Corporate Kit -- Deluxe Edition

The AllBusiness.com Practical Guide to Incorporation

Overview

Defined

A corporation is defined as a legal entity or structure created under the authority of the laws of a state consisting of a person or group of persons who become shareholders. The entity’s existence is considered separate and distinct from that of its members. Like a real person, a corporation can enter into contracts; sue and be sued; pay taxes separately from its owners; and do the other things necessary to conduct business. Since a corporation is an entity in its own right, it is liable for its own debts and obligations. As a result, providing that corporate formalities are followed, the corporation’s owners (the shareholders) typically enjoy limited liability and are legally shielded from the corporation’s liabilities and debts.

Life of a Corporation

The existence of a corporation is not dependent upon who the owners or investors are at any one time. Once formed, a corporation continues to exist as a separate entity even when shareholders die or sell their shares.

A corporation continues to exist until the shareholders decide to dissolve it or merge it with another business.

State Law

Corporations are subject to the laws of the state of incorporation and to the laws of any other state in which the corporation conducts business. Corporations may thus be subject to the laws of more than one state. All states have corporation statutes that set forth the ground rules as to how corporations are formed and maintained.

Where to Incorporate?

The laws governing corporations vary from state-to-state. As a result, a common question prior to incorporation is “Where should I incorporate?” The simple answer for the great majority of companies is that you should incorporate in the state in which your corporation intends to conduct the majority of its business. If you intend to do business in only one state, you should incorporate in that state.

Other Considerations

If you feel you might be interested in incorporating in a state other than the one in which your corporation will conduct the majority of its business, you will want to consider the following issues:

• What is the tax rate for the state(s) you are consideration for incorporation?
• What are the comparative costs of incorporation in a particular state versus the costs of registering to do business as a foreign corporation in that state?
• What are the corporate laws of the state with regard to the rights and responsibilities of corporate shareholders, officer, and directors?
• What are the corporate laws of the state regarding the rights of creditors?

When corporation laws were first being enacted by the states, several states purposely enacted laws to attract businesses to incorporate in their states even though the corporations would do business in other states. The first states in this group were New Jersey, Delaware, Maine, Arizona, and a few others. Today, Delaware is the clear winner. Close to one-half of all corporations listed on the New York Stock Exchange are incorporated in Delaware even though most of those corporations have their principal places of business elsewhere.

If you incorporate in one state and end up conducting most of your business in a different state, you will have to qualify to do business in that other state, which will involve more fees and costs, more filing requirements, and more paperwork. If your business actually conducts business in more than one state, or if it is a large, publicly held corporation, it can be worth the additional cost and time to incorporate in one state but operate in another state or states.

A corporation doing business in a state other than its state of incorporation is considered a foreign corporation. See Chapter 11 for a discussion about corporations qualifying to do business in states other than the state of incorporation.

Delaware

According to the Delaware Secretary of State, there are several reasons that so many companies choose to incorporate in Delaware:

• The Delaware General Corporation Law is one of the most advanced and flexible corporation statutes in the nation;
• Delaware courts and, the Court of Chancery in particular, have over 200 years of legal precedent as makers of corporation law;
• The state legislature takes its role seriously in keeping the corporation statute and other business laws current; and
• The office of the Secretary of State operates like a business rather than a government bureaucracy with modern systems and a customer-oriented staff.

GUIDE TO OPERATION OF NEWLY FORMED
CALIFORNIA CORPORATIONS

The purpose of this memorandum is to discuss certain procedures and operations relevant to a newly formed California corporation. The summaries below are not a complete analysis of the areas discussed, rather they are provided to give a basic understanding of the legal requirements which a California corporation should follow. Because this discussion is general in nature, it should not be relied upon as complete information regarding any of the matters discussed, but rather, should be used as a general guide.

1. Articles of Incorporation

   A California corporation is considered to be in existence when its Articles of Incorporation have been filed with the Secretary of State’s Office. Generally the Articles are brief, because very few items must be covered in the Articles to make them effective; however, there are many matters that the corporation might choose to include.

   The Articles must include the name of the corporation; a statement of business purpose; the name and address of the corporation’s initial agent for service of process; and a statement of the total number of shares of stock and a description of the different classes of stock (if there is more than one class).

   Certain provisions are only effective if contained in the Articles, such as granting the corporation the power to levy assessments on shares; granting shareholders preemptive rights; creating special qualifications for shareholders; limiting the corporation’s duration; increasing the required number of votes for actions by shareholders and directors over the amount set forth by statute; restricting the powers of the corporation or the businesses in which it may participate; giving debtholders voting rights; limiting certain liabilities of directors and permitting certain indemnification of corporate agents; and granting shareholders the right to determine the consideration for which corporate stock shall be issued.

   California law allows a corporation to amend the Articles in any way it desires, so long as the amendment is lawful at the time the corporation chooses to add it to the Articles. Before the corporation has issued its stock, the Articles may be amended by a writing signed by a majority of the incorporators, if directors have not been elected and have not been listed in the original Articles, or by a majority of the directors, if they have been elected or have been named in the original Articles. Once stock has been issued, the Articles generally may be amended or repealed by approval of the Board and a majority of the outstanding corporate stock entitled to vote. Once an amendment is adopted, the corporation must file a Certificate of Amendment with the Secretary of State to make the amendment effective.

CHECKLIST FOR
FORMATION OF A CALIFORNIA CORPORATION

 ENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
[NAME OF COMPANY]

[_______________], a corporation organized and existing under the laws of the State of Delaware (the “Corporation”), hereby certifies as follows:

FIRST: The name of the Corporation is [_______________]. The original Certificate of Incorporation of the Corporation was filed with the Secretary of State of the State of Delaware on ____________________, ____.

SECOND: Pursuant to Sections 228, 242 and 245 of the General Corporation Law of the State of Delaware, this Amended and Restated Certificate of Incorporation restates and integrates and further amends the provisions of the Certificate of Incorporation of the Corporation.

THIRD: The text of the original Certificate of Incorporation and any amendment and restatement thereto is hereby amended and restated to read in its entirety as follows:

ARTICLE I

The name of the Corporation is ______________________________.

ARTICLE II

The address of the registered office of the corporation in the State of Delaware is _____________________, in the City of ______________, County of __________________, and the name of its registered agent at that address is ______________________.

