Standard FBO

Standard FBO

Fixed Buyout (FBO) Certificates

The ______________ Corporation -- Incorporated in the State of _______Certificate Number: _____

This fixed buyout certificate is issued by the _____________ Corporation to ____________ (the holder). This certificate can only be transferred on the books of the Corporation in person or by attorney, upon surrender of this certificate. Said certificate is issued for valid consideration, paid in full and fully assessed, for a face value of Five thousand dollars -- ($5,000.00) and is subject to the conditions set out herein. This certificate is non-assessable. All rights and interest in said certificate are personal to the person named, the holder, and said interests may not be sold, traded, pledged, assigned or transferred except as set out herein. At any time, without notice, all or any portion of this certificate may be purchased by the Corporation, at its sole option, at the buyout rate of --Twenty-- times the face value stated hereon (20 to one). This fixed buyout certificate shall be retired at the aforesaid buyout rate by the Corporation when the triggering as set out below has occurred. Said buyout shall occur over a period of three (3) years. The repurchase price of this certificate is therefore $100,000.00. Said buyout triggers are as follows: the cumulative sale, by the corporation, of:

50,000 or more units, model number XXX, and/or 100,000 or more units, model number YYY

Wherefore, on behalf of said corporation, the duly authorized officer of this Corporation has hereunto subscribed his name, this ____ day of ____, 1999

By: ______________, president

The _____________ Corporation

Use of This Form -- Comments

1. This FBO certificate (issued without a note) can be issued to employees, contractors, consultants, suppliers and others as may be appropriate. It is fully vested and has value only if and when any of the trigger levels is reached. Since it is not vested until triggered, it is a contingent debt of the corporation. Thus it should not be viewed as compensation, at least not until it vests. Arguably it is a form of delayed payment and the tax consequences for this type of disbursal are not clear.

2. All FBO certificates should be considered to be general debt obligations of the corporation, unless tax rulings indicate otherwise for certain situations.

Baby Safari.US -- Akilo.Com -- The Snow Water Corporation

2 Hayfields Road, Portola Valley, Ca 94028 -- (800) 872-5244