Management Rights Letter

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									This Management Rights Letter sets forth the management rights granted by a company
to investors in the company’s retirement pension fund. This letter can also be used to
grant management rights to other non-pension fund investors who will not have enough
shares to be voted onto the board of directors. Pursuant to the investor’s purchase of
the company’s stock, the investor is entitled to certain contractual management rights as
listed in this agreement, including consulting and advising the company on business
issues, receiving copies of all material provided to the company’s board, and a right to
inspect the company’s books, records and facilities. The agreement has a
confidentiality clause whereby the investor agrees not to disclose the company’s
confidential information.
                         Management Rights Letter

__________________ [Instruction: Insert Company Name]
__________________ [Instruction: Insert Address 1]
__________________ [Instruction: Insert Address 2]
__________________ [Instruction: Insert Date]

__________________ [Instruction: Insert Investor Name]
__________________ [Instruction: Insert Address 1]
__________________ [Instruction: Insert Address 2]

       Re:     Management Rights

Dear __________________ [Instruction: Insert Investor Name]

         This letter will confirm our agreement that pursuant to and effective as of your purchase
of _______________ (_____) [Instruction: Insert Number of Shares] shares of Series ___
[[Instruction: Insert Series of Stock purchased] preferred stock (the “Preferred Stock”) of
_______________________ [Instruction: Insert Company Name] (the “Company”),
__________________ [Instruction: Insert Investor Name] ( the “Investor”), shall be entitled
to the following contractual management rights, in addition to any rights provided to all investors
in connection with the sale of the Preferred Stock:

1. If Investor is not represented on the Company’s Board of Directors (the “Board”), Investor
shall be entitled to consult with and advise management of the Company on significant business
issues, including, but not limited to, management’s proposed annual operating plans, and
management will meet with Investor regularly during each year at for such consultation and
advice and to review progress in achieving said plans.

2. If Investor is not represented on the Board, Company shall furnish Investor with copies of all
notices, minutes, consents and other material that the Company provides to the Board, provided
that Company has the right to exclude the Investor from accessing any material or meeting or
portion thereof if the Company believes, upon advice of counsel, that such exclusion is
reasonably necessary to preserve the attorney-client privilege, to protect highly confidential
proprietary information, or for other similar reasons. Investor shall also have the opportunity to
address the Board, at a scheduled Board meeting, with respect to Investor’s concerns regarding
significant business issues facing the Company provided Investor gives reasonable notice to the

3. Investor may examine the books and records of the Company and inspect its facilities and
may request information at reasonable times and intervals in relation to the Company’s financial
conditions and operations, provided that access to highly confidential proprietary information
and facilities need not be provided.
4. Investor agrees that Investor will keep confidential and will not disclose, divulge, or use for
any purpose (other than to monitor its investment in the Company) any confidential information
obtained from the Company, unless such confidential information: (A) is known or becomes
known to the public in general (other than as a result of a breach of this paragraph by Investor);
(B) is or has been independently developed or conceived by the Investor without use of the
Company’s confidential information; or (C) is or has been made known or disclosed to the
Investor by a third party without a breach of any obligation of confidentiality such third party
may have to the Company.

    Notwithstanding the foregoing, Investor may disclose confidential information: (i) to
Investor’s attorneys, accountants, consultants, and other professionals to the extent necessary to
obtain their services in connection with monitoring its investment in the Company; (ii) to any
prospective purchaser of any registrable securities from Investor, if such prospective purchaser
agrees to be bound by the provisions of this paragraph; (iii) to any existing or prospective
affiliate, partner, member, stockholder, or wholly owned subsidiary of Investor in the ordinary
course of business, provided that Investor informs such person(s) that such information is
confidential and directs such person(s) to maintain the confidentiality of such information; or (iv)
as may otherwise be required by law, provided that the Investor promptly notifies the Company
of such disclosure and takes reasonable steps to minimize the extent of any such required

5. The rights described herein shall terminate and be of no further force or effect upon: (A) such
time as no shares of the Company’s stock are held by the Investor or Investor’s affiliates; (B) the
sale of the Company’s securities pursuant to a registration statement filed by the Company under
the Securities Act of 1933, as amended, in connection with the firm commitment underwritten
offering of its securities to the general public; or (C) the consummation of a merger or
consolidation of the Company that is effected for independent business reasons unrelated to
extinguishing such rights and for purposes other than the reincorporation of the Company in a
different state or the formation of a holding company that will be owned exclusively by the
Company’s stockholders. The confidentiality obligations referenced herein will survive any such

Very Truly Yours,


© Docstoc®, Inc. 2011 – All Rights Reserved
________________________________ [Instruction: sign]
By: ___________________________ [Instruction: Insert Name of Signatory]
Title: ___________________________ [Instruction: Insert Title of Signatory]

Accepted and Agreed:


________________________________ [Instruction: sign]
By: ___________________________ [Instruction: Insert Name of Signatory]
Title: ___________________________ [Instruction: Insert Title of Signatory

© Docstoc®, Inc. 2011 – All Rights Reserved

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