Venture Capital Package

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:

Amendment and Restatement of Articles of Incorporation

WHEREAS, it is deemed to be advisable and in the best interests of the Corporation and its shareholders that the Corporation’s Articles of Incorporation be amended and restated in order to:

1. authorize series of Preferred Stock designated as Series A Preferred Stock, consisting of ________ authorized shares;
2. set forth the rights, preferences and privileges of such Preferred Stock; and
3. make certain other changes.

RESOLVED FURTHER, that the officers of the Corporation be, and each of them hereby is, authorized, empowered and directed, on behalf of the Corporation, to submit the Restated Articles to the shareholders of the Corporation for consideration thereof; and

RESOLVED FURTHER, that, following approval of the Restated Articles by the shareholders of the Corporation, the officers of the corporation be, and each of them hereby is, authorized, empowered and directed, on behalf of the Corporation, to execute the Restated Articles and to have the Restated Articles filed with the California Secretary of State. Series A Preferred Stock Financing

WHEREAS, there has been presented to this Board of Directors a Series A Preferred Stock Purchase Agreement (the "Purchase Agreement"), by and among the Corporation and the Purchasers listed on Exhibit A thereto (collectively, the “Purchasers”) pursuant to which the Purchasers agree to purchase from the Corporation an aggregate of _______________ shares of Series A Preferred Stock (the "Series A Stock") for $_____ per share; and

WHEREAS, there has been presented to this Board of Directors a Rights Agreement (the "Rights Agreement"), by and among the Corporation, the holders of Series A Preferred Stock and the Founder named therein (“Founder”) providing, among other things, for certain restrictions on the transfer and for certain registration rights with respect to the Series A Preferred Stock and certain shares of Common Stock;

WHEREAS, there has been presented to this Board of Directors a Voting Agreement (the "Voting Agreement"), by and among the Corporation, the Founder and the holders of Preferred Stock listed therein, a Right of First Refusal and Co-Sale Agreement (the “Right of First Refusal and Co-Sale Agreement”) by and among...

ACTION BY WRITTEN CONSENT OF THE SHAREHOLDERS OF
[COMPANY NAME]

In accordance with applicable law and the Bylaws of [company name], a [state of incorporation] corporation (the "Corporation"), the undersigned shareholders of the Corporation hereby adopts the following resolutions by written consent, effective for all purposes as of the date first set forth below:

Amendment and Restatement of Articles of Incorporation

WHEREAS, it is deemed to be advisable and in the best interests of the Corporation and its shareholder that the Corporation’s Articles of Incorporation be amended and restated in order to: (i) authorize series of Preferred Stock designated as Series A Preferred Stock, consisting of ________ authorized shares; (ii) set forth the rights, preferences and privileges of such Preferred Stock; and (iii) make certain other changes.

NOW, THEREFORE, BE IT RESOLVED, that the proposed amendments to the Articles of Incorporation of the Corporation set forth above are hereby authorized and approved and that the officers of the Corporation be, and each of them hereby is, authorized and empowered to execute all such instruments, documents and certificates and to take such other actions as they may deem necessary, advisable or proper to amend and restate the Articles of Incorporation of the Corporation as set forth herein.

Issuance and Sale of Series A Preferred Stock

WHEREAS, it is deemed to be advisable and in the best interests of the Corporation and its shareholder that the Corporation enter into a Series A Preferred Stock Purchase Agreement by and between the Corporation, and the Purchasers listed on Exhibit A thereto...

AMENDMENT AND RESTATEMENT OF CERTIFICATE OF INCORPORATION Pursuant to ____________________ law, a corporation, whenever desired, may integrate into a single instrument all of the provisions of its certificate of incorporation which are then in effect and operative as a result of filings made with the Secretary of State and, at the same time, it may also, with the requisite shareholder approval, further amend in any respect its certificate of incorporation. Based upon this statutory authority, the Board of Directors has approved a resolution recommending that the Company's shareholders amend and restate the Company's Amended Certificate of Incorporation to, among other things, (i) authorize the issuance of 45,000,000 shares of Class A Common Stock, $0. 10 par value per share, which Class A Common Stock will be identical to the Company's outstanding Common Stock, except for certain restrictions on its transferability, and (ii) effect a one-for-two, thousand reverse split of the Company's Common Stock. A copy of the proposed Certificate of Incorporation of the Company, as amended and restated, is attached hereto as Exhibit ""B"".

