Business Entity Agreement

BUSINESS ENTITY AGREEMENT

This Business Entity Agreement (the "Agreement") is made and entered into as of by and between Party A Name: , organized as under the laws of ("Party A"), and Party B Name: , organized as under the laws of ("Party B").

RECITALS

WHEREAS, the Parties desire to form, own and operate a business enterprise under the terms set forth in this Agreement for the purpose of conducting lawful business activities related to the business described below; and

WHEREAS, the Parties intend to set forth their respective capital contributions, ownership interests, management authority, and other rights and obligations with respect to the business entity to be formed or governed by this Agreement.

WHEREAS, the Parties have negotiated the terms of their relationship and desire that such terms be reduced to writing in this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. NAME AND FORMATION

1.1 Name. The business shall be conducted under the name: (the "Entity").

1.2 Formation. The Parties shall cause the Entity to be formed or governed in accordance with the laws of the state of and shall take all actions necessary to effect formation or registration, including filing of organizational documents and the appointment of a registered agent.

2. PURPOSE

2.1 Business Purpose. The purpose of the Entity shall be:

3. CAPITAL CONTRIBUTIONS; OWNERSHIP

3.1 Initial Contributions. Party A shall contribute the sum of $ and Party B shall contribute the sum of $ as initial capital to the Entity. Each contribution shall be made in lawful money, property, or a combination as described in the records of the Entity.

3.2 Ownership Percentage. The Parties' ownership interests in the Entity shall be as follows: Party A and Party B . Ownership percentages shall be adjusted only as set forth in this Agreement.

3.3 Additional Contributions. No Party shall be required to make additional capital contributions except pursuant to a written unanimous consent of the Parties or as otherwise provided by this Agreement.

4. MANAGEMENT AND VOTING

4.1 Management. The Entity shall be managed by . The powers and duties of the manager(s) and members shall be those set forth in this Agreement and applicable law.

4.2 Voting. Except as otherwise expressly provided herein, decisions requiring Party approval shall be made by a vote of Parties holding a majority in interest of the ownership percentages. Major decisions, including amendment of organizational documents, admission of a new owner, or sale of substantially all assets, shall require the unanimous written consent of the Parties.

5. DISTRIBUTIONS

5.1 Net Profits and Losses. Net profits and losses of the Entity shall be allocated to the Parties in proportion to their respective ownership percentages, unless otherwise agreed in writing.

5.2 Timing of Distributions. Distributions of available cash, if any, shall be made at such times and in such amounts as determined by the manager(s), provided that distributions shall be made pro rata according to ownership percentages after provision for reserves reasonably required for operations, taxes, and liabilities.

6. BOOKS, RECORDS AND BANK ACCOUNTS

6.1 Books and Records. The Entity shall maintain complete and accurate books, records and accounts in conformity with generally accepted accounting principles consistently applied. Each Party shall have the right to inspect and copy such books and records during regular business hours upon reasonable prior notice.

6.2 Fiscal Year. The fiscal year of the Entity shall end on .

7. TRANSFER RESTRICTIONS; RIGHT OF FIRST REFUSAL

7.1 Restriction on Transfer. No Party shall transfer, sell, encumber or otherwise dispose of any interest in the Entity except in accordance with the terms of this Agreement. Any purported transfer in violation of this Section shall be null and void and of no force or effect.

7.2 Right of First Refusal. Before any Party may sell or transfer its interest to a third party, the transferring Party shall first offer such interest to the non-transferring Party on the same terms and conditions. The non-transferring Party shall have days to accept or reject the offer.

8. TAX ELECTIONS; TAX MATTERS

8.1 Tax Classification. The Parties shall determine the federal and state tax classification of the Entity and agree to execute any elections or returns necessary to effectuate that classification. All tax elections shall be made by mutual written consent.

8.2 Tax Matters Partner. The Parties hereby designate to act as the tax matters partner for purposes of tax administration unless otherwise agreed in writing.

9. REPRESENTATIONS AND WARRANTIES

9.1 Each Party represents and warrants to the other that: (a) it is duly organized, validly existing and in good standing under the laws of its jurisdiction of formation; (b) it has full power and authority to enter into this Agreement and to perform its obligations hereunder; and (c) the execution and delivery of this Agreement and the performance of its obligations will not violate any law, regulation, contractual obligation, or order to which it is subject.

10. INDEMNIFICATION

10.1 Indemnification. Each Party shall indemnify, defend and hold harmless the other Party and the Entity from and against any and all claims, liabilities, losses, damages, costs and expenses (including reasonable attorneys' fees) arising from the indemnifying Party's breach of this Agreement, willful misconduct or gross negligence, subject to applicable law and any limitations set forth elsewhere in this Agreement.

11. CONFIDENTIALITY

11.1 Confidential Information. Each Party acknowledges that it may have access to trade secrets or proprietary information ("Confidential Information"). Each Party shall maintain the confidentiality of such information and shall not disclose it to any third party except as required by law or as necessary to perform its obligations under this Agreement.

12. DISSOLUTION AND WINDING UP

12.1 Events Causing Dissolution. The Entity shall be dissolved upon the occurrence of any event specified in the governing organizational documents, the written unanimous agreement of the Parties, or other events required by law. Upon dissolution, the Entity shall be wound up and its assets distributed in accordance with applicable law and this Agreement.

13. NOTICES

13.1 Method. All notices or other communications required or permitted hereunder shall be in writing and shall be delivered by hand, nationally recognized overnight courier, certified mail (return receipt requested), or such other method as the Parties may agree in writing.

14. AMENDMENTS; WAIVER; COUNTERPARTS

14.1 Amendments. This Agreement may be amended only by a written instrument signed by all Parties.

14.2 Waiver. The failure of any Party to enforce any provision of this Agreement shall not constitute a waiver of such provision or of the right to enforce the same in the future, unless such waiver is in writing and signed by the Party granting it.

14.3 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument.

15. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

15.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the state of , without regard to principles of conflicts of law.

15.2 Entire Agreement. This Agreement (together with all exhibits, schedules, and documents referred to herein) constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, whether written or oral.

15.3 Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby, and the Parties shall endeavor in good faith to replace the invalid provision with a valid provision that comes as close as possible to the economic effect of the invalid provision.

16. MISCELLANEOUS

16.1 Remedies. Except as otherwise expressly provided herein, the Parties shall be entitled to seek injunctive relief and any other remedies available at law or in equity for any breach or threatened breach of this Agreement.

16.2 Further Assurances. Each Party shall execute such further documents and take such further actions as may be necessary or desirable to effectuate the purposes of this Agreement.

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