Subsidiary Company Agreement

SUBSIDIARY COMPANY AGREEMENT

This Subsidiary Company Agreement (the Agreement) is made effective as of (Effective Date), by and between Parent Company Name: , an entity organized as Entity Type: Corporation Limited Liability Company Other with principal place of business at ; and Subsidiary Company Name: , an entity organized as Entity Type: Corporation Limited Liability Company Other with principal place of business at .

RECITALS

WHEREAS, Parent Company is the owner of shares or membership interests representing of the issued and outstanding equity of Subsidiary; and

WHEREAS, the parties desire to set forth certain agreements regarding the governance, capital structure, transfer restrictions, financial reporting, tax treatment, and other matters relating to Subsidiary; and

WHEREAS, the parties intend that Subsidiary operate for the business purpose described as:

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

1. DEFINITIONS

1.1 Defined Terms. Unless otherwise defined, capitalized terms used in this Agreement shall have the following meanings:

"Affiliate" means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person. "Business Day" means any day other than a Saturday, Sunday or a day on which banking institutions are authorized or required by Law to close in the state set forth in Section 15 (Governing Law). Other capitalized terms shall have the meanings ascribed to them where used.

2. FORMATION; PURPOSE; PRINCIPAL PLACE OF BUSINESS

2.1 Formation. Subsidiary was formed and shall continue to exist under the laws of and shall maintain its principal place of business at .

2.2 Purpose. The purpose of Subsidiary is to engage in the business described in Section 2.2 and any activities reasonably related thereto, subject to the restrictions in this Agreement.

3. CAPITALIZATION; CONTRIBUTIONS

3.1 Initial Capital. Parent shall contribute an initial capital amount of (Initial Contribution) to Subsidiary in exchange for the ownership interests set forth in the Recitals. The parties acknowledge that capital accounts and equity records shall be maintained in accordance with generally accepted accounting principles consistently applied.

3.2 Additional Capital. Neither party shall be required to make additional capital contributions to Subsidiary except as agreed in writing. Any voluntary or mandatory additional contributions shall be evidenced by a written agreement executed by the contributing party and accepted by Subsidiary.

4. MANAGEMENT AND GOVERNANCE

4.1 Board Composition. The board of directors of Subsidiary shall consist of directors. Parent shall have the right to appoint directors, and other directors, if any, shall be appointed as provided in the bylaws or other organizational documents.

4.2 Governance Standards. Subsidiary shall at all times act in accordance with its organizational documents and applicable Law. Major corporate actions, including but not limited to mergers, liquidation, sale of all or substantially all assets, amendment to organizational documents, incurrence of indebtedness exceeding , or issuance of new equity, shall require the approval of the board and, where specified in this Agreement or organizational documents, the affirmative vote of the Parent-appointed directors.

5. BOARD OF DIRECTORS; MEETINGS

5.1 Meetings and Quorum. Regular and special meetings of the board shall be conducted in accordance with the bylaws. A quorum for board meetings shall be a majority of the sitting directors unless otherwise required by the organizational documents. Directors may participate by means of conference call or other electronic means.

5.2 Voting. Except as otherwise provided in this Agreement or applicable Law, action of the board shall be taken by a majority vote of the directors present at a meeting at which a quorum is present. For matters specified in Section 4.2 as Major Transactions, the vote of at least of the board shall be required.

6. OFFICERS

6.1 Appointment. The board shall appoint officers of Subsidiary responsible for day-to-day operations. Officers shall serve at the pleasure of the board and shall perform the duties delegated by the board and as set forth in the bylaws.

7. RESTRICTIONS ON TRANSFERS

7.1 Transfer Restrictions. Except as expressly permitted in this Agreement or the organizational documents, no equity interest in Subsidiary may be sold, assigned, pledged or otherwise transferred without the prior written consent of Parent. Any purported Transfer in violation of this Section shall be null and void.

7.2 Right of First Refusal. In the event of a proposed Transfer by a holder of equity interests, Parent shall have a right of first refusal to purchase such interests on the same terms and conditions offered by a third party, subject to the procedures set forth in the organizational documents.

8. FINANCIAL REPORTING; BANK ACCOUNTS; AUDIT

8.1 Books and Records. Subsidiary shall keep complete and accurate books, records, and accounts of its operations, in accordance with generally accepted accounting principles consistently applied.

8.2 Reports. Subsidiary shall deliver to Parent unaudited monthly financial statements within days after month-end and audited annual financial statements within days after fiscal year-end.

8.3 Audit. Subsidiary shall cause its accounts to be audited by an independent registered public accounting firm at least , or more frequently if reasonably required by Parent.

9. TAX MATTERS

9.1 Tax Returns. Subsidiary shall prepare and file all tax returns required by applicable Law and shall provide Parent copies of all federal, state and local tax returns filed for Subsidiary within days of filing.

9.2 Tax Elections. Any election that could have a material adverse effect on Parent or change Parent's tax attributes shall require Parent's prior written consent.

10. INDEMNIFICATION; INSURANCE

10.1 Indemnification. Subsidiary shall indemnify and hold harmless Parent and its directors, officers and employees to the fullest extent permitted by applicable Law against liabilities, costs and expenses (including reasonable attorneys' fees) arising out of acts or omissions of Subsidiary, its directors or officers in their capacities on behalf of Subsidiary.

10.2 Insurance. Subsidiary shall maintain insurance coverage customary for businesses of similar size and nature, including directors' and officers' liability insurance with limits reasonably satisfactory to Parent.

11. CONFIDENTIALITY

11.1 Confidential Information. Each party shall keep confidential all non-public information received from the other party in connection with the business and operations of Subsidiary and shall not disclose such information except as required by Law or with the disclosing party's prior written consent.

11.2 Survival. The obligations contained in this Section shall survive termination of this Agreement for a period of years.

12. TERMINATION

12.1 Termination Events. This Agreement shall terminate upon the earliest of (a) written agreement of the parties, (b) dissolution of Subsidiary, or (c) such other events as agreed in writing by the parties. Termination shall not relieve either party of liability for breaches occurring prior to termination.

13. NOTICES

All notices, requests, consents and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, by certified mail (return receipt requested), or by nationally recognized overnight courier to the addresses set forth above or to such other address as a party may designate by notice to the other in accordance with this Section.

14. AMENDMENTS; WAIVER

14.1 Amendments. This Agreement may be amended only by a written instrument executed by both parties. No course of conduct by any party shall constitute an amendment or waiver of any provision of this Agreement.

14.2 Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by the party against whom enforcement is sought. The failure of any party to insist upon strict performance of any covenant or obligation in this Agreement shall not constitute a waiver of such party's right to demand strict compliance in the future.

15. GOVERNING LAW; VENUE

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. The parties irrevocably submit to the exclusive jurisdiction of the state and federal courts located in that State for any action arising out of or relating to this Agreement.

16. ENTIRE AGREEMENT

This Agreement, together with any exhibits or schedules hereto, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings and negotiations, whether oral or written.

17. SEVERABILITY

If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under applicable Law, such invalidity, illegality or unenforceability shall not affect any other provision hereof, and the parties shall negotiate in good faith to replace the invalid, illegal or unenforceable provision with a valid, legal and enforceable provision that achieves, to the greatest extent possible, the original intent of the parties.

18. COUNTERPARTS; ELECTRONIC SIGNATURES

This Agreement may be executed in any number of counterparts, each of which when executed and delivered shall be an original and all of which together shall constitute one and the same instrument. Execution and delivery by electronic means shall be valid and binding for all purposes.

ADDITIONAL PROVISIONS

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