Re: Board Observation Rights

Ladies and Gentlemen:
This letter will confirm our agreement that pursuant to your purchase of shares of Series __ Preferred Stock of _________________ (the “Company”), ______________________ (“Investor”) will be entitled to the following rights, in addition to the rights specifically provided in the documents between the Company and Investor of even date herewith.

1. Investor shall be entitled to consult with management of the Company on significant business issues, including management’s proposed annual operating plans, and management will meet with a representative(s) of Investor regularly during each year at mutually agreeable times for such consultation and to review progress in achieving said plans.
2. Investor may examine the books and records of the Company and inspect its facilities and may request information at reasonable times and intervals concerning the general status of the Company’s financial condition and operations provided that access to highly confidential proprietary information and facilities need not be provided.
3. The Company shall give a representative of Investor copies of all notices, minutes, consents, and other material that it provides to its directors at or about the same time as delivered to the directors; provided, however, that the Company reserves the right to exclude such representative from access to any material or portion thereof if the Company believes that such exclusion is reasonably necessary to preserve the attorney-client privilege or to protect highly confidential proprietary information. The representative of the Investor shall have the right to attend in a non-voting observer status all meetings of the Board of Directors of the Company and all meetings of any material nature of the committees of the Board. . .

4.11 Form: Equity Investment

Due Diligence Request Form

DUE DILIGENCE DOCUMENT REQUEST LIST

For: ________________________ (Target Company).
Date: _______________________

We would like to examine certain documents in connection with our due diligence review of ________________(together with all subsidiaries and predecessors, the "Company").  Unless otherwise indicated, please provide the requested documents for all periods subsequent to the inception of the Company ...

etc.

4.11 Form: Equity Investment

Due Diligence Request Form

DUE DILIGENCE DOCUMENT REQUEST LIST

For: ________________________ (Target Company).
Date: _______________________

We would like to examine certain documents in connection with our due diligence review of ________________(together with all subsidiaries and predecessors, the "Company").  Unless otherwise indicated, please provide the requested documents for all periods subsequent to the inception of the Company ...

etc.

9.03[2] Form of Investor Stock Purchase Agreement [NAME OF CORPORATION] SERIES A PREFERRED STOCK PURCHASE AGREEMENT This Agreement is made as of __________, 20_____, among __________, a __________ corporation (the ""Company""), and the persons and entities listed on the Schedule of Purchasers attached hereto as Exhibit A (the ""Purchasers""). SECTION 1 Authorization and Sale of Preferred Stock 1.1 Authorization. The Company will authorize the sale and issuance of up to __________ shares (the ""Shares"") of its Series A Convertible Preferred Stock (the ""Preferred""), having the rights, privileges, preferences and restrictions as set forth in the Certificate of Amendment of the Articles of Incorporation (the ""Certificate"") in the form attached to this Agreement as Exhibit B. The shares of Common Stock into which the Shares will be convertible are referred to herein as the ""Conversion Stock."" 1.2 Sale of Preferred. Subject to the terms and conditions hereof, the Company will severally issue and sell to each of such Purchasers, and the Purchasers will severally buy from the Company, the total number of shares of Preferred specified opposite such Purchaser's name in column 2 of the Schedule of Purchasers, at the aggregate purchase price set forth in column 3 of the Schedule of Purchasers.

