[INSERT COMPANY NAME]
This option agreement (this "Agreement") is made as of the [INSERT DATE OF
AGREEMENT] by and between [INSERT FOUNDER NAME], founder of the Company (the
"Founder"), [INSERT COMPANY NAME], a limited liability company in the legal form of a
[INSERT COMPANY TYPE] under German law (the "Company") and Founder Institute,
Incorporated (the "Beneficiary"; the Founder, the Company and the Beneficiary jointly the
Whereas the Founder and the Beneficiary have entered into a founder agreement dated
[INSERT DATE OF SIGNATURE OF THE FOUNDER AGREEMENT] (the"Founder
Whereas as part of the Founder's obligations set forth under section 2.F. of the Founder
Agreement, the Founder shall conclude this Option Agreement with the Beneficiary in the event
the Beneficiary will select the Company to participate in the Bonus Pool (as defined under
section 3 of the Founder Agreement);
Whereas on [INSERT DATE OF NOTIFICATION], the Beneficiary has notified the
Founder that the Company has been selected to participate in the Bonus Pool;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Granting of Option. The Company herewith grants to the Beneficiary an option entitling
the Beneficiary, subject to the terms and conditions set forth herein, to subscribe to Shares (as
defined below), in the amounts, at such times and at the price per share set forth herein
2. Acquisition of Shares. Subject to the terms and conditions herein, upon exercise of the
Option, the Company will issue to the benefit of the Beneficiary that number of non-assessable
Shares the aggregate nominal amount of which equals three and a half percent (3.5%) of the
Company’s Fully-Diluted Capitalization, which shall be measured as of immediately following
the last closing of the next Qualified Equity Financing, as such capitalized terms are defined
below; provided, however, that if no Qualified Equity Financing shall have occurred prior to the
expiration date of this Option and the Beneficiary exercises its rights under Section 5 below, then,
for the purposes of this Section 2, the Fully-Diluted Capitalization of the Company shall be
measured as of the Expiration Date of this Option (as defined below).
(a) Change of Control. The term “Change of Control” shall mean (i) any
acquisition or issuance of shares (but excluding any sale or issuance of shares in the Company for
capital raising purposes), reorganization, merger or consolidation, other than a transaction or
series of related transactions in which the holders of the voting rights of the Company outstanding
immediately prior to such transaction or series of related transactions, immediately after such
transaction or series of related transactions, at least a majority of the total voting power
represented by the outstanding voting rights of the Company or such other surviving or resulting
entity or (ii) a sale, lease or other disposition of all or substantially all of the assets of the
(b) Fully Diluted Capitalization. “Fully-Diluted Capitalization” shall mean
the aggregate amount of the registered share capital of the Company plus any authorized capital
(genehmigtes Kapital) other than the Authorized Capital FI Option (as defined below) and other
(c) Qualified Equity Financing. The term “Qualified Equity Financing”
shall mean a transaction or series of related transactions pursuant to which the Company issues
shares, with the principal purpose of raising capital, for aggregate proceeds of at least
EUR 100,000.00 (excluding all amounts received upon conversion or cancellation of
(d) Shares. The term “Shares” shall mean the shares in the Company as
issued to investors in the Company's next Qualified Equity Financing (i.e. shares with the same
rights pertaining to them); provided, however, that if no Qualified Equity Financing has occurred
prior to the Expiration Date of this Option then the Shares to be issued under this Option shall be
ordinary shares in the Company as issued to the Founder.
(e) Business Days: The term "Business Day" shall mean any day when banks
in Berlin are open for general banking business
4. Exercise Price and Period
(a) Exercise Period. This Option shall be exercisable, in whole or in part,
during the term commencing on the first closing date of the next Qualified Equity Financing and
ending on the Expiration Date of this Option.
(b) Exercise Price. The exercise price for this Option (the “Exercise Price”)
shall be the price per Share as paid by investors in the next Qualified Equity Financing.
5. Alternative Exercise: If no Qualified Equity Financing has occurred prior to receipt of
the Expiration Notice pursuant to Section 12 hereof, then this Option shall be exercisable during
the term commencing on the date of receipt of the Expiration Notice and ending on the Expiration
Date of this Option. In such case, the Exercise Price for the Shares shall be the quotient obtained
by dividing EUR 1,000,000.00 by the Fully Diluted Capitalization of the Company as of the
Expiration Date of this Option.
