens on any shareholder wanting to exit the company. This looks a bit like one, but you need to consider what is needed for shareholder disputes and entry and exit clauses

Customer
How would I be able to add them in? Are there any templates you know that I can use or would you be able to add them for me? Thanks
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Chris The Lawyer, Expert

In your draft you have been careful to say this does not create a partnership. In fact in a small company the shareholders sometimes have to work as partners even though a partnership under the Partnership Act is not created. So because of the close working relationship you need to have a dispute resolution clause which can be fairly simple, but which makes provision for a number of things. As I mentioned before, you need provision for an exit clause, and an entry clause for new shareholders. You also need to have a dispute resolution clause which would typically start with negotiation as the first stage, followed by mediation and then arbitration. The purpose of having this form of dispute resolution clause is to avoid the cost of going to the High Court, which is where these disputes have to be heard. In terms of getting a precedent, I don't know if you have seen one on the Simmons Stewart website, but I will have a look also

Customer
Thanks Chris, sorry this is my first time dealing with legal agreements so don't have much knowledge about them
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Chris The Lawyer, Expert

An example

"Any dispute arising out of or relating to this contract may be referred to mediation, a non-binding dispute resolution process in which an independent mediator facilitates negotiation between the parties. Mediation may be initiated by either party writing to the other party and identifying the dispute which is being suggested for mediation. The other party will either agree to proceed with mediation or agree to attend a preliminary meeting with the mediator to discuss whether mediation would be helpful in the circumstances. The parties will agree on a suitable person to act as mediator or will ask the Arbitrators' and Mediators' Institute of New Zealand Inc. to appoint a mediator. The mediation will be in accordance with the Mediation Protocol of the Arbitrators' and Mediators' Institute of New Zealand Inc."
"The mediation shall be terminated by -
(a) The signing of a settlement agreement by the parties; or
(b) Notice to the parties by the mediator, after consultation with the parties, to the effect that further efforts at mediation are no longer justified; or
(c) Notice by one or more of the parties to the mediator to the effect that further efforts at mediation are no longer justified; or
(d) The expiry of sixty (60) working days from the mediator's appointment, unless the parties expressly consent to an extension of this period.
"If no mediation is agreed to or if the mediation should be terminated as provided in (b), (c) or (d), any dispute or difference arising out of or in connection with this contract, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration in New Zealand in accordance with New Zealand law and the current Arbitration Protocol of the Arbitrators' and Mediators' Institute of New Zealand Inc. The arbitration shall be by one arbitrator to be agreed upon by the parties and if they should fail to agree within twenty-one (21) days, then to be appointed by the President of the Arbitrators' and Mediators' Institute of New Zealand Inc."

Customer
Can I just add this anywhere in the co-founder agreement (the one I sent you previously)? Also, for company IP would I be able to copy and paste from an existing employee agreement?
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Chris The Lawyer, Expert

Yes, you can do both

Customer
Awesome. Thanks so much Chris! Really appreciate it. Would I be able to send through the altered version for you to have a look later?
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Chris The Lawyer, Expert

Sure

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