ARTICLE III

The purpose of the Corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of the State of Delaware.

ARTICLE IV

1. The Corporation is authorized to issue __________ shares of its capital stock, which shall be divided into two classes known as Common Stock, $.001 par value, and Preferred Stock, $.001 par value, respectively. The total number of shares of Common Stock which the Corporation is authorized to issue is ______. The total number of shares of Preferred Stock which the Corporation is authorized to issue is ________.
   
   
2. The Preferred Stock may be divided into such number of series as the Board of Directors may determine. The Board of Directors is authorized to determine and alter the rights, preferences, privileges and restrictions granted to and imposed upon any wholly unissued series of Preferred Stock, and to fix the number of shares of any series of Preferred Stock and the designation of any such series of Preferred Stock. The Board of Directors, within the limits and restrictions stated in any resolution or resolutions of the Board of Directors originally fixing the number of shares constituting any series, may increase or decrease (but not below the number of shares of such series then outstanding) the number of shares of any series subsequent to the issue of shares of that series. The first series of Preferred Stock shall be designated as Series A Preferred Stock (the “Series A Preferred Stock”), which shall consist of ____________________ shares, and shall have the rights, preferences, privileges and restrictions hereinafter provided. [Upon the filing of this __________ Amended and Restated Articles of Incorporation, each outstanding share of Common Stock shall be split and converted into ____ shares of Common Stock.]
   
   
3. The Corporation shall from time to time in accordance with the laws of the State of Delaware increase the authorized amount of its Common Stock if at any time the number of shares of Common Stock remaining unissued and available for issuance shall not be sufficient to permit conversion of the Preferred Stock in accordance with the applicable conversion provisions set forth herein.

ARTICLE V

The rights, preferences, privileges and restrictions granted to or imposed upon the respective classes of the Corporation’s shares of capital stock or the holders thereof are as follows:

1. Dividend Rights

1. on redemption of the Series A Preferred Stock;
   
   
2. on any event described in Article V.2 hereof;
   
   
3. on the public offering and close of the sale of any of the Corporation’s securities in a public offering which results in the automatic conversion of the Series A Preferred Stock pursuant to Article V.5.1(b) hereof; or
   
   
4. when and as declared by the Board.] Cumulative Dividends, if paid, or if declared and set apart for payment, must be paid on, or declared and set apart for payment on, all then outstanding shares of Series A Preferred Stock. After such Cumulative Dividends on the Series A Preferred Stock shall have been declared and paid or set apart for any one year, if the Board shall elect to declare additional dividends out of funds legally available therefor in excess of the Cumulative Dividends on the Series A Preferred Stock for the year in question, such additional dividends shall be declared in equal amounts per share on all then outstanding shares of the Series A Preferred Stock and the Common Stock; provided, however, that notwithstanding the foregoing, no dividends shall be paid or declared by the Corporation on the Common Stock without the prior written consent of the holders of at least a majority of the then outstanding Series A Preferred Stock to the payment of any such dividends.
   
   b. Subject to the rights of holders of all classes of stock at the time outstanding having prior rights as to dividends, the holders of the Common Stock shall be entitled to receive, when and as declared by the Board of Directors, out of any assets of the Corporation legally available therefor, such dividends as may be declared from time to time by the Board of Directors. No dividend shall be paid with respect to the Common Stock during any year until the Cumulative Dividends owed on the Series A Preferred Stock shall have been paid or declared and set apart during that year.
   
   c. Dividends shall be paid by forwarding a check, postage prepaid, to the address of each holder (or, in the case of joint holders, to the address of any such holder) of the Series A Preferred Stock and/or the Common Stock, as applicable, as shown on the books of the Corporation, or to such other address as such holder specifies for such purpose by written notice to the Corporation.
   

2. Liquidation Rights

In the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the holders of each share of Series A Preferred Stock then outstanding shall be entitled to receive, out of the assets of the Corporation available for distribution to its stockholders, before any amount shall be paid to holders of Common Stock, the Original Series A Issue Price for each share of Series A Preferred Stock (appropriately adjusted for any stock splits, stock dividends, combinations and similar events), plus their Cumulative Dividends (the “Liquidation Preference”). If, upon the occurrence of the liquidation, dissolution or winding up of the Corporation, the assets and surplus funds distributed among the holders of Series A Preferred Stock shall be insufficient to permit the payment to such holders of their Liquidation Preference, then the entire assets and surplus funds of the Corporation legally available for distribution shall be distributed ratably among the holders of Series A Preferred Stock. If, upon the occurrence of the liquidation, dissolution or winding up of the Corporation, after the payment to the holders of Series A Preferred Stock of their Liquidation Preference, assets or surplus funds remain in the Corporation, the holders of Series A Preferred Stock and the Common Stock shall be entitled to share in all such remaining assets and surplus funds in the same manner as if all shares of Series A Preferred Stock had been converted into Common Stock at the then effective Conversion Price (as defined in Section 5 below) immediately prior to the liquidation, dissolution or winding up of the Corporation.

At the election of the holders of a majority of the outstanding shares of the Series A Preferred Stock, for purposes of this Section 2, a liquidation, dissolution or winding up of the Corporation shall be deemed to be occasioned by, and to include, the Corporation’s sale, conveyance or disposition of all or substantially all of its assets or the effectuation by the Corporation (or third party acquirors) of a transaction or series of related transactions in which more than 50% of the voting power of the Corporation is disposed of, excluding transfers by the holders of the Series A Preferred Stock not...

CERTIFICATE OF INCORPORATION
OF
[Name of Corporation]

ARTICLE I

          The name of the corporation is [Name of Corporation].

ARTICLE II

          The address of the registered office of the corporation in the State of Delaware is _____________________________________.  The name of its registered agent at that address is ____________________________.

ARTICLE III

           The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

ARTICLE IV

           The total number of shares of stock which the corporation has authority to issue is ________ shares, all of which shall be Common Stock, $0.001 par value per share.

ARTICLE V

           The Board of Directors of the corporation shall have the power to adopt, amend or repeal Bylaws of the corporation, but the stockholders may make additional Bylaws and may alter or repeal any Bylaw whether adopted by them or otherwise.

ARTICLE VI

           Election of directors need not be by written ballot except and to the extent the Bylaws of the corporation shall so provide.

