CLOSE CORPORATION SHAREHOLDERS MANAGEMENT AGREEMENT OF __________

ONE SHAREHOLDER

The provisions are suggestive only; and counsel may wish to delete, add or substitute alternative provisions according to the parties actual agreement.

The form of M inutes, Consents, Bylaws, Agreem ents and other form s and docum ents enclosed with this order are offered as a sam ple only of standard provisions contained in such form s and docum ents. They do not purport to address the specific requirem ents of individual transactions or situations. If utilized incorrectly, significant negative tax and business consequences could result. Persons outside the legal profession w ho intend to utilize any such form s and docum ents m ust seek com petent legal counsel prior to their use or adaptation thereof for his or her particular requirem ents.

2005 - 2008 ALL RIGH TS RESERVED

CLOSE CORPORATION SHAREHOLDERS MANAGEMENT AGREEMENT OF

__________
A CALIFORNIA CORPORATION

THIS AGREEMENT is entered into and effective on __________ , by and between __________ , hereinafter referred to as Shareholder, and __________ , a California corporation, hereinafter referred to as Corporation, and is made with reference to the following facts which are incorporated herein by this reference: A. B. Corporation is a close corporation, as defined in Section 158 of the California Corporations Code. Shareholder is the holder of __________ shares of the outstanding capital stock of Corporation, which constitutes one hundred percent of its issued and outstanding shares. The parties desire to enter into a Shareholders Agreement, as defined in Section 186 of the California Corporations Code, for the purpose of establishing responsibility for the management of Corporations business and fixing such other matters respecting the conduct of its affairs as are permitted a close corporation under Section 300(b) of that Code.

C.

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows: 1. Officers and Directors of Corporation. Shareholder shall be sole Director and President of Corporation and, at his election, shall occupy one or more, or all, of the remaining offices of Corporation. Notwithstanding the provisions of Corporations s to the contrary, annual and regular meetings of the shareholder and Board of Directors, including the elections of directors and the appointment of corporate officers, may be waived during the continuance of this Agreement. However, Shareholder shall ensure Corporations compliance with record keeping requirements of Corporations Code Section 1500 and the annual report requirement Section 1501(a) of that Code. Shareholders Compensation. Shareholder shall receive compensation and other employment benefits, and shall perform his employment responsibilities, in accordance with the terms and conditions of an employment agreement to be entered into between Corporation and Shareholder in substantially the form of the Employment Agreement attached hereto as Exhibit A. 1

2.

3.

Management of Corporations Business and Affairs. Notwithstanding the provisions of Corporations s to the contrary, and except as prohibited by provisions of the California Corporations Code, the business and affairs of Corporation shall be managed and all corporate powers shall be exercised by or under the direction of Shareholder. Termination. This Agreement shall continue until the first to occur of the following: (a) The date on which Corporation ceases to be a close corporation as defined in Section 158 of the California Corporations Code; (b) The death or permanent physical or mental disability of Shareholder; or (c) The agreement of the parties in writing to such termination. Share Certificate Legend. Each certificate representing shares of Corporation shall be imprinted with the following legend: This corporation is a close corporation. The number of holders of record of its shares of all classes cannot exceed __________ ( a number not in excess of 35). Any attempted voluntary intervivos transfer which would violate this requirement is void. Refer to the articles, s and any agreements on file with the secretary of the corporation for further restrictions.

4.

5.

6.

Filing of Shareholders Agreement. A copy of this Agreement, and any amendments thereto, shall be filed with the Secretary of Corporation for inspection by any prospective purchaser of shares of Corporation. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. Successors and Assigns. This Agreement shall inure to the benefit and be binding on the successors and assigns of the parties hereto.

7.

8.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement in the date first above written. SHAREHOLDER:

_____________________________

__________
CORPORATION:

By:

_______________________

__________

By:

_______________________

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