Startup Kit

CHECKLIST FOR OFFICE LEASES

1. Space:

(a) What is the rentable square footage?
(b) What is the usable square footage?
(c) Is rent based on usable or rentable square footage?
(d) Verify square footage number provided by the landlord.

2. Permitted Uses of the Premises:

(a) What uses of the premises are permitted?
(b) Is the permitted use clause broad enough for possible changes in the business?
(c) Is the permitted use clause broad enough for potential assignments or subleases?
(d) Can the use clause be drafted to include “any lawful purposes”?
(e) Can uses be changed with landlord’s consent, which consent can’t be unreasonably withheld or delayed?

3. Primary lease term:

(a) What is the commencement date of the lease?
(b) What happens if the space is not ready on the commencement date? Is there rent abatement, monetary damages, right to cancel the lease, or other remedies specified?
(c) What is the termination date?
(d) Does the landlord have the right to terminate early without cause?
(e) Does the tenant have the right to terminate early by payment of a fee?

4. Rentals:

(a) What is the base rent for the primary term?
(b) Are there escalation clauses?
(c) Are there cost of living increases?
(d) Is there a cap on any rent increases?
(e) Is there a reasonable grace period and written notice before a late charge is imposed?

5. Common area maintenance, HVAC, and Operating costs:

(a) What does the tenant have to contribute for common area maintenance, ventilating, heating, air conditioning, and other building operation costs?
(b) Is there a cap?
(c) Can the amount be increased each year?
(d) Real estate taxes and other impositions:
     (i) Does the tenant have to pay a portion of the real estate taxes?
     (ii) What increases over base year are allowed?
     (iii) Is there a cap on tax increases?
     (iv) Does the tenant have to pay increased taxes that may occur on sale of the building?
(e) Are there any special provisions or exceptions on the payment of these expenses?
(f) When is payment due?
(g) What detailed reports does the landlord have to provide the tenant showing the actual expenses?
(h) What audit rights does the tenant have to review the landlord’s books and records?
(i) Are there provisions made for weekend and holiday service? What are the charges?
(j) Does the tenant have a remedy for service interruption?

6. Tenant Improvements:

(a) What tenant improvements will be necessary?
(b) What is the cost?
(c) How much time will it take to complete the tenant improvements?
(d) Will the landlord contribute to the cost for the tenant improvements?
(e) What approvals will be necessary?
(f) What permits will be necessary?
(g) Does the landlord or the tenant own any improvements?

7. Repairs and replacements:

(a) What responsibility does the tenant have for repairs or replacements?
(b) What responsibility does the landlord have for repairs or replacements?
(c) At the end of the tenancy, is tenant’s obligation to return the premises in same condition at the beginning of tenancy, excluding (1) ordinary wear and tear, (2) damage by fire and other unavoidable casualty, and (3) alterations previously approved by landlord?

8. Utilities:

(a) Direct supply or individually metered?
(b) Method of computing payment?

9. Assignment and subletting:

(a) Is the landlord’s written approval required?
(b) What standard is there for approval? absolute discretion? reasonable approval?
(c) Does the landlord have the right to cancel the lease if notified of a proposed assignment of sublease?
(d) If the assignment or sublet is at a higher price than the base rent, who keeps the excess? or what split is there?
(e) Can the lease be assigned to affiliates of the tenant without landlord approval?
(f) Can the landlord terminate the lease if the stock ownership of the tenant changes?

10. Subordination and attornment:

(a) All present or future mortgages?
(b) Execution of estoppel certificates required?
(c) Tenant agrees to attorn to landlord’s successor in interest?

11. Destruction:

(a) Is there a right of cancellation for the tenant in the event of destruction?
(b) What obligation does the landlord have to rebuild?
(c) Does the tenant share in any proceeds from insurance?

12. Indemnity and Disclaimer:

(a) Indemnity mutual or tenant only?
(b) Waiver of claims mutual or tenant only?
(c) Waiver of subrogation?
(d) Landlord liability limited to interest in property?

13. Default:

(a) Does the tenant have a cure period after notice of a breach?
(b) What remedies are available for breach?

14. Landlord’s warranties:

(a) Quiet enjoyment of premises by the tenant?
(b) First...

CHECKLIST OF DIFFERENT TYPES OF INSURANCE
AVAILABLE FOR A SMALL BUSINESS

COMPARISON CHART FOR DIFFERENT BUSINESS ENTITIES

Letter Agreement to Maintain Confidentiality of Information

[Name]
[Street Address]
[City, State Zip]

Re: Confidentiality Agreement

Gentlemen:

You have requested information from Newco, Inc. (the “Company”) in connection with your consideration of a possible transaction involving you and the Company. Because we are furnishing such information to you, we are requiring that you agree, as set forth below, to treat confidentially such information, and any other information we or our agents furnish to you, whether furnished before or after the date of this letter (collectively, the “Confidential Material”).