ARTICLES OF INCORPORATION
OF
[NAME OF CORPORATION]

ARTICLE I

The name of this corporation is: [Corporation Name].

ARTICLE II

The purpose of this corporation is to engage in any lawful act or activity for which a corporation may be organized under the General Corporation Law of California other than the banking business, the trust company business or the practice of a profession permitted to be incorporated by the California Corporations Code.

ARTICLE III

The name and complete business address in the State of California of this corporation's initial agent for service of process is:

[Agent]
[Building]
[Street]
[City, State Zip]

ARTICLE IV

This corporation is authorized to ...

BYLAWS OF

[NAME OF CORPORATION]

I.      Stockholders

1.  Annual Meetings. An annual meeting of stockholders shall be held for the election of directors at such date, time and place, either within or without the State of Delaware, as may be designated by resolution of the Board of Directors from time to time. Any other proper business may be transacted at the annual meeting.

2.  Special Meetings. Special meetings of stockholders for any purpose or purposes may be called at any time by the Board of Directors, or by a committee of the Board of Directors which has been duly designated by the Board of Directors and whose powers and authority include the power to call such meetings, but such special meetings may not be called by any other person or persons.

3. Notice of Meetings. Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by applicable law or the Certificate of Incorporation, the written notice of any meeting shall be given not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the mail, postage prepaid, directed to the stockholder at his or her address as it appears on the records of the Corporation.

4.  Adjournments. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

5.  Quorum. At each meeting of stockholders, except where otherwise provided by law or the Certificate of Incorporation or these Bylaws, the holders of a majority of the outstanding shares of stock entitled to vote at the meeting, present in person or by proxy, shall constitute a quorum. In the absence of a quorum, the stockholders so present may, by majority vote, adjourn the meeting from time to time in the manner provided in Section 1.4 of these Bylaws until a quorum shall attend. Shares of its own stock belonging to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of any corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity.

6.  Organization. Meetings of stockholders shall be presided over by the Chairman of the Board, if any, or in the absence of such person, the President, or in his or her absence by a Vice President, or in the absence of the foregoing persons, by a chairman designated by the Board of Directors, or in the absence of such designation, by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, but in his or her absence the chairman of the meeting may appoint any person to act as secretary of the meeting.

7.  Voting; Proxies. Unless otherwise provided by law or the Certificate of Incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by him which has voting power upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for him by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the Corporation. Unless otherwise required by law, voting at meetings of stockholders need not be by written ballot and need not be conducted by inspectors unless the Board of Directors, or holders of a majority of the outstanding shares of all classes of stock entitled to vote thereon present in person or by proxy at such meeting shall so determine. At all meetings of stockholders for the election of directors a plurality of the votes cast shall be sufficient to elect. All other elections and questions shall, unless otherwise provided by law or by the Certificate of Incorporation or these Bylaws, be decided by the vote of the holders of a majority of the outstanding shares of stock entitled to vote thereon present in person or by proxy at the meeting.

8.  Fixing Date for Determination of Stockholders of Record.

     (a)  In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not precede the date such record date is fixed and shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If no record date is fixed, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given. The record date for any other purpose other than stockholder action by written consent shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

     (b) In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten (10) days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. Any stockholder of record seeking to have the stockholders authorize or take corporate action by written consent shall, by written notice to the Secretary, request the Board of Directors to fix a record date. The Board of Directors shall promptly, but in all events within ten (10) days after the date on which such a request is received, adopt a resolution fixing the record date. If no record date has been fixed by the Board of Directors within ten (10) days of the date on which such a request is received, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by applicable law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or any officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation’s registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by applicable law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the date on which the Board of Directors adopts the resolution taking such prior action.

9.  List of Stockholders Entitled to Vote. The Secretary shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten (10) days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list of stockholders or the books of the Corporation, or to vote in person or by proxy at any meeting of stockholders.

10.  Inspectors of Elections; Opening and Closing the Polls.

     (a) If required by the Delaware General Corporation Law, the Board of Directors by resolution shall appoint one or more inspectors, which inspector or inspectors may include individuals who serve the Corporation in other capacities, including, without limitation, as officers, employees, agents or representatives of the Corporation, to act at the meeting and make a written report thereof. The procedures, oath, duties, and determinations with respect to inspectors shall be as provided....

BYLAWS
OF
[NAME OF CORPORATION]

BYLAWS
OF
[NAME OF CORPORATION]

I.

CORPORATE OFFICES

1.     PRINCIPAL OFFICE

The Board of Directors shall fix the location of the principal executive office of the corporation at any place within or outside the State of California. If the principal executive office is located outside California and the corporation has one or more business offices in California, then the Board of Directors shall fix and designate a principal business office in California.

2.    OTHER OFFICES

The Board of Directors may at any time establish branch or subordinate offices at any place or places.

II.

MEETINGS OF SHAREHOLDERS

1.    PLACE OF MEETINGS

Meetings of shareholders shall be held at any place within or outside the State of California designated by the Board of Directors. In the absence of any such designation, shareholders' meetings shall be held at the principal executive office of the corporation or at any place consented to in writing by all persons entitled to vote at such meeting, given before or after the meeting and filed with the Secretary of the corporation.

An annual meeting of shareholders shall be held each year on a date and at a time designated by the Board of Directors. At that meeting, directors shall be elected. Any other proper business may be transacted at the annual meeting of shareholders.

Special meetings of the shareholders may be called at any time, subject to the provisions of Sections 2.4 and 2.5 of these Bylaws, by the Board of Directors, the Chairman of the Board, the President or the holders of shares entitled to cast not less than ten percent (10%) of the votes at that meeting.

If a special meeting is called by anyone other than the Board of Directors or the President or the Chairman of the Board, then the request shall be in writing, specifying the time of such meeting and the general nature of the business proposed to be transacted, and shall be delivered personally or sent by registered mail or by other written communication to the Chairman of the Board, the President, any Vice President or the Secretary of the corporation. The officer receiving the request forthwith shall cause notice to be given to the shareholders entitled to vote, in accordance with the provisions of Sections 2.4 and 2.5 of these Bylaws, that a meeting will be held at the time requested by the person or persons calling the meeting, so long as that time is not less than thirty-five (35) nor more than sixty (60) days after the receipt of the request. If the notice is not given within twenty (20) days after receipt of the request, then the person or persons requesting the meeting may give the notice. Nothing contained in this paragraph of this Section 2.3 shall be construed as limiting, fixing or affecting the time when a meeting of shareholders called by action of the Board of Directors may be held.