6. Method of Exercise. While this Option remains outstanding and exercisable, the
Beneficiary may exercise, in whole or in part, the subscription rights under this Option.
(a) Exercise Notice: The Beneficiary will submit to the Company a written notice
of exercise substantially in the form as Exhibit A (the "Exercise Notice") indicating (i) the
Beneficiary's intention to exercise its rights under the Option, (ii) the number of Shares to be
acquired in accordance with the terms and conditions under this Option and (iii) the details of the
Beneficiary for subscription purposes.
(b) Issuance of Shares: Within a period of five (5) Business Days following
receipt of the Exercise Notice the Company will resolve upon the issuance of such number of
Shares indicated by the Beneficiary in the Exercise Notice and to which the beneficiary is entitled
under this Option. The Company will inform the Beneficiary thereof by submission of (i) a copy
of such resolution and (ii) a form of the subscription declaration (the "Subscription
Declaration") substantially in the form as Exhibit B.
(c) Subscription of Shares: The Beneficiary will (i) execute the Subscription
Declaration in sufficiently certified (beglaubigt) form, (ii) submit it to the Company and (iii) pay
the aggregate Exercise Price for the number of Shares being subscribed for to the Company's
account as indicated in the Subscription Declaration without undue delay.
(d) Registration: Upon credit of the Exercise Price to the Company's bank
account, the Company will immediately register the issuance of the Shares to the Beneficiary with
the competent commercial register.
7. Authorized Capital (Genehmigtes Kapital). The Company agrees, during the term the
rights under this Option are exercisable, to reserve and keep available from its authorized Capital
(genehmigtes Kapital) created for the purpose of effecting the exercise of this Option (the
"Authorized Capital FI Option") such number of Shares as shall from time to time be sufficient
to effect the exercise of the rights under this Option. The Authorized Capital FI Option will not
be used for any other purpose than the issuance of Shares to the Beneficiary under this Option.
8. No Fractional Shares. No fractional Shares shall be issued upon the exercise of this
Option. The Parties will mutually agree on the allocation of any fractional amounts.
9. Representations of the Company and the Founder. The Company and the Founder
represent that all corporate actions on the part of the Company, its managing directors and
shareholders necessary for the granting of this Option and the Authorized Capital FI Option have
10. Representations and Warranties by the Beneficiary. The Beneficiary represents and
warrants to the Company as follows:
(a) The Beneficiary has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of the subscription to this
Option and to the Shares to be subscribed for pursuant to the terms of this Option.
(b) The Beneficiary is able to bear the economic risk of the purchase of the
subscription of Shares.
11. Transferability. Subject to compliance with the terms and conditions of this Section 11,
all rights and duties under this Agreement are transferable, in whole or in part, without charge to
the Beneficiary (except for transfer taxes). Any transfer of rights and/or duties under this
Agreement require the Company's prior written consent which may not unreasonably be withheld;
provided, however, that no such consent is required for transfers by the Beneficiary to an affiliate
within the meaning of §§ 15 et seq. of the German Act Stock Companies (Aktiengesetz)
("Affiliate"). As regards the transfer of rights and/or duties under this Agreement to an Affiliate
such consent is hereby granted.
12. Expiration of the Option. This Option shall expire and no longer be exercisable upon the
earlier of (a) the consummation of any Change of Control or (b) 5:00 p.m. Pacific time on the five
(5) year anniversary of the last closing of the Company’s next Qualified Equity Financing;
provided, however, that if, as of the date specified in clause (b), the Shares are not traded on an
over-the-counter market or stock exchange, the term of this Warrant shall be automatically
extended until the earlier of (i) 5:00 p.m. Pacific time on the date that is five (5) years from the
date specified in clause (b) or (ii) the consummation of any Change of Control (the "Expiration
Date"). The Company will provide the Beneficiary with at least ten (10) Business Days written
notice ("Expiration Notice") prior to any Change of Control. Any subscription rights that have
not been exercised by the Beneficiary on or prior to the Expiration Date shall be forfeited as of
the Expiration Date.