17.04 Form: Standard Term Sheet [CORPORATION] SERIES ___ PREFERRED STOCK TERM SHEET General Company: __________, a __________ corporation. Amount: $__________ million. Security: Series ___ Convertible Preferred Stock (the ""Series ___ Preferred""), convertible into shares of the Company's Common Stock. The term ""shares"" in this term sheet includes the Series ___ Preferred and the Common Stock issued or issuable upon conversion of the Series ___ Preferred. Price: $__________ per share (the ""Purchase Price""). Pre-Money Valuation: The Purchase Price represents a pre-money valuation of $__________ million, assuming a fully diluted capitalization as set forth on Schedule A, including __________ shares to be reserved for subsequent issuance under the Company's stock option plans.

[Name of Company]

PREFERRED STOCK PURCHASE AGREEMENT

Dated as of ____________________

PREFERRED STOCK PURCHASE AGREEMENT

Preferred Stock Purchase Agreement (this "Agreement"), dated as of ________________, by and among __________________, a Delaware corporation (the "Company"), and the purchasers listed on Schedule 1.1 hereto (the "Purchasers").

ARTICLE 1

PURCHASE AND SALE OF STOCK

SECTION 1.1 Delivery. Subject to the provisions of this Agreement, the Purchasers agree to purchase at the Closing (as defined below), and the Company agrees to sell and issue to the Purchasers at the Closing, shares of Series A Preferred Stock (the "Shares") of the Company, for the purchase price of $_____ per share. The name and address of each Purchaser, and the number of Shares to be acquired by each Purchaser, are set forth in Schedule 1.1. The purchase and sale of Shares shall take place at the offices of the Company at 10:00 a.m. West Coast time, on ________________ or at such other time and place as the Company and a majority-in-interest of the Purchasers agree upon in writing (which time and place are designated as the "Closing" and which date is designated as the "Closing Date"). At the Closing the Company shall deliver to each Purchaser a certificate representing the Shares which such Purchaser is purchasing against delivery to the Company by such Purchaser by wire transfer, certified check or immediately available funds, or other manner of payment approved by the Company, in the amount of the purchase price therefor payable to the Company's order.

SECTION 1.2 Subsequent Sales of Shares. At any time up to 180 days following the Closing, the Company may sell up to __________ shares of additional Series A Preferred Stock to such additional investors as may be approved by the Board of Directors of the Company. All such sales shall be made on the terms and conditions set forth in this Agreement. Any Shares sold pursuant to this Section 1.2 shall be deemed to be "Series A Preferred Stock" and shall be deemed to be "Shares" sold pursuant to this Agreement, any purchasers thereof shall be deemed to be "Purchasers" for all purposes under this Agreement, and any such subsequent sale shall be deemed to occur at a "Closing" and the date of any such Closing shall be deemed to be a "Closing Date." The new purchasers shall become parties to this Agreement by signing a counterpart signature page hereto.

ARTICLE 2

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants that, except as set forth in the Disclosure Schedule attached hereto:

SECTION 2.1 Organization, Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has full corporate power and corporate authority to own, lease and operate its property and assets and to conduct its business as presently conducted and as proposed to be conducted by it. The Company has full corporate power and corporate authority to enter into and perform its obligations under this Agreement, the Rights Agreement in the form of Exhibit B hereto (the "Rights Agreement") and the Co-Sale Agreement (as defined below) (collectively, the "Transaction Documents"), and to carry out the transactions contemplated by the Transaction Documents. The nature of the Company's business and its ownership or leasing of property do not require that the Company become qualified as a foreign corporation in any state or jurisdiction other than where the failure to so qualify will not have a material adverse impact on the Company. Complete and correct copies of the Amended and Restated Certificate of Incorporation (the "Restated Certificate") and By-laws of the Company, as amended to date, have been delivered to counsel for the Purchasers.

SECTION 2.2 Capitalization.

1. The capital stock of the Company consists of:
   1. ____________ shares of authorized preferred stock, par value $.001 per share ("Preferred Stock"), ____________ shares of which are designated Series A Preferred Stock, of which no shares are issued and outstanding prior to the Closing Date.
   2. ____________ shares of authorized common stock, par value $.001 per share ("Common Stock"), of which ____________ shares are issued and outstanding as of the date of this Agreement; ____________ shares are reserved for issuance pursuant to employee stock purchase and/or option ownership plans that have been adopted by the Company for officers, directors, employees and consultants; and ____________ shares are reserved for issuance upon conversion of the Shares.
      
