SAFE

Simple Agreement for Future Equity | Based on Y Combinator Standard

SIMPLE AGREEMENT FOR FUTURE EQUITY
(Valuation Cap / Discount - Select One)

THIS CERTIFIES THAT in exchange for the payment by [Investor Name] (the "Investor") of USD/EUR [Purchase Amount] (the "Purchase Amount") on or about [Date], [Company Name], a [Delaware corporation / German GmbH] (the "Company"), issues to the Investor the right to certain shares of the Company's Capital Stock, subject to the terms described below.

1. DEFINITIONS

"Capital Stock" means the capital stock of the Company, including, without limitation, Common Stock, Preferred Stock, and any securities conferring the right to purchase shares of Common Stock or Preferred Stock.

"Change of Control" means (i) a transaction or series of related transactions in which any "person" or "group" (within the meaning of Section 13(d) and 14(d) of the Securities Exchange Act of 1934), becomes the "beneficial owner" directly or indirectly, of more than 50% of the outstanding voting securities of the Company; (ii) a merger or consolidation in which the Company is not the surviving corporation; or (iii) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, of all or substantially all of the assets of the Company.

"Conversion Price" means the either: (i) the Safe Price or (ii) the Discount Price, whichever calculation results in a greater number of shares of Safe Preferred Stock.

"Discount Price" means the price per share of the Standard Preferred Stock sold in the Equity Financing multiplied by the Discount Rate.

"Discount Rate" means [100% minus the Discount, e.g., 80% for 20% discount].

"Dissolution Event" means (i) a voluntary termination of operations; (ii) a general assignment for the benefit of the Company's creditors; or (iii) any other liquidation, dissolution or winding up of the Company (excluding a Liquidity Event), whether voluntary or involuntary.

"Equity Financing" means a bona fide transaction or series of transactions with the principal purpose of raising capital, pursuant to which the Company issues and sells Preferred Stock at a fixed valuation, including but not limited to, a pre-money or post-money valuation (a "Priced Round").

"Liquidity Event" means a Change of Control or an Initial Public Offering.

"Liquidity Price" means the price per share equal to the Valuation Cap divided by the Liquidity Capitalization.

"Pro Rata Rights Agreement" means a written agreement between the Company and the Investor (and holders of other Safes, as appropriate) giving the Investor a right to purchase its pro rata share of private placements of securities by the Company occurring after the Equity Financing, subject to customary exceptions.

"Safe Preferred Stock" means the shares of the series of Preferred Stock issued to the Investor in an Equity Financing, having the identical rights, privileges, preferences and restrictions as the shares of Standard Preferred Stock, other than with respect to: (i) the per share liquidation preference and the initial conversion price for purposes of price-based anti-dilution protection, which shall equal the Conversion Price; and (ii) the basis for any dividend rights, which shall be based on the Conversion Price.

"Safe Price" means the price per share equal to the Valuation Cap divided by the Company Capitalization.

"Valuation Cap" means USD/EUR [Valuation Cap Amount].

2. EVENTS

2.1 Equity Financing.

If there is an Equity Financing before the termination of this Safe, on the initial closing of such Equity Financing, this Safe will automatically convert into the number of shares of Safe Preferred Stock equal to the Purchase Amount divided by the Conversion Price.

In connection with the automatic conversion of this Safe into shares of Safe Preferred Stock, the Investor will execute and deliver to the Company all of the transaction documents related to the Equity Financing; provided, that such documents (i) are the same documents to be entered into with the purchasers of Standard Preferred Stock, with appropriate variations for the Safe Preferred Stock if applicable, and (ii) have customary exceptions to any drag-along applicable to the Investor, including (without limitation) parsing: no requirement that the Investor agree to any non-competition covenant, release of claims or any similar restrictive covenants.

2.2 Liquidity Event.

If there is a Liquidity Event before the termination of this Safe, this Safe will automatically be entitled (subject to the liquidation priority set forth in Section 2.2(a) below) to receive a portion of Proceeds, due and payable to the Investor immediately prior to, or concurrent with, the consummation of such Liquidity Event, equal to the greater of (i) the Purchase Amount (the "Cash-Out Amount") or (ii) the amount payable on the number of shares of Common Stock equal to the Purchase Amount divided by the Liquidity Price (the "Conversion Amount").

(a) Liquidation Priority. In a Liquidity Event, this Safe is intended to operate like standard non-participating Preferred Stock. The Investor's right to receive its Cash-Out Amount is:
(i) Junior to payment of outstanding indebtedness and creditor claims, including convertible promissory notes (but not including other Safes);
(ii) On par with payments to holders of other Safes and Preferred Stock on a pari passu basis; and
(iii) Senior to payments to holders of Common Stock.

2.3 Dissolution Event.

If there is a Dissolution Event before the termination of this Safe, the Investor will automatically be entitled (subject to the liquidation priority set forth in Section 2.2(a) above) to receive a portion of Proceeds equal to the Cash-Out Amount, due and payable to the Investor immediately prior to the consummation of the Dissolution Event.

2.4 Termination.

This Safe will automatically terminate (without relieving the Company of any obligations arising from a prior breach of or non-compliance with this Safe) immediately following the earliest to occur of: (i) the issuance of Capital Stock to the Investor pursuant to the automatic conversion of this Safe under Section 2.1; or (ii) the payment, or setting aside for payment, of amounts due the Investor pursuant to Section 2.2 or Section 2.3.