13. Reclassification, Reorganization and Merger. In case of any reclassification, capital
reorganization, merger or transformation of the Company, the Parties shall make appropriate
provision so that the Beneficiary shall have the right at any time prior to the expiration of this
Option to acquire, at a total price equal to that payable upon the exercise of this Option, such kind
and number of shares and other securities equaling the portion of the overall capital stock issued
in connection with such reclassification, reorganization, merger or transformation of the
Company as were to be acquired by the Beneficiary immediately prior to such reclassification,
reorganization, merger or transformation of the Company. In any such case appropriate
provisions shall be made with respect to the rights and interests of the Beneficiary so that the
provisions hereof shall thereafter be applicable with respect to any shares or other securities upon
exercise hereof, and appropriate adjustments shall be made to the Exercise Price payable
hereunder, provided the aggregate Exercise Price shall remain the same.
14. Notices. All notices hereunder shall be effective when given, and shall be deemed to be
given upon receipt or, if earlier, (a) five (5) days after deposit with any postal service, if delivered
by first class mail, postage prepaid, (b) upon delivery, if delivered by hand, (c) one (1) Business
Day after the Business Day of deposit with a reputable overnight courier, freight prepaid, or
(d) one (1) Business Day after the Business Day of facsimile transmission, if delivered by
facsimile transmission with copy by first class mail, postage prepaid, and shall be addressed (i) if
to the Beneficiary, at 548 Market St. # 30380, San Francisco, CA 94104, USA, Attn: Adeo Ressi,
(ii) if to the Company, at [INSERT ADDRESS], tel: [INSERT TELEPHONE NUMBER], fax:
[INSERT FAX NUMBER], and (iii) if to the Founder, at [INSERT ADDRESS], tel: [INSERT
TELEPHONE NUMBER], fax: [INSERT FAX NUMBER], or at such other address or facsimile
number as the respective Party shall have furnished in writing to the respective other Parties.
15. "Market-Stand Off" Agreement. The Beneficiary shall not sell or otherwise transfer,
make any short sale of, grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, of any stock (or other securities) of the
Company held by the Beneficiary (other than those included in the registration) during the one
hundred eighty (180) day period following the effective date of the registration statement for the
Company’s initial public offering (or such other period as may be requested by the Company or
an underwriter to accommodate regulatory restrictions on (i) the publication or other distribution
of research reports and (ii) analyst recommendations and opinions, provided that all directors of
the Company and all holders of at least one percent (1%) of the Company’s voting securities are
bound by and have entered into similar agreements. The Company may impose stop-transfer with
respect to the shares of stock (or other securities) subject to the foregoing restriction until the end
of such one hundred eighty (180) day (or other) period. The Beneficiary agrees to execute a
market standoff agreement with said underwriters in customary form consistent with the
provisions of this Section.
16. Governing Law. This Agreement shall be governed by the laws of Germany, without
regard to the conflicts of law provisions of any jurisdiction.
17. Binding Arbitration. All disputes arising in connection with this Agreement or its
validity shall be finally settled in accordance with the Arbitration Rules of the German Institution
of Arbitration e.V. (DIS) without recourse to the ordinary courts of law. The place of arbitration
is Berlin. The arbitral tribunal consists of one arbitrator. The substantive law of Germany is
applicable to the dispute and the language of the arbitral proceedings is English.
18. Amendments and Waivers. No modification of or amendment to this Agreement,
including this Section 18 nor any waiver of any rights under this Agreement, will be effective
unless in a writing signed by all Parties. Waiver by the Beneficiary of a breach of any provision of
this Agreement will not operate as a waiver of any other or subsequent breach.
19. No Impairment. The Company and the Founder shall not, by amendment of its articles of
association or through a reorganization, transfer of assets, consolidation, merger, dissolution,
issue, or sale of securities or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed under this Agreement by the
Company, but shall at all times in good faith assist in carrying out of all the provisions of this
Agreement and in taking all such action as may be necessary or appropriate to protect the
Beneficiary’s rights under this Agreement against impairment.