      
2. Set forth in Schedule 2.2 hereto is a complete and correct list of all security holders of the Company, showing their holdings of issued and outstanding shares of Company securities (including options and warrants) as of the date of this Agreement. To the knowledge of the Company, each such holder is the sole beneficial owner of all of the shares as to which such holder is the record holder. The outstanding shares of Common Stock are duly authorized, validly issued, fully paid and non-assessable. Except as set forth in Schedule 2.2 or the Rights Agreement, holders of shares of the Company's Common Stock and Preferred Stock have no preemptive rights. Except for the transactions contemplated by this Agreement and its exhibits, and except as set forth in Schedule 2.2, there are

   1. no outstanding warrants, options, convertible securities or rights to subscribe for or purchase any capital stock or other securities from the Company,
   2. to the Company's knowledge, no voting trusts or voting agreements among, or irrevocable proxies executed by, stockholders of the Company,
   3. no existing rights of stockholders to require the Company to register any securities of the Company or to participate with the Company in any registration by the Company of its securities,
   4. to the Company's knowledge, no agreements among stockholders providing for the purchase or sale of the Company's capital stock and
   5. no obligations (contingent or otherwise) of the Company to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend or make any other distribution in respect thereof.

SECTION 2.3 Validity of Stock. The Shares to be sold pursuant to this Agreement, when issued, sold, and delivered in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and non-assessable. The shares of Common Stock issuable upon conversion of the Shares have been duly and validly reserved for issuance and, upon issuance in accordance with the terms of the Restated Certificate, will be duly and validly issued, fully paid and non-assessable.

SECTION 2.4 Subsidiaries. The Company does not own any capital stock, partnership interests or other equity interests of, or control, directly or indirectly, any other corporation, partnership, association or business entity.

SECTION 2.5 Financial Statements. The Company has furnished the Purchasers with its unaudited balance sheet as of ____________ (the "Current Balance Sheet") and its unaudited statement of operations and statement of cash flows for the ______ period ended _________, ____ (collectively, the "Financial Statements"). Except as set forth in Schedule 2.5, the Financial Statements are true and correct in all material respects, have been prepared in accordance with the books and records of the Company, and, except as set forth on Schedule 2.5, have been prepared in accordance with generally accepted accounting principles ("GAAP") consistently applied, and fairly present the financial position and cash flows of the Company as of such date and the results of its operations for the periods then ended.

The tangible assets designated on the Current Balance Sheet are shown thereon at actual cost, less depreciation and amortization, and, in the case of plant and equipment, are in good operating condition and state of repair in all material respects. All accounts receivable (if any) shown on the Current Balance Sheet constitute accounts receivable resulting from the sale of goods and services in the ordinary course of business, and, to the knowledge of the Company, such accounts receivable are subject to no conditions as to payment, offsets, counterclaims, defenses of any kind, returns, allowances, or credits other than to the extent of the allowance for doubtful accounts shown thereon.

SECTION 2.6 Insurance. Set forth on Schedule 2.6 is a true and complete list of all current insurance policies of the Company.

SECTION 2.7 Authorization; Approvals. All action on the part of the Company and its stockholders necessary for the authorization, execution, delivery, and performance of all its obligations under the Transaction Documents and for the authorization, issuance, and delivery of the Shares being sold under this Agreement, has been taken. Each of the Transaction Documents constitutes the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms. The Company has obtained or will obtain prior to the Closing all necessary consents, authorizations, approvals and orders, and has made all registrations, qualifications, designations, declarations or filings with all federal, state, or other relevant governmental authorities, required on the part of the Company in connection with the consummation of the transactions contemplated by the Transaction Documents.

