Right of First Refusal Agreement (California corporation)

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 California 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. "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.

3. Right of First Refusal.

1. Each time a Holder proposes to Transfer (or is required by operation of law or other involuntary transfer) any or all of the Shares standing in such Holder''s name or owned by him or her during the term of this Agreement, such Holder shall first offer such Shares to the Company in accordance with the following provisions:
   
   
   1. Such Holder shall deliver a written notice (a Notice) to the Company stating (A) such Holder''s bona fide intention to Transfer such Shares, (B) the name and the address of the proposed transferee, (C) the number of Shares to be transferred, and (D) the purchase price per Share and terms of payment for which the Holder proposes to Transfer such Shares.
   2. Within 90 days after receipt of the Notice, the Company or its designee shall have the first right to purchase or obtain such Shares, upon the price and terms of payment designated in the Notice. If the Notice provides for the payment of non-cash consideration, the Company at its option may pay the consideration in cash equal to the Company''s good faith estimate of the present fair market value of the non-cash consideration offered.
   3. If the Company or its designee elects not to purchase or obtain all of the Shares designated in the selling Holder''s Notice, then the Holder may Transfer the Shares referred to in the Notice to the proposed transferee, providing such Transfer (A) is completed within 30 days after the expiration of the Company''s right to purchase or obtain such Shares, (B) is made at the price and terms designated in the Notice, and (C) the proposed Transferee agrees to be bound by the terms and provisions of this Agreement and to become a party to this Agreement immediately upon receipt of such Shares. If such Shares are not so transferred, the selling Holder must give notice in accordance with this paragraph prior to any other or subsequent Transfer of such Shares.
      
2. Notwithstanding Section 3(a), a Holder may Transfer Shares: (i) to a member of the Holder''s Immediate Family or to a trust established for the benefit of a member or members of the Holder''s Immediate Family, (ii) to an affiliate or equity holder of the Holder, (iii) to a person who is a constituent partner of the Holder on the date hereof, or (iv) to the estate of any of the foregoing by gift, will or intestate succession; provided that the Holder or his representative notifies the Company of such Transfer not less than 10 nor more than 90 days prior to the Transfer and that the proposed transferee agrees to be bound by the terms and provisions of this Agreement and to become a party to this Agreement immediately upon the receipt of such Shares.

4. No Transfer to Competitors. A Holder may not Transfer any Shares to a competitor of the Company, or to any shareholder, partner or other beneficial holder of an equity ownership interest in a competitor, other than pursuant to a merger, combination, or other transaction approved by the Board of Directors.

5.  California General Corporation Law. Notwithstanding any provisions to the contrary contained in this Agreement, the Company''s obligations to pay or complete payment for any Shares to be purchased by it under this Agreement is subject to its being legally permitted to do so under the tests contained in Sections 500 and 501 of the California General Corporation Law or any successor statute applicable thereto.

6.  Legend on Stock Certificates. Each certificate representing shares owned of record or beneficially by a party to this Agreement shall be endorsed with the following legend:

THE SHARES EVIDENCED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL AGREEMENT BETWEEN [NAME OF COMPANY] (THE COMPANY) AND THE HOLDERS THAT ARE SIGNATORIES THERETO, PROVIDING FOR, AMONG OTHER MATTERS, THE COMPANY'S RIGHT OF FIRST REFUSAL TO PURCHASE THE SECURITIES REPRESENTED BY THIS CERTIFICATE. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL BUSINESS OFFICE OF THE COMPANY.

Under no circumstances shall any Transfer of any Shares subject hereto be valid until the proposed transferee thereof shall have executed and become a party to this Agreement and thereby shall have become subject to....