3. COMPANY REPRESENTATIONS

3.1 The Company is a corporation duly organized, validly existing and in good standing under the laws of [Delaware / Germany], and has the power and authority to own, lease and operate its properties and carry on its business as now conducted.

3.2 The execution, delivery and performance by the Company of this Safe is within the power of the Company and has been duly authorized by all necessary actions on the part of the Company (subject to GmbHG Section 46 shareholder approval requirements, if applicable). This Safe constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms.

3.3 The performance and consummation of the transactions contemplated by this Safe do not and will not: (i) violate any material judgment, statute, rule or regulation applicable to the Company; (ii) result in the acceleration of any material indebtedness owed by the Company; or (iii) result in the creation or imposition of any lien on any property, asset or revenue of the Company.

3.4 No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority is required on the part of the Company in connection with the consummation of the transactions contemplated by this Safe, except for (i) filings pursuant to Regulation D of the Securities Act, if applicable, and (ii) the filing of any notice that may be required under applicable state or federal securities laws.

4. INVESTOR REPRESENTATIONS

4.1 The Investor has full legal capacity, power and authority to execute and deliver this Safe and to perform its obligations hereunder. This Safe constitutes valid and binding obligation of the Investor, enforceable in accordance with its terms.

4.2 The Investor is an accredited investor as such term is defined in Rule 501 of Regulation D under the Securities Act, and acknowledges and agrees that if not an accredited investor at the time of an Equity Financing, the Company may void this Safe and return the Purchase Amount.

4.3 The Investor has been advised that this Safe and the underlying securities have not been registered under the Securities Act, or any state or foreign securities laws and, therefore, cannot be resold unless they are registered under the Securities Act and applicable state or foreign securities laws or unless an exemption from such registration requirements is available.

5. MISCELLANEOUS

5.1 Amendment. Any provision of this Safe may be amended, waived or modified by written consent of the Company and either (i) the Investor or (ii) the majority-in-interest of all then-outstanding Safes with the same "Post-Money Valuation Cap" and "Discount Rate" as this Safe (and Safes that different only in the "Purchase Amount" shall be considered identical).

5.2 Severability. In the event any one or more of the provisions of this Safe is for any reason held to be invalid, illegal or unenforceable, in whole or in part or in any respect, or in the event that any one or more of the provisions of this Safe operate or would prospectively operate to invalidate this Safe, then and in any such event, such provision(s) only will be deemed null and void and will not affect any other provision of this Safe.

5.3 Governing Law. This Safe and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of [Delaware / Germany], without giving effect to principles of conflicts of law. For German GmbH entities, GmbHG and BGB shall apply.

5.4 Dispute Resolution. Any dispute arising under this Safe shall be resolved by binding arbitration under JAMS / DIS rules in [City, State/Country].

5.5 Counterparts. This Safe 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. Electronic signatures shall be treated as originals for all purposes.

5.6 Entire Agreement. This Safe constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.

6. PRO RATA RIGHTS (Optional)

If the Investor is a Major Investor (defined as an Investor who has purchased Safes in an aggregate amount of at least USD/EUR [Threshold, e.g., 100,000]), the Investor shall have the right to purchase its Pro Rata Share (as defined below) of any New Securities (as defined below) that the Company may issue after the Equity Financing.

"Pro Rata Share" means the ratio of (a) the number of shares of Capital Stock owned by the Investor immediately prior to the issuance of New Securities to (b) the total number of outstanding shares of Capital Stock on a fully diluted basis immediately prior to such issuance.

This right shall be subject to customary exceptions including: (i) securities issued to employees, directors, or consultants; (ii) securities issued in connection with strategic transactions; and (iii) securities issued pursuant to the conversion of Safes or convertible notes.

7. MFN PROVISION (Optional - Most Favored Nation)

If the Company issues any subsequent Safes or convertible securities with more favorable terms (including a lower valuation cap, higher discount, or additional rights) prior to the Equity Financing, this Safe shall automatically be amended to include such more favorable terms, at the Investor's option.

The Company shall notify the Investor within 5 business days of issuing any such subsequent securities and provide copies of the relevant agreements for comparison.

SIGNATURES

COMPANY:

[Company Name]

By: [Authorized Signatory]

Title: [CEO / Geschaeftsfuehrer]

Date: [Date]

Address: [Company Address]

Email: [Email]

INVESTOR:

[Investor Name]

By: [Name]

Title: [Title, if entity]

Date: [Date]

Address: [Investor Address]

Email: [Email]

LEGAL DISCLAIMER / RECHTLICHER HINWEIS

TEMPLATE - NOT LEGAL ADVICE: This SAFE is based on the Y Combinator standard form but is modified for educational purposes. This is NOT a substitute for legal advice.

VORLAGE - KEINE RECHTSBERATUNG: Dieses SAFE basiert auf dem Y Combinator Standardformular, wurde aber zu Bildungszwecken angepasst. Dies ersetzt KEINE Rechtsberatung.

Consult a securities attorney before using. SAFE agreements may not be enforceable in all jurisdictions.
Konsultieren Sie einen Wertpapieranwalt vor Verwendung. SAFE-Vereinbarungen sind moeglicherweise nicht in allen Jurisdiktionen durchsetzbar.

Regulatory references: SEC Reg D | GmbHG | EU Prospectus Regulation