SECTION 2.8 No Conflict with Other Instruments. The execution, delivery and performance of each of the Transaction Documents does not and will not result in any violation of, conflict with, or constitute a default under any term or provision of (i) the Restated Certificate or Bylaws; (ii) any judgment, decree or order to which the Company is a party or by which its property is bound; (iii) any agreement, contract, understanding, indenture or other instrument to which the Company is a party, the effect of which would give rise to a material adverse effect on the Company; or (iv) any statute, rule or governmental regulation applicable to the Company or any of its property.

SECTION 2.9 Absence of Undisclosed Liabilities; Changes.

1. Except as provided in documents referred to in Section 2.15 hereto or reflected in the Current Balance Sheet, the Company has no liability or obligation, which individually or in the aggregate exceeds $50,000, absolute or contingent, including, without limiting the generality of the foregoing, any tax liabilities due or to become due, except:

   1. obligations and liabilities incurred after the date of the Current Balance Sheet in the ordinary course of business that are not individually or in the aggregate material,
   2. obligations under contracts made in the ordinary course of business and
   3. obligations under this Agreement. Without limiting the generality of the foregoing, the Company does not know of, and has no reasonable ground to believe that there is any basis for the assertion against the Company of, any material liabilities of the Company not provided for in the documents described in Section 2.15 or reflected in the Current Balance Sheet.

2. Since the date of the Current Balance Sheet, except as contemplated by this Agreement or as disclosed in the Schedules hereto, the Company has been operated in the ordinary and usual course of business, and there has not been:

   1. any material change in the (A) assets, liabilities, condition (financial or otherwise), business or prospects of the Company from that reflected in the Current Balance Sheet, or (B) operating results of the Company from that reflected in the Current Balance Sheet;
   2. any damage, destruction or loss, whether or not covered by insurance, affecting in any material way the assets, properties, condition (financial or otherwise), operating results, prospects or business of the Company (as such business is presently conducted and as it is proposed to be conducted);
   3. any waiver by the Company of a material right or of a material debt owed to it;
   4. any satisfaction or discharge....

[NAME OF COMPANY]

SERIES A PREFERRED STOCK PURCHASE AGREEMENT

This Series A Preferred Stock Purchase Agreement (this "Agreement"), is made as of __________, ____ by and among [Name of Company], a Delaware corporation (the "Company"), and the undersigned purchasers (the "Purchasers").

NOW, THEREFORE, the parties hereto hereby agree as follows:

1. Authorization and Sale of Preferred Shares.

1.1 Authorization. The Company has duly authorized the sale and issuance of up to __________ shares of its Series A Preferred Stock having the rights, privileges and preferences set forth in the Company's Amended and Restated Certificate of Incorporation (the "Amended Certificate") in the form attached hereto as Exhibit A.

1.2 Sale of Preferred. Subject to the terms and conditions hereof, the Company shall issue and sell to the Purchasers, and each Purchaser agrees, severally, to purchase at the Closing, from the Company, an aggregate of _______ shares of Series A Preferred Stock (collectively, the "Shares"), at a purchase price of $____ per share. The amount to be purchased by each Purchaser and the form of consideration therefor is set forth in the Schedule of Purchasers attached as Schedule 1.

2. Closing Date; Delivery.

2.1 Closing Date. The closing of the purchase and sale of the Shares hereunder (the "Closing") shall be held at the offices of ___________________, at______________________, _______________, ______________, at __:___ [a.m.] [p.m.], __________, 20__ or at such other time and place as is mutually agreed to by the parties hereto (the date of the Closing is hereinafter referred to as the "Closing Date").

2.2 Delivery. Subject to the terms of this Agreement, at the Closing, the Company will deliver to the Purchasers a certificate representing the number of Shares being purchased by the Purchasers, which certificate shall be registered in the name of the Purchasers, against payment in full by the purchasers of the purchase price therefor by check or such other form of payment as shall be mutually agreed upon by the Purchasers and the Company, payable to the order of the Company.