All notices of meetings of shareholders shall be sent or otherwise given in accordance with Section 2.5 of these Bylaws not less than ten (10) (or, if sent by third-class mail pursuant to Section 2.5 of these Bylaws, not less than thirty (30)) nor more than sixty (60) days before the date of the meeting to each shareholder entitled to vote thereat. Such notice shall state the place, date, and hour of the meeting and (i) in the case of a special meeting, the general nature of the business to be transacted, and no business other than that specified in the notice may be transacted, or (ii) in the case of the annual meeting, those matters which the Board of Directors, at the time of the mailing of the notice, intends to present for action by the shareholders, but, subject to the provisions of the next paragraph of this Section 2.4, any proper matter may be presented at the meeting for such action. The notice of any meeting at which Directors are to be elected shall include the names of nominees intended at the time of the notice to be presented by the Board for election.

If action is proposed to be taken at any meeting for approval of (i) a contract or transaction in which a director has a direct or indirect financial interest, pursuant to Section 310 of the California Corporations Code (the Code), (ii) an amendment of the Articles of Incorporation, pursuant to Section 902 of the Code, (iii) a reorganization of the corporation, pursuant to Section 1201 of the Code, (iv) a voluntary dissolution of the corporation, pursuant to Section 1900 of the Code, or (v) a distribution in dissolution other than in accordance with the rights of any outstanding preferred shares, pursuant to Section 2007 of the Code, then the notice shall also state the general nature of that proposal.

Notice of a shareholders' meeting shall be given either personally or by first-class mail, or, if the corporation has outstanding shares held of record by five hundred (500) or more persons (determined as provided in Section 605 of the Code) on the record date for the shareholders' meeting, notice may be sent by third-class mail, or other means of written communication, addressed to the shareholder at the address of the shareholder appearing on the books of the corporation or given by the shareholder to the corporation for the purpose of notice; or if no such address appears or is given, at the place where the principal executive office of the corporation is located or by publication at least once in a newspaper of general circulation in the county in which the principal executive office is located. The notice shall be deemed to have been given at the time when delivered personally or deposited in the mail or sent by other means of written communication.

If any notice (or any report referenced in Article VII of these Bylaws) addressed to a shareholder at the address of such shareholder appearing on the books of the corporation is returned to the corporation by the United States Postal Service marked to indicate that the United States Postal Service is unable to deliver the notice to the shareholder at that address, all future notices or reports shall be deemed to have been duly given without further mailing if the same shall be available to the shareholder upon written demand of the shareholder at the principal executive office of the corporation for a period of one (1) year from the date of the giving of the notice.

An affidavit of mailing of any notice or report in accordance with the provisions of this Section 2.5, executed by the Secretary, Assistant Secretary or any transfer agent, shall be prima facie evidence of the giving of the notice or report.

6.    QUORUM

Unless otherwise provided in the Articles of Incorporation of the corporation, a majority of the shares entitled to vote, represented in person or by proxy, shall constitute a quorum at a meeting of the shareholders. The shareholders present at a duly called or held meeting at which a quorum is present may continue to transact business until adjournment notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum.

In the absence of a quorum, any meeting of shareholders may be adjourned from time to time by the vote of a majority of the shares represented either in person or by proxy, but no other business may be transacted, except as provided in the last sentence of the preceding paragraph.

Any shareholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of the majority of the shares represented at that meeting, either in person or by proxy.

When any meeting of shareholders, either annual or special, is adjourned to another time or place, notice need not be given of the adjourned meeting if its time and place are announced at the meeting at which the adjournment is taken. However, if the adjournment is for more than forty-five (45) days from the date set for the original meeting or if a new record date for the adjourned meeting is fixed, a notice of the adjourned meeting shall be given to each shareholder of record entitled to vote at the adjourned meeting in accordance with the provisions of Sections 2.4 and 2.5 of these Bylaws. At any adjourned meeting the corporation may transact any business which might have been transacted at the original meeting.

The shareholders entitled to vote at any meeting of shareholders shall be determined in accordance with the provisions of Section 2.11 of these Bylaws, subject to the provisions of Sections 702 through 704 of the Code (relating to voting shares held by a fiduciary, in the name of a corporation, or in joint ownership).

Elections for directors and voting on any other matter at a shareholders' meeting need not be by ballot unless a shareholder demands election by ballot at the meeting and before the voting begins.

Except as provided in the last paragraph of this Section 2.8, or as may be otherwise provided in the Articles of Incorporation, each outstanding share, regardless of class, shall be entitled to one vote on each matter submitted to a vote of the shareholders. Any holder of shares entitled to vote on any matter may vote part of the shares in favor of the proposal and refrain from voting the remaining shares or may vote them against the proposal other than elections to office, but, if the shareholder fails to specify the number of shares such shareholder is voting affirmatively, it will be conclusively presumed that the shareholder's approving vote is with respect to all shares which the shareholder is entitled to vote.

The affirmative vote of the majority of the shares represented and voting at a duly held meeting at which a quorum is present (which shares voting affirmatively also constitute at least a majority of the required quorum) shall be the act of the shareholders, unless the vote of a greater number or voting by classes is required by the Code or by the Articles of Incorporation.

At a shareholders' meeting at which directors are to be elected, a shareholder shall be entitled to cumulate votes either (i) by giving one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which that shareholder's shares are normally entitled or (ii) by distributing...

ACTION OF INCORPORATOR OF
[NAME OF CORPORATION]

The undersigned, being the sole Incorporator of the above-referenced corporation, pursuant to the authority vested in the Incorporator by the Delaware General Corporation Law, does hereby approve and adopt the following resolutions:

ADOPTION OF BYLAWS:

RESOLVED, that the Bylaws of this corporation in the form attached hereto are adopted as the Bylaws of this corporation.

ELECTION OF DIRECTORS:

RESOLVED, the following persons are elected as the initial directors of this ...

ACTION OF INCORPORATOR
OF
[NAME OF CORPORATION]

The undersigned, being the sole Incorporator of the above-referenced corporation, pursuant to the authority vested in the Incorporator by Section 210 of the California Corporations Code, does hereby approve and adopt the following resolutions:

ADOPTION OF BYLAWS:

RESOLVED, that the Bylaws of this corporation in the form attached hereto are adopted as the Bylaws of this corporation.