You agree the Confidential Material will be used only for purposes of considering the transaction referred to in the first paragraph of this letter and will not be used by you in any way detrimental to the Company. You also agree the Confidential Material will be kept confidential by you and your agents; provided, however, that (i) any of such information may be disclosed to your officers, directors, general partners, employees, counsel, investment bankers and other of your representatives who need to know such information for the purpose of evaluating a possible transaction between us (it being understood you will direct such officers, directors, general partners, employees, counsel, investment bankers and other representatives to treat such information confidentially), and (ii) any disclosure of such information may be made to which the Company consents in writing.

Without the prior consent of the Company, you will direct your officers, directors, general partners, employees, counsel, investment bankers and other affiliates and/or representatives not to disclose to any person either the fact that discussions or negotiations are taking place concerning a possible transaction or any of the terms, conditions or other facts with respect to any such possible transaction, including the status thereof. The term “person” as used in this letter shall be broadly interpreted to include, without limitation, any corporation, company, group, partnership or individual.

If you or any of your affiliates or agents are requested or required (by oral questions, interrogatories, requests for information or documents, subpoena or similar process) to disclose any Confidential Material, it is agreed that....

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....

EXECUTIVE SUMMARY

SAMPLE SHORT-FORM BUSINESS PLAN

900 Remington Road

Philadelphia, PA

Phone: (215) 976-4000 Fax: (215) 976-4001
E-mail: mpeterson@aol.com WebSite: www.ppi.com

Picture Perfect, Inc. (the "Company") was founded by an experienced management team to develop and market new types of consumer products in the picture frame, photography products and photo album markets. The Company has applied for patents on several of its new innovative products.

The picture frame, photography products and photo album markets have annual sales in excess of $15 billion, expected to grow to $20 billion by 2001. The picture frame industry is dominated by three large players (Burnes, Fetco and Carr) and smaller niche players (Malden, Advent). Photo albums are made and distributed by many of the same companies. Large retail chains as well as specialty boutique stores are the primary purchasers of picture frame and photo albums.

The photography products industry consists of numerous companies large and small (Kodak, Fuji, Arrelle). The Company, however, will be focussing on photography products for general consumer orientation (as opposed to professional photographers).

The Company plans to develop and market comprehensive innovative product lines to intelligently compete in all three areas, with the goal of obtaining significant and profitable market share.

The Company was formed in August 1997 by four individuals with significant experience and contacts in the various relevant industries. Since that time, the Company has (1) designed four new picture frame products, (2) designed two new photo album products, (3) lined up several distributors, (4) made product demonstrations to Macy’s, Nordstroms, Wal-Mart, JC Penney, and other major retailers, and (5) implemented manufacturing contracts.

The Company’s products are intended to be innovative and interesting. The Company has designed a new series of frames, the DateFrame™ picture frames, which incorporate a feature that displays the date when the picture was taken on a built-in mechanism in the frame. The Company has a patent pending on this product line. The Company has also designed picture frames and photo albums, samples of which are available on request. The Company plans to develop a broad based product line to penetrate the market.

The Company intends to use a combination of employees and distributors for marketing its products. The Company founders have extensive relationships with major prospective chain stores and distributors, which should facilitate marketing. The Company has also been developing distinctive packaging and logos to achieve brand recognition for its products.

The Company projects that sales and profits will be as follows, all as further detailed in more extensive projections and underlying assumptions available upon request:

1. Contracts

¨ yes ¨ no Are all of the company’s important agreements in writing?

¨ yes ¨ no Are there good form contracts in place?

¨ yes ¨ no Do the contracts provide for disputes to be resolved in courts in the city where the company’s principal office is located?

¨ yes ¨ no Is there an attorney’s fees clause in each contract?

¨ yes ¨ no Does the contract say that amendments to the contract may only be made in writing?

¨ yes ¨ no Are there provisions in the company’s standard form contracts regarding limiting the company’s liability?

¨ yes ¨ no Is the company complying with the terms of its contracts and leases?

2. Corporate Minute Book

¨ yes ¨ no Do the Articles of Incorporation provide for sufficient authorized number of shares?

¨ yes ¨ no Is a copy of the Articles in the Minute Book?

¨ yes ¨ no Is a copy of the Bylaws in the Minute Book?

¨ yes ¨ no Are there minutes for all meetings of shareholders?

¨ yes ¨ no ....

Stock Ledger
and
Capitalization Summary
of
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