3. Representations and Warranties.

The Company hereby represents and warrants to the Purchasers that:

3.1 Organization and Standing. The Company is a corporation duly organized and validly existing under the laws of the State of Delaware, is in good standing under such laws and is qualified to do business in California. The Company has all requisite power and authority to own and operate its properties and assets and to conduct its business as presently conducted and as proposed to be conducted. The Company is qualified or licensed and in good standing as a foreign corporation in all jurisdictions where the nature of its business or property makes such qualification or licensing necessary and the failure to be so qualified or licensed could materially adversely affect the business, earnings, prospects, properties or condition (financial or other) of the Company. True, complete and accurate copies of the Company's Certificate of Incorporation, Bylaws and all amendments to each to date have been delivered to counsel for the Purchasers and the Company has provided such counsel with copies of the minutes of all meetings, and all consents in lieu of meetings, of the Board of Directors and stockholders of the Company. Prior to the Closing, the Company shall have properly filed the Amended Certificate with the Secretary of State of Delaware and the same shall be in full force and effect.

3.2 Capitalization.

1. The authorized capital stock of the Company at the Closing will be __________ shares of common stock ("Common Stock") and __________ shares of preferred stock ("Preferred Stock"), all of which shares of Preferred Stock will be designated Series A Preferred Stock; of such authorized shares of capital stock of the Company, __________ shares of Common Stock and __________ shares of Series A Preferred Stock will be issued and outstanding at the Closing. The Preferred Stock has the rights, preferences and privileges set forth in the Amended Certificate.
2. All issued and outstanding shares have been, and as of the Closing Date will be, duly authorized, validly issued, fully paid and nonassessable, are and were, and as of the Closing Date will have been, offered, issued, sold and delivered by the Company in compliance with all applicable state and federal laws concerning the issuance of securities.
3. There are no outstanding rights, subscriptions, calls, options, warrants, preemptive rights, conversion rights or agreements granted or issued by or binding upon the Company for the purchase or acquisition (contingent or otherwise) from the Company of any shares of its capital stock or any other securities, except in accordance with the terms of this Agreement. The Company is not subject to any obligation (contingent or otherwise) to purchase or otherwise acquire or retire any shares of its capital stock or any security convertible into or exchangeable for any shares of its capital stock. No holder of Common Stock or Preferred Stock or any other security of the Company or any other person or entity is entitled to any preemptive right, right of first refusal or similar right as a result of the issuance of the Shares or otherwise, except as set forth therein. There is no voting trust, agreement or arrangement among any of the beneficial holders of Common Stock or Preferred Stock of the Company affecting the exercise of the voting rights of such stock.

3.3 Corporate Power; Authorization. The Company has all requisite power and authority to enter into this Agreement and the other documents and agreements contemplated herein, to sell the Shares hereunder, and to carry out and perform its obligations under the terms of this Agreement and the other documents and agreements contemplated herein. All corporate action on the part of the Company and its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement and the other documents and agreements contemplated herein, for the performance of the Company's obligations hereunder, for the consummation of the transactions contemplated herein, and for the authorization, issuance and delivery of the Shares and the Common Stock issuable upon conversion thereof has been taken or will be taken prior to the Closing. This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms. As of the Closing Date, this Agreement and the other documents and agreements contemplated herein, will have been duly executed and delivered by the Company, and all parties thereto (other than the Purchasers), and will constitute legal, valid and binding obligations of the Company and such other parties, enforceable against each of them in accordance with their terms.

3.4 Subsidiaries. The Company does not presently own, of record or beneficially, or control, directly or indirectly, any capital stock or equity interest in any corporation, association or business entity. The Company is not, directly or indirectly, a participant in any joint venture or partnership.

3.5 Validity of Securities. The Shares, when issued, sold and delivered in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and nonassessable and will be free and clear of any preemptive rights, security interests, claims, liens or encumbrances created by the Company. The Common Stock issuable upon conversion of the Shares has been, or prior to the Closing will be, duly and validly reserved and, upon issuance in accordance with the terms of this Agreement and the Amended Certificate, will be duly and validly issued, fully paid and nonassessable and will be free and clear of any preemptive rights, security interests, restrictions on transfer, claims, liens or encumbrances other than restrictions under applicable and state securities laws.