ELECTION OF DIRECTORS:

RESOLVED, the...

Stock Ledger
and
Capitalization Summary
of
[_________________]

STOCK CERTIFICATE– COMMON STOCK

Number C-__

[NAME OF CORPORATION]

A [ ] Corporation

*[# Issued]* Shares

Common Stock

This certifies that [SHAREHOLDER] is the record holder of [Number Issued] ( ) shares of Common Stock of [NAME OF CORPORATION] transferable only on the share register of the corporation, in person or by duly authorized attorney, upon surrender of this certificate properly endorsed or assigned.

This certificate and the shares represented hereby are issued and shall be held subject to all the provisions of the Articles of Incorporation and the By-laws of the corporation and any amendments thereto.

A statement of all of the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights may be obtained by any stockholder, upon request and without charge, at the principal office of the corporation.

WITNESS the signatures of its duly authorized officers this _______ day of __________, 20__.

[Name of Secretary], Secretary [Name of President], President

SEE RESTRICTIVE LEGENDS ON REVERSE

For Value Received ______________ hereby sells, assigns, and transfers unto, _____,
( ) shares represented by the within certificate and hereby irrevocably constitutes and appoints
___________________________ attorney to transfer....

Number P-__

[NAME OF CORPORATION]

A [ ] Corporation

*[# Issued]* Shares

Preferred Stock

This certifies that [SHAREHOLDER] is the record holder of [Number Issued] shares of Preferred Stock of [NAME OF CORPORATION] transferable only on the share register of the corporation, in person or by duly authorized attorney, upon surrender of this certificate properly endorsed or assigned.

This certificate and the shares represented hereby are issued and shall be held subject to all the provisions of the Articles of Incorporation and the By-laws of the corporation and any amendments thereto.

A statement of all of the powers, designations, preferences and relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights may be obtained by any stockholder, upon request and without charge, at the principal office of the corporation.

WITNESS the signatures of its duly authorized officers this _______ day of __________, 20__.

[Name of Secretary], Secretary [Name of President], President

SEE RESTRICTIVE LEGENDS ON REVERSE

For Value Received ________________ hereby sells, assigns, and transfers unto, ____________________, _________ ( ) shares represented by the within certificate and hereby irrevocably constitutes and appoints ________________________
attorney to transfer the said shares on the share register of the within named corporation with full power of substitution in the premises.

Dated , 20__

In presence of ______________________________ _________________________________

Witness Stockholder

NOTICE: THE SIGNATURE ON THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THIS CERTIFICATE, IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATSOEVER.

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED OR PLEDGED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING THAT SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID ACT. COPIES OF THE AGREEMENT, IF ANY, COVERING THE PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION.

THE RIGHTS, PREFERENCES, PRIVELEGES AND RESTRICTIONS....

NOTICE OF MEETING OF BOARD OF DIRECTORS OF
[NAME OF CORPORATION]

Members of the Board of Directors:

The Board of Directors of [Name of Corporation] will hold [its regular] [a special] meeting on [Date] at [Time] at [Place].

[This meeting will be held for the purpose of....

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF
[ NAME OF CORPORATION ]

NOTICE IS HEREBY GIVEN to all shareholders of [ Corporation's Name ] that:

The annual meeting of shareholders will be held on [ Date ] at [ Time ], at [ Place ], to consider and act upon the following matters:

[(a) Election of Directors of this corporation. The names of the nominee for Directors intended, at the time of this notice, to be presented by the Board for election at the meeting are: [ Names of nominees ].]

(b) [ Other matters ].

(c) To consider and act upon such other matters as may properly come before the meeting.

Pursuant to this corporation's Bylaws, the Board of Directors has fixed the close of business on [Date] as the record date for determination of shareholders entitled to notice of, and to vote at, the meeting or any adjournment thereof.

[Every shareholder is invited to attend the meeting in person. Shareholders who do not expect to attend....

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS OF
[NAME OF CORPORATION]

NOTICE IS HEREBY GIVEN to all shareholders of [Corporation’s Name] that:

1. A special meeting of shareholders has been called by the [Title] of this corporation for the purpose of transacting the following business: [Description of business].

2. The meeting will be held on [Date] at [Time], at ...

DECLARATION OF MAILING NOTICE
OF BOARD MEETING OF
[NAME OF CORPORATION]

I am the duly elected, qualified, and acting [Name of Office] of [Name of Corporation].

On [Date of Mailing], I caused to be mailed a Notice of Meeting of the Board of Directors of [Name of Corporation] to each of the members of the Board of Directors of this corporation, by depositing a...

DECLARATION OF MAILING NOTICE OF SHAREHOLDER MEETING

[NAME OF CORPORATION]

I am the duly elected, qualified, and acting [Secretary] [Assistant Secretary] of [Corporation's name].

On [Date of mailing], I caused to be mailed a Notice of [Annual] [Special] Meeting of Shareholders of [Corporation's name] to each shareholder entitled to vote at the meeting by depositing a true and correct copy of the notice (in the form attached hereto) in the United States mail at [City], [State], in a sealed envelope with postage prepaid, addressed to each shareholder at his/her last known address as listed in the records of this corporation or given to this corporation for the....

WAIVER OF NOTICE AND CONSENT TO HOLDING MEETING
OF BOARD OF DIRECTORS OF

[ NAME OF CORPORATION]

The undersigned shareholder(s) of [Corporation's Name], do hereby waive notice and consent to the holding of the [Annual] [Special] Meeting of Shareholders of such corporation on [Date] at [Time], at [Place], and agree that any business transacted at that meeting shall be as valid and legal and of the same force and effect as though said meeting were held after notice duly given.

The business conducted or to be conducted at that meeting includes...

MINUTES OF [REGULAR] [SPECIAL] MEETING OF THE
BOARD OF DIRECTORS OF

[NAME OF CORPORATION]

The Board of Directors of [Name of Corporation] held a [Regular] [Special] meeting on [Date], at [Time], at [Place].

The following directors were present and constituted a quorum of the Board: [Names].

The following directors were absent from the meeting: [None] [Names].

The following individuals also were present at the meeting: [Names and Titles].