20. Co-operation of the Founder: The Founder undertakes to pass all shareholders'
resolutions and take all further actions required to enable the Beneficiary to effectively and
unlimitedly exercise all rights granted to the Beneficiary under the Option. The Founder shall
resolve upon any increase of the Company's registered share capital required for the issuance of
the Share under the Option, in particular, if and to the extent that the Authorized Capital FI
Option is not sufficient for the Beneficiary to acquire the full number of Shares under the Option
and/or if and when the Authorized Capital FI Option is terminated or expires. Further, the
Founder shall arrange for all future shareholders in the Company to fully comply with the
obligations of the Founder under this Agreement, in particular, all obligations under this
Section 20 and Section 19 above.
21. Damages. In the event of any default under this Agreement, the non-defaulting party may
proceed to protect and enforce its rights either by suit in equity and/or by action at law, including
but not limited to an action for damages as a result of any such default, and/or an action for
specific performance for any default where FI will not have an adequate remedy at law and where
damages will not be readily ascertainable. If the default consists in a failure to issue Shares to FI
upon exercise of the Option under this Agreement, FI is at least entitled to compensation of the
fair market value of the shares at the time of exercise less the relevant Exercise Price. This shall
not apply if the Company provides proof of lower damages incurred by FI.
22. Option to Terminate. The Company shall have the Option to terminate the Option by
making a payment to the Beneficiary in the amount of EUR 100,000.00.
23. Severability: If any provision of this Agreement is or becomes partly or fully invalid or
unenforceable, or if the Agreement does not include any important provisions, nothing in this
shall affect the validity and enforceability of the remaining provisions of this Agreement. The
Parties will replace the invalid or unenforceable provision, or fill the regulatory gap, with a
legally permissible provision which corresponds, to the best possible extent, to what the Parties
intended or would have agreed in accordance with the intention and purpose of this Agreement,
had they been aware of the invalidity or the gap. If the invalidity of a provision is caused by a
measure of performance or time (period or deadline) set forth therein, the provision shall be
deemed agreed with a legally permissible measure reaching as close as possible to the original
measure. It is the explicit will of the Parties that this severability clause shall not lead to a mere
shifting of the burden of proof but that § 139 BGB in its entirety shall be waived.
[Signature page follows]
NOTICE OF EXERCISE
TO: [INSERT COMPANY NAME]
[INSERT COMPANY ADDRESS]
1. The undersigned hereby elects to subscribe to [INSERT NUMBER OF SHARES]
Shares pursuant to the terms of the attached Option.
2. The details of the subscriber of the Shares are specified below:
(Erst nach Fassung des Kapitalerhöhungsbeschlusses zu unterzeichnen)
1. Die Geschäftsführung der [INSERT NAME AND CORPORATE DETAILS OF THE
COMPANY] (die "Gesellschaft") hat mit Beschluss vom [INSERT DATE OF MANAGEMENT
RESOLUTION] durch Ausnutzung des mit Gesellschafterbeschluss vom [INSERT DATE OF
AUTHORIZED CAPITAL], Ur.-Nr. [INSERT DEED NUMBER OF RESOLUTION] des Notars
[INSERT NAME OF THE NOTARY PUBLIC] in [INSERT PLACE OF BUSINESS OF NOTARY
PUBLIC] geschaffenen Genehmigten Kapitals entsprechend der Ermächtigung der
Gesellschafterversammlung die Erhöhung des Stammkapitals der Gesellschaft von EUR [INSERT
AMOUNT OF REGISTERED SHARE CAPITAL IMMEDIATELY PRIOR TO THE MANAGEMENT
RESOLUTION] um EUR [INSERT AMOUNT OF CAPITAL INCREASE] auf EUR [AGGREGATE
AMOUNT OF REGISTERED SHARE CAPITAL UPON MANAGEMENT RESOLUTION] erhöht.
2. Es wurden insgesamt [INSERT AGGREGATE NUMBER OF NEW SHARES] neue
Geschäftsanteile mit den laufenden Nummern [INSERT CONSECUTIVE NUMBERS OF NEW
SHARES] bis [INSERT CONSECUTIVE NUMBERS OF NEW SHARES] im Nennbetrag von je
EUR 1,00 ausgegeben. Die Nennbeträge sind jeweils ausschließlich in bar zu leisten.