3.6 Governmental Consents.

1. No consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, or notice to any federal, state or local governmental or public authority or agency on the part of the Company is or was required....

2.11A Right of First Refusal and Co-Sale Agreement This Right Of First Refusal And Co-Sale Agreement is entered into as of the day of _____, 20__ by and among ____________, a ________________ corporation (the ""Company""), ____________________ (the ""Founder"") and the undersigned holders (the ""Purchasers"") of Series A Preferred Stock of the Company (the ""Preferred Shares""). PRELIMINARY STATEMENTS A. The Company and the Purchasers [and the Founder] are parties to the Series A Preferred Stock Purchase Agreement of even date herewith, pursuant to which the Purchasers are purchasing shares of the Company's Series A Preferred Stock; B. The Founder is the beneficial owner of the number of shares of Common Stock of the Company set forth opposite his/her name on Schedule A hereto; and

STOCKHOLDER VOTING AGREEMENT

This Stockholder Voting Agreement is made by and among ________________________, a __________ corporation (the "Company"), the persons listed on the signature line hereof as the "Common Stockholders" (collectively, the "Common Stockholders") and, the persons listed in the signature line hereof as the "Series A Stockholders" (collectively, the "Series A Stockholders").

WHEREAS, the Common Stockholders are the holders of a majority of the Company's Common Stock and, the Series A Stockholders are acquiring shares of the Company's Series A Preferred Stock pursuant to a Series A Preferred Stock Purchase Agreement of even date herewith (the "Series A Purchase Agreement"); and

WHEREAS, the Bylaws of the Company have been amended on the date hereof to provide for a Board of Directors consisting of five (5) directors;

WHEREAS, the Common Stockholders and the Series A Stockholders desire that the Board of Directors of the Company be comprised of designated representatives as provided in this Agreement; and

NOW, THEREFORE, in consideration of the covenants set forth herein, the parties hereto agree as follows:

SECTION 1. Definitions. For purposes of this Agreement the following terms shall have the meanings set forth below:

"Common Stockholders' Shares." The shares of Common Stock issued and owned by the Common Stockholders as of the date hereof and any additional securities of the Company acquired by any of the Common Stockholders that are entitled to vote for the election of directors of the Company acquired during the term of this Agreement.

"Series A Stockholders' Shares." The shares of Series A Preferred Stock issued and owned by the Series A Preferred Stockholders as of the date hereof, any Common Stock acquired upon conversion thereof, and any additional securities of the Company acquired by the Series A Stockholders that are entitled to vote for the election of directors acquired during the term of this Agreement.

"Shares." The Common Stockholders' Shares and the Series A Stockholders' Shares, collectively.

SECTION 2. Agreement to Constitute Board.

1. Each of the parties hereby agrees and covenants to vote all of the Shares then held, as is necessary at a meeting of stockholders or by written consent in lieu of meeting, to cause to be elected or appointed to the Board of Directors of the Company:

   1. the Company's Chief Executive Officer, who on the date hereof is ___________________________;

   2. ___________________________, so long as he continues to hold at least __ shares of Common Stock and who also shall serve as Chairman of the Board;

   3. the ______________________ Representative, which shall consist of one (1) designee selected by ______________________ and its affiliates, which Representative on the date hereof is [______________________];

   4. the Series A Representative, which shall consist of one (1) designee selected by a majority in interest of the holders of Series A Shares, which Representative on the date hereof is ______________________; and

   5. a person with experience relevant to the Company's business, chosen by a majority-in-interest of the other directors, which person on the date hereof is ______________________.

2. In the event of any vacancy on the Board of Directors, the Stockholders will vote their Shares to fill such vacancy with a nominee designated in the same manner as the person who held the directorship so vacated. The Stockholders agree that no director may be removed from office without the approval of the party(ies) who have the right to designate such director....