[The chairman] [ ______________ acted as chairman and] called the meeting to order and announced that this meeting was held pursuant to a written notice of meeting which was given to all directors of this corporation. A Copy of this notice was ordered inserted in the corporation’s Minute Book immediately preceding the minutes of this meeting.

[If this meeting was held without notice, the following paragraph should be inserted, substitution the prior paragraph: The chairman called the meeting to order an announced that this meeting was held pursuant to written waiver of notice and consent to the holding of this meeting. The waiver and consent was presented to this meeting and, on a motion duly made, seconded, and [unanimously] carried, was made a part of the records and ordered inserted in the corporation’s Minute Book immediately preceding the records of this meeting.]

[The minutes of the last meeting of the last meeting of directors were then read and approved.] [The minutes of the last meeting, having been distributed to all directors, were approved as so distributed.]

[If applicable: The chairman stated that the election of officers was in order. The Board then proceeded....

The shareholders of [Corporation's Name] held [the/a] [Annual] [Special] Meeting of Shareholders on [Date] at [Time], at [Place].

Shareholders present at the meeting, in person or by proxy, represented ____ shares of common stock of the corporation.

The President of this corporation served as Chairman and called the meeting to order, and announced that a quorum was present and that this meeting was held pursuant to a written notice of meeting given to all shareholders of this corporation. A copy of this notice was ordered inserted in the minute book immediately preceding the minutes of this meeting.

[If the meeting was held without notice the following paragraph should be inserted, substituting the above: The President of this corporation called the meeting to order, and announced that the meeting was held pursuant to written waiver of notice and consent to the holding of the meeting. The waiver and consent was presented to this meeting and, on a motion duly made, seconded and unanimously carried, was made a part of the records and ordered inserted in the minute book immediately preceding the records of this meeting.]

[The minutes of the previous meeting of shareholders were then read and approved.] [It was then moved, seconded, and unanimously resolved to dispense with the reading of the minutes of the previous meeting.]

The President then announced that the election of directors was in order. Directors were then nominated to serve until the next annual meeting of shareholders, and until their successors were duly elected and qualified. The following nominations were made and seconded:

[Names]

No further nominations were made, and the above....

BOARD RESOLUTION APPROVING
SALE OF COMMON STOCK

SALE OF COMMON STOCK.

RESOLVED, that this corporation sell and issue its Common Stock to the persons and for the consideration set forth below; that the consideration for these shares shall be paid in full before their issuance and delivery and that such shares shall be deemed fully paid and nonassessable; that the Board has determined that the consideration reflected below reflects fair value for the shares; and that the entire consideration shall be credited to the appropriate accounts as determined by the accountant for or Chief Financial Officer of this corporation.

RESOLVED FURTHER, that the officers of this corporation are, and each acting alone is, hereby authorized and directed to issue to each shareholder of this corporation from time to time one or more share certificates of this corporation representing such shares of stock.

RESOLVED FURTHER, that it is contemplated that the offer and sale of this corporation''s Common Stock shall be exempt from qualification under the California Corporate Securities Law of 1968, and any other applicable state securities laws, and each officer of this corporation acting alone is authorized and directed to take all steps necessary or desirable to comply with the applicable legal requirements, including causing any required notice to be prepared, executed, and timely filed with the appropriate regulatory agency.

RESOLVED FURTHER, that it is contemplated that the offer and sale of this corporation''s Common Stock shall be exempt...

BOARD RESOLUTION
APPROVING S CORPORATION ELECTION

S CORPORATION ELECTION.

WHEREAS, it is in the best interest of this corporation and its shareholders to elect to be treated as an S Corporation, pursuant to the Internal Revenue Code and under the [state] tax code.

RESOLVED, that the officers of this corporation are, and each acting alone is, hereby authorized to do and perform any and all such acts, including execution of any and all documents and certificates, as such officers shall deem necessary or advisable, to carry out the purposes and intent of the foregoing resolutions.

RESOLVED FURTHER, that any actions taken by such officers prior to the date of the foregoing resolutions adopted hereby that are within the...

BOARD RESOLUTION
APPROVING BORROWING

APPROVAL OF BORROWING.

WHEREAS, this Board of Directors deems it desirable and in the best interests of this corporation to borrow [$ Amount] from ____________________ (the "Loan").

NOW, THEREFORE, BE IT RESOLVED, that this corporation borrow [$ Amount] from ____________________ ; that the annual interest rate of the Loan shall be [Rate %]; that the Loan shall mature ____________________; that the Loan shall be due and payable in full at the end of such period; and that the Loan shall be evidenced by a Loan Agreement (the "Loan Agreement") and promissory note substantially in the form attached hereto as Exhibit A (the "Note").

RESOLVED FURTHER, that the President or the Chief Financial Officer of this corporation are hereby authorized, directed and empowered to execute, for and on behalf of this corporation and in its name, any and all documents required in connection with the Loan, including but not limited to the Loan Agreement and the Note, substantially in the form attached hereto as Exhibit A, with such changes thereto as the person executing same shall approve, such approval to be conclusively evidenced by the execution and delivery thereof.

RESOLVED, that...

BOARD RESOLUTION
APPROVING AGREEMENT

APPROVAL OF AGREEMENT.

RESOLVED, that the form of __________ Agreement [presented to the Board of Directors] [in the form of Exhibit A] is hereby approved, and the officers of this corporation are, and each individually is, authorized and instructed, for and in the name of this corporation, to execute and deliver such Agreement in substantially the form [that was presented to the Board of Directors] [as contained in Exhibit A], with such changes thereto as the person executing the same shall approve, such approval to be conclusively evidenced by the execution and delivery thereof.

RESOLVED, that the officers of this corporation are, and each acting alone is, hereby authorized to do and perform any and all such acts, including execution of any and all documents and certificates, as such officers shall deem necessary or advisable, to carry out the purposes and intent of the foregoing resolutions.

RESOLVED FURTHER, that...

ACTION BY UNANIMOUS WRITTEN CONSENT
OF BOARD OF DIRECTORS OF
[ NAME OF CORPORATION]

WHEREAS, it is deemed desirable and in the best interests of this corporation that the following actions be taken by the Directors of this corporation pursuant to this Unanimous Written Consent:

NOW, THEREFORE, BE IT RESOLVED that, pursuant to applicable law, the undersigned, being all of the Directors of this corporation, hereby consent to, approve, and adopt the following:

[Insert Resolutions]

OMNIBUS RESOLUTIONS.