3. Zur Übernahme der neuen Geschäftsanteile mit den laufenden Nummern [INSERT
CONSECUTIVE NUMBERS OF NEW SHARES] bis [INSERT CONSECUTIVE NUMBERS OF NEW
SHARES] wurde [INSERT NAME AND CORPORATE DETAILS OF THE SUBSCRIBER] (der
4. Der Übernehmer übernimmt hiermit die neu ausgegebenen Geschäftsanteile mit den
laufenden Nummern [INSERT CONSECUTIVE NUMBERS OF NEW SHARES] bis [INSERT
CONSECUTIVE NUMBERS OF NEW SHARES] und verpflichtet sich, einen Betrag in Höhe von
EUR [INSERT AGGREGATE AMOUNT OF THE EXERCISE PRICE] für die neuen
Geschäftsanteile innerhalb von fünf (5) Geschäftstagen (Berlin) auf das Konto der Gesellschaft
[INSERT FULL BANK DETAILS OF THE ACCOUNT TO WHICH THE PAYMENTS SHALL BE
MADE] zu leisten.
Ich, der unterzeichnete Notar, [INSERT NAME OF NOTARY PUBLIC], mit dem Amtssitz in [INSERT
PLACE OF BUSINESS OF THE NOTARY PUBLIC], beglaubige hiermit die vor mir vollzogene
Namensunterschrift von [INSERT NAME OF LEGAL REPRESENTATIVE OF THE SUBSCRIBER],
geboren am [INSERT DATE OF BIRTH], wohnhaft in [INSERT ADDRESS].
_______________, den ____________________
(To be signed only upon resolution on the increase of the Company's registered share capital)
1. By resolution dated [INSERT DATE OF MANAGEMENT RESOLUTION] and in
accordance with its authorization by the shareholders' meeting the management of [INSERT NAME
AND CORPORATE DETAILS OF THE COMPANY] (the "Company") has utilized the authorized
capital (genehmigtes Kapital) as created by shareholders' resolution dated [INSERT DATE OF
AUTHORIZED CAPITAL] (Deed-No. [INSERT DEED NUMBER OF RESOLUTION] of the notary
public [INSERT NAME OF THE NOTARY PUBLIC] in [INSERT PLACE OF BUSINESS OF
NOTARY PUBLIC] and resolved upon the increase of the registered share capital from [INSERT
AMOUNT OF REGISTERED SHARE CAPITAL IMMEDIATELY PRIOR TO THE MANAGEMENT
RESOLUTION] by EUR [INSERT AMOUNT OF CAPITAL INCREASE] to EUR [AGGREGATE
AMOUNT OF REGISTERED SHARE CAPITAL UPON MANAGEMENT RESOLUTION].
2. An aggregate number of [INSERT AGGREGATE NUMBER OF NEW SHARES] new
shares numbered [INSERT CONSECUTIVE NUMBERS OF NEW SHARES] to [INSERT
CONSECUTIVE NUMBERS OF NEW SHARES] with a nominal value of EUR 1.00 each was issued
by the management resolution. The nominal amounts are to be exclusively effected in cash.
3. [INSERT NAME AND CORPORATE DETAILS OF THE SUBSCRIBER] (the
"Subscriber") has been admitted to subscribe to the new shares numbered [INSERT
CONSECUTIVE NUMBERS OF NEW SHARES] to [INSERT CONSECUTIVE NUMBERS OF NEW
4. The Subscriber herewith subscribes to the new shares numbered [INSERT
CONSECUTIVE NUMBERS OF NEW SHARES] to [INSERT CONSECUTIVE NUMBERS OF NEW
SHARES] and undertakes to pay an amount of EUR [INSERT AGGREGATE AMOUNT OF THE
EXERCISE PRICE] on the new shares to the Company's bank account [INSERT FULL BANK
DETAILS OF THE ACCOUNT TO WHICH THE PAYMENTS SHALL BE MADE] within five (5)
business days (Berlin) as of the date of this Subscription Declaration.
I, the undersigned notary public, [INSERT NAME OF NOTARY PUBLIC], duly admitted and sworn
in with official place of business at [INSERT PLACE OF BUSINESS OF THE NOTARY PUBLIC],
herewith authenticate the signature given before me by [INSERT NAME OF LEGAL
REPRESENTATIVE OF THE SUBSCRIBER], born on [INSERT DATE OF BIRTH], resident at
_______________, this __________________________