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

CONVERTIBLE PROMISSORY NOTE

[Principal Amount]

1. Maturity. Subject to Section 2, principal and any accrued but unpaid interest under this Note shall be due and payable upon demand by the Holder at any time after __________ (the “Maturity Date”). Notwithstanding the foregoing, the entire unpaid principal sum of this Note, together with accrued and unpaid interest thereon, shall become immediately due and payable upon the insolvency of the Company, the commission of any act of bankruptcy by the Company, the execution by the Company of a general assignment for the benefit of creditors, the filing by or against the Company of a petition in bankruptcy or any petition for relief under the federal bankruptcy act or the continuation of such petition without dismissal for a period of 90 days or more, or the appointment of a receiver or trustee to take possession of the property or assets of the Company.
   
   
2. Conversion.
   1. Investment by the Holder. The entire principal amount of and accrued interest on this Note shall be converted into shares of the Company’s equity securities (the “Equity Securities”) issued and sold at the close of the Company’s next equity financing in a single transaction or a series of related transactions yielding gross proceeds to the Company of at least $_________ in the aggregate the conversion of the Notes with a fully diluted pre-money valuation of the Company being at least $____ (the “Next Equity Financing”). The number of shares of Equity Securities to be issued upon such conversion shall be equal to the quotient obtained by dividing (i) the entire principal amount of this Note plus accrued interest by (ii) the price per share of the Equity Securities...

7.05 Term Sheet for Venture Capital Investment

The following term sheet summarizes the principal terms typically included in a venture capital financing:

Term Sheet for Start-Up Company Financing

Security      Preferred Stock, Series A

Proceeds and Price per Share  As negotiated.

Terms of Preferred Stock

Dividends

 Annual per share dividend of [8-10%] of the purchase price of the Preferred Stock prior to any distribution with respect to Common Stock, payable when and if declared by Board. Dividends are usually not cumulative (i.e., if not declared in any year, they are lost and not carried forward to the next year). For any other dividends or distributions, Preferred Stock participates with Common Stock on an as converted basis.

etc.

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

Warrant No.:
Number of Shares:
Date of Issuance:
(subject to adjustment)

[Name of Company]
WARRANT TO PURCHASE SHARES OF COMMON STOCK

THIS CERTIFIES THAT, for value received, ________________ and its permitted assignees are entitled to subscribe for and purchase ________ shares of the fully paid and nonassessable Common Stock (as adjusted from time to time pursuant to the provisions of this Warrant), the “Shares”) of [Name of Company] (the “Company”), at the price and terms set forth below. As used herein, the term “Date of Grant” shall mean the Date of Grant listed on the signature page hereof.

1. Amount of Shares, Exercise Price and Term:
   (a) This Warrant is exercisable for the following amounts, exercise price and terms:
   
   Number of Shares __________
   Exercise Price per Share $_______
   Last Day to Exercise with Respect to these Shares (Midnight, West Coast Time) _____________________
   
   
2. Warrant Price.
   The price at which this Warrant may be exercised shall be as set forth in Section 1, and such other price as shall result, from time to time, from the adjustments specified in Section 5 hereof is herein referred to as the “Warrant Price” or “Warrant Price”.
   
   
3. Method of Exercise; Payment; Issuance of New Warrant.
   Subject to Section 1 hereof, the purchase right represented by this Warrant may be exercised by the holder hereof, in whole or in part and from time to time, at the election of the holder hereof, by (a) the surrender of this Warrant (with the notice of exercise substantially in the form attached hereto as Exhibit 1 duly completed and executed) at the principal office of the Company and by the payment to the Company, by certified or bank check, by wire transfer to an account designated by the Company (a “Wire Transfer”), or by the cancellation by the holder hereof of indebtedness or other obligations of the Company to such holder of an amount equal to the then applicable Warrant Price multiplied by the number of Shares then being purchased, or (b) if in connection with a registered public offering of the Company’s securities, the surrender of this Warrant (with the notice of exercise form attached hereto as Exhibit 1 duly completed and executed) at the principal office of the Company together with notice of arrangements reasonably satisfactory to the Company for payment to the Company either by certified or bank check....