RESOLVED FURTHER, that the officers of this corporation be, and each individually is, hereby authorized to do and perform any and all such acts, including execution of any and all documents and certificates, as said officers shall deem necessary or advisable, to carry out the purposes of the foregoing resolutions.

ACTION BY UNANIMOUS WRITTEN CONSENT
OF BOARD OF DIRECTORS OF
[________________]

WHEREAS, it is deemed desirable and in the best interests of this corporation that the following actions be taken by the Directors of this corporation pursuant to this Unanimous Written Consent:

NOW, THEREFORE, BE IT RESOLVED that, pursuant to applicable law, the undersigned, being all of the Directors of this corporation, hereby consent to, approve, and adopt the following:

GRANT OF STOCK OPTIONS.

WHEREAS, the Board of Directors of this corporation has determined that it is in this corporation’s best interest to grant incentive stock options and nonqualified stock options to certain key employees, consultants, advisors and directors of this corporation under the corporation’s [name of stock option plan].

RESOLVED, that the Board of Directors hereby determines that the exercise price of this corporation’s Common Stock on the grant dates of each of the options set forth below shall be $_____ per share.

SHAREHOLDER RESOLUTION APPROVING SALE OF STOCK

SALE OF COMMON STOCK.

RESOLVED, that this corporation sell and issue its Common Stock to the persons and for the consideration set forth below; that the consideration for these shares shall be paid in full before their issuance and delivery and that such shares shall be deemed fully paid and nonassessable; that the Board has determined that the consideration reflected below reflects fair value for the shares; and that the entire consideration shall be credited to the appropriate accounts as determined by the accountant for or Chief Financial Officer of this corporation.

RESOLVED FURTHER, that the officers of this corporation are, and each acting alone is, hereby authorized and directed to issue to each shareholder of this corporation from time to time one or more share certificates of this corporation representing such shares of stock.

RESOLVED FURTHER, that it is contemplated that the offer and sale of this corporation''s Common Stock shall be exempt from qualification under applicable state securities laws, and each officer of this corporation acting alone is authorized and directed to take all steps necessary or desirable to comply with the applicable legal requirements, including causing any required notice to be prepared, executed, and timely filed with the appropriate regulatory agency.

RESOLVED FURTHER, that it is contemplated that the offer and sale of this corporation''s Common Stock shall be exempt from the registration requirements of the federal Securities Act of 1933, as amended, pursuant to Section 4(2), Section 3(a)(11), or Regulation D of that Act, as may be applicable, and that each officer of this corporation is hereby authorized and directed to take all steps necessary or desirable to qualify under an applicable exemption, including the filing of any Form D with the Securities and Exchange Commission.

RESOLVED, that the officers of this corporation are, and each acting alone is...

SHAREHOLDERS RESOLUTION

APPOINTING DIRECTOR TO FILL VACANCY

APPOINTMENT OF DIRECTOR TO FILL VACANCY.

WHEREAS, there is currently one vacancy on this Board of Directors.

NOW, THEREFORE, BE IT RESOLVED, that effective __________, 20__, ____________________ is hereby appointed and elected a Director of this corporation to fill the existing vacancy to serve until [his] [her] successor shall be duly elected, unless [he] [she] resigns, is removed, or is otherwise disqualified from serving as a director of this corporation.

RESOLVED, that the officers of this corporation are, and each acting alone is, hereby authorized to do and perform any and all such acts, including execution of any and all documents and certificates, as such officers shall deem necessary or advisable, to carry out the purposes and intent of the foregoing resolutions.

RESOLVED FURTHER, that any actions taken...

ACTION BY WRITTEN CONSENT OF STOCKHOLDERS
OF
[NAME OF CORPORATION]

WHEREAS, pursuant to the Delaware General Corporation Law and the Bylaws of this corporation, it is deemed desirable and in the best interests of this corporation that the following actions be taken by the stockholders of this corporation pursuant to this Written Consent.

NOW, THEREFORE, BE IT RESOLVED that the undersigned stockholders of this corporation hereby consent to approve and adopt the following:

RESOLVED, that the Bylaws, which were adopted and approved by the incorporator of this corporation and attached as an Exhibit to the Action of Incorporation are hereby ratified, approved and adopted as the Bylaws of this corporation.

[Insert additional Resolutions, such as approval of stock option plan, various agreements,
or any other appropriate matters]

RESOLVED FURTHER, that the officers of this corporation....

ACTION BY WRITTEN CONSENT OF SHAREHOLDERS
OF
[NAME OF CORPORATION]¹

WHEREAS, pursuant to the California Corporations Code and the Bylaws of this corporation, it is deemed desirable and in the best interests of this corporation that the following actions be taken by the Shareholders of this corporation pursuant to this Written Consent.

NOW, THEREFORE, BE IT RESOLVED that the undersigned Shareholders of this corporation hereby consent to approve and adopt the following:

RESOLVED, that the Bylaws, which were adopted and approved by the incorporator of this corporation and attached as an Exhibit to the Action of Incorporator are hereby ratified, approved and adopted as the Bylaws of this corporation.

[Insert additional Resolutions, such as approval of stock option plan, various agreements, or any other appropriate matters]

RESOLVED FURTHER, that the officers of this corporation are, and each acting alone is, hereby authorized to do and perform any and all such acts, including execution of any and all documents and certificates, as said officers shall deem necessary or advisable, to carry out the purposes of the foregoing resolutions.

RESOLVED FURTHER, that any actions taken by such officers prior to the date of the foregoing resolutions adopted hereby that are within the authority conferred thereby are hereby ratified, confirmed and approved as the acts and deeds of this corporation.

This written consent shall be...

             WHEREAS, pursuant to the applicable and the Bylaws of this corporation, it is deemed desirable and in the best interests of this corporation that the following actions be taken by the Shareholders of this corporation pursuant to this Written Consent:

             NOW, THEREFORE, BE IT RESOLVED that the undersigned Shareholders of this corporation hereby consent to, approve and adopt the following:

             [Insert Resolutions]

             RESOLVED FURTHER, that the officers of this corporation are, and each acting alone is, hereby authorized to do and perform any and all such acts, including execution of any and all documents and certificates, as said officers shall deem necessary or advisable, to carry out the purposes of the foregoing resolutions.

