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1 JEFFREY F. RYAN (State Bar No. 129079)
LAW OFFICES OF JEFFREY F. RYAN
2
The Fitzpatrick Building
3 2000 Broadway Street
Redwood City, California 94063-1802
4 Phone: (650) 922-2341
5 Email: jeff@jeffreyryanlaw.com
6 Attorneys for Plaintiff & Petitioner FRED H. GEISLER, M.D., Ph.D.
7
IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
8 FOR THE COUNTY OF SAN MATEO
9 CIVIL DIVISION – SOUTHERN BRANCH
10 FRED H. GEISLER, M.D., Ph.D., Case No. 17CIV02888
11
Petitioner, VERIFIED PETITION FOR
12 APPOINTMENT OF PROVISIONAL
vs. DIRECTOR WITH EXHIBITS
13 (Corp. C. § 308(a))
14 RHAUSLER, INC., a California
corporation, Date: August 2, 2022
15 Time: 2:00 p.m.
16 Respondent, Dept.: 2 (VIA ZOOM)
17 Assigned for All Purposes to Honorable
Marie S. Weiner
18
19 (Memorandum of Points & Authorities
and [proposed] Order filed separately.)
20
21 FRED H. GEISLER, M.D., Ph.D. (“PETITIONER”), by his verified petition,
22 alleges as follows:
23 1. PETITIONER is an individual and is now, and at all times mentioned in this
24 petition was, a resident of Emmet County, State of Michigan.
25 2. Respondent, RHAUSLER, INC. (“RHAUSLER”), is now, and at all times
26 mentioned in this petition was, a corporation organized and existing under the laws of the
27 State of California, with its principal place of business in San Mateo County, California.
28
_______________________________________________________________________________________________
1
Verified Petition for Appointment of Provisional Director with Exhibits
Geisler v. Rhausler Case No.: 17CIV0288
1 3. PETITIONER is a member of the board of directors of RHAUSLER. A true copy
2 of RHAUSLER’S “Statement of Information,” filed 02/24/2022, listing PETITIONER as
3 the only director is appended hereto as Exhibit A, and the interested parties may access the
4 historical filings with the California Secretary of State by RHAUSLER at
5 https://bizfileonline.sos.ca.gov/search/business.
6 4. The board of directors of RHAUSLER consists of 3 directors pursuant to Article
7 III, Section 2 of the Bylaws of RHAUSLER, a true copy of which is appended hereto as
8 Exhibit B, although the aforesaid “Statement of Information” erroneously reflects that
9 while PETITIONER is the only director, there are no vacancies on the board.
10 5. On October 5, 2019, Robert J. Glynn, Jr., the secretary, former general counsel
11 and a director of RHAUSLER, died, as this Court so found by its Case Management Order
12 #20, filed in case number 17CIV02888 on October 22, 2019. A true copy of that Case
13 Management Order is appended hereto as Exhibit C.
14 6. By Order filed March 2, 2022, this Court disqualified Daniel Hardy, Esq., and the
15 Coombs & Dunlap, LLP, law firm from representing RHAUSLER, leaving the corporation
16 without counsel in this shareholders’ derivative action. The Court further ordered that
17 PETITIONER’S counsel facilitate the retention of new counsel to represent RHAUSLER
18 because, as the Court noted, under California law a corporation may not appear pro se; it
19 must be represented by a licensed attorney. A true copy of the Court’s 03/03/2022 Order
20 re: Motion for Disqualification of Counsel is appended hereto as Exhibit D.
21 7. PETITIONER, with the assistance of his counsel, retained the services of James
22 J. Der, Jr., SBN 121417, as replacement for Daniel Hardy to represent RHAUSLER in the
23 within derivative action. Mr. Der wrote to Mr. Hardy on March 30, 2022, requesting that
24 the RHAUSLER client file be sent to new counsel, Mr. Der. A true copy of that
25 03/30/2022 letter is appended hereto as Exhibit E. In that letter, new counsel for
26 RHAUSLER, Mr. Der, reiterated that a Substitution of Attorney had been served and filed
27 on March 21, 2022, and a true copy of said Substitution of Attorney is appended hereto as
28
_______________________________________________________________________________________________
2
Verified Petition for Appointment of Provisional Director with Exhibits
Geisler v. Rhausler Case No.: 17CIV0288
1 Exhibit F.
2 8. On April 5, 2022, Mr. Hardy responded by email to Mr. Der’s 03/30/2022 letter,
3 advising new counsel that absent some more authoritative imprimatur on the substitution
4 of attorneys, the disqualified Mr. Hardy felt constrained by the Rules of Professional
5 Conduct to withhold the RHAUSLER client file from Mr. Der. A true copy of Mr. Hardy’s
6 04/05/2022 email to Mr. Der is appended hereto as Exhibit G.