RIGHT OF FIRST REFUSAL AGREEMENT

This Right of First Refusal Agreement (this Agreement) is made on the date written below, by and among [Name of Company], a California corporation (the Company), and the parties listed as signatories hereto (the Holders).

In consideration of the mutual promises, covenants and conditions herein contained and for other good and valuable consideration, the parties hereto agree as follows:

1. "Board of Directors" means the Board of Directors of the Company and any committee thereof.

2. "Immediate Family" means any spouse, child, grandchild, parent, brother, or sister of a Holder.

3. "Shares" means any shares of capital stock of the Company or any securities convertible into or exchangeable for any class of capital stock of the Company and all securities into which such Shares may be converted or reclassified as a result of any merger, consolidation, stock split, stock dividend, or other recapitalization of the Company, whether now owned or hereafter acquired.

2. Restrictions on Transfer. No Holder may sell or engage in any transaction which has resulted in or will result in a change in the beneficial or record ownership of any Shares held by the Holder, including without limitation a voluntary or involuntary sale, assignment, transfer, pledge, hypothecation, encumbrance, disposal, loan, gift, attachment or levy (a Transfer), except as provided in this Agreement, and any such Transfer of Shares or attempted Transfer of Shares in contravention of this Agreement shall be void and ineffective for any purpose or confer on any transferee or purported transferee any rights whatsoever.

3. Right of First Refusal.

1. Each time a Holder proposes to Transfer (or is required by operation of law or other involuntary transfer) any or all of the Shares standing in such Holder''s name or owned by him or her during the term of this Agreement, such Holder shall first offer such Shares to the Company in accordance with the following provisions:
   
   
   1. Such Holder shall deliver a written notice (a Notice) to the Company stating (A) such Holder''s bona fide intention to Transfer such Shares, (B) the name and the address of the proposed transferee, (C) the number of Shares to be transferred, and (D) the purchase price per Share and terms of payment for which the Holder proposes to Transfer such Shares.
   2. Within 90 days after receipt of the Notice, the Company or its designee shall have the first right to purchase or obtain such Shares, upon the price and terms of payment designated in the Notice. If the Notice provides for the payment of non-cash consideration, the Company at its option may pay the consideration in cash equal to the Company''s good faith estimate of the present fair market value of the non-cash consideration offered.
   3. If the Company or its designee elects not to purchase or obtain all of the Shares designated in the selling Holder''s Notice, then the Holder may Transfer the Shares referred to in the Notice to the proposed transferee, providing such Transfer (A) is completed within 30 days after the expiration of the Company''s right to purchase or obtain such Shares, (B) is made at the price and terms designated in the Notice, and (C) the proposed Transferee agrees to be bound by the terms and provisions of this Agreement and to become a party to this Agreement immediately upon receipt of such Shares. If such Shares are not so transferred, the selling Holder must give notice in accordance with this paragraph prior to any other or subsequent Transfer of such Shares.
      
2. Notwithstanding Section 3(a), a Holder may Transfer Shares: (i) to a member of the Holder''s Immediate Family or to a trust established for the benefit of a member or members of the Holder''s Immediate Family, (ii) to an affiliate or equity holder of the Holder, (iii) to a person who is a constituent partner of the Holder on the date hereof, or (iv) to the estate of any of the foregoing by gift, will or intestate succession; provided that the Holder or his representative notifies the Company of such Transfer not less than 10 nor more than 90 days prior to the Transfer and that the proposed transferee agrees to be bound by the terms and provisions of this Agreement and to become a party to this Agreement immediately upon the receipt of such Shares.

4. No Transfer to Competitors. A Holder may not Transfer any Shares to a competitor of the Company, or to any shareholder, partner or other beneficial holder of an equity ownership interest in a competitor, other than pursuant to a merger, combination, or other transaction approved by the Board of Directors.

5.  California General Corporation Law. Notwithstanding any provisions to the contrary contained in this Agreement, the Company''s obligations to pay or complete payment for any Shares to be purchased by it under this Agreement is subject to its being legally permitted to do so under the tests contained in Sections 500 and 501 of the California General Corporation Law or any successor statute applicable thereto.

6.  Legend on Stock Certificates. Each certificate representing shares owned of record or beneficially by a party to this Agreement shall be endorsed with the following legend:

THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL AGREEMENT BETWEEN [NAME OF COMPANY] (THE COMPANY) AND THE HOLDERS THAT ARE SIGNATORIES THERETO, PROVIDING FOR, AMONG OTHER MATTERS, THE COMPANY'S RIGHT OF FIRST REFUSAL TO PURCHASE THE SECURITIES REPRESENTED BY THIS CERTIFICATE. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL BUSINESS OFFICE OF THE COMPANY.

Under no circumstances shall any Transfer of any Shares subject hereto be valid until the proposed transferee thereof shall have executed and become a party to this Agreement and thereby shall have become subject to....

RIGHT OF FIRST REFUSAL AGREEMENT

This Right of First Refusal Agreement (this Agreement) is made on the date written below, by and among [Name of Company], a Delaware corporation (the Company), and the parties listed as signatories hereto (the Holders).

In consideration of the mutual promises, covenants and conditions herein contained and for other good and valuable consideration, the parties hereto agree as follows:

1. Definitions. Certain terms used herein are defined as follows:

   1. "Board of Directors" means the Board of Directors of the Company and any committee thereof.

   2. "Immediate Family" means any spouse, child, grandchild, parent, brother, or sister of a Holder.

   3. "Shares" means any shares of capital stock of the Company or any securities convertible into or exchangeable for any class of capital stock of the Company and all securities into which such Shares may be converted or reclassified as a result of any merger, consolidation, stock split, stock dividend, or other recapitalization of the Company, whether now owned or hereafter acquired.

2. Restrictions on Transfer. No Holder may sell or engage in any transaction which has resulted in or will result in a change in the beneficial or record ownership of any Shares held by the Holder, including without limitation a voluntary or involuntary sale, assignment, transfer, pledge, hypothecation, encumbrance, disposal, loan, gift, attachment or levy (a Transfer), except as provided in this Agreement, and any such Transfer of Shares or attempted Transfer of Shares in contravention of this Agreement shall be void and ineffective for any purpose or confer on any transferee or purported transferee any rights whatsoever....