7 9. During the conflicted representation of RHAUSLER from which the Court
8 disqualified him on March 2, 2022, attorney Hardy and his firm, Coombs & Dunlap, LLP,
9 were being paid $5,000 per month by RHAUSLER as and for attorney fees on account. In
10 all the papers filed in support of, and opposition to, the motion to disqualify Hardy and the
11 Coombs & Dunlap firm, no party to this action, nor any person or entity that was the
12 subject of the disqualification motion, ever disputed that said monthly payments were
13 being made.
14 10. On June 2, 2022, PETITIONER transmitted by email to defendant JOHNSTON,
15 who is listed on the aforesaid “Statement of Information” (Exh. A) as holding all
16 RHAUSLER corporate offices, but who is also erroneously omitted as a director of
17 RHAUSLER, a document entitled “RHAUSLER, INC. DIRECTORS’ ACTION BY
18 UNANIMOUS WRITTEN CONSENT,” which PETITIONER asked JOHNSTON to sign
19 and return. As PETITIONER explained in the transmittal email, said UNANIMOUS
20 WRITTEN CONSENT would enable new counsel Der to obtain the RHAUSLER client
21 file from disqualified counsel Hardy, and enable RHAUSLER to pay new counsel Der
22 attorney fees at the same level ($5,000 per month) as Hardy and his law firm were being
23 paid prior to the disqualification order of March 2, 2022. A true copy of PETITIONER’S
24 06/02/2022 email to JOHNSTON is appended hereto as Exhibit H, and a true copy of the
25 aforesaid UNANIMOUS CONSENT that was attached to the 06/02/2022 email is at
26 Exhibit I. Mr. JOHNSTON has failed, refused or neglected to execute and return said
27 UNANIMOUS CONSENT to PETITIONER.
28
_______________________________________________________________________________________________
3
Verified Petition for Appointment of Provisional Director with Exhibits
Geisler v. Rhausler Case No.: 17CIV0288
1 6. Since October 5, 2019, the date of Mr. Glynn’s demise, the directors
2 of RHAUSLER have been equally divided and cannot agree as to the most elemental
3 aspects of the corporate governance of RHAUSLER, including such routine matters as the
4 retention of legal counsel, payment of legal counsel’s fees, and the direction to disqualified
5 counsel Hardy and the Coombs law firm to turn the RHAUSLER client file over to new
6 counsel. Indeed, neither PETITIONER nor any of the other shareholders of RHAUSLER
7 have been provided with an official, audited inventory of RHAUSLER’S physical assets,
8 including product inventory, since 2018, when said inventory was reported to be
9 $4,000,000, some of which may have already been used to pay Hardy and the Coombs law
10 firm.
11 7. PETITIONER is informed and believes, and on the basis of such information and
12 belief alleges, that as a result of the equal division of the directors as set forth above, new
13 counsel Der will not be able effectively represent, or even continue to represent
14 RHAUSLER in the aforesaid derivative action unless there is some controlling authority
15 permitting a Court to appoint counsel to serve without recompense.
16 8. As the Court is aware, defendant JOHNSTON is in Chapter 7 bankruptcy
17 proceedings in the District of Nevada; his roughly 41% ownership interest in
18 RHAUSLER’S stock has thus devolved upon the Chapter 7 trustee, who by his counsel,
19 Jason Imes, Esq., has shown indifference to PETITIONER’S request that he join with
20 PETITIONER and the other Plaintiff-shareholders to form a greater-than-50% ownership
21 majority to accomplish by a vote of shareholders that which is now being requested of the
22 Court, namely the appointment of an independent third corporate director to break the
23 aforementioned stalemate between PETITIONER and JOHNSTON.
24 9. David Morris, M.D., a board-certified neurological surgeon familiar with
25 RHAUSLER and its spinal implant devices; he is also a former shareholder of
26 RHAUSLER, having sold his stock in a private transaction in November 2019. He and is
27 willing to act as a provisional director. Dr. Morris, who practices spinal surgery at the
28
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4
Verified Petition for Appointment of Provisional Director with Exhibits
Geisler v. Rhausler Case No.: 17CIV0288
1 Center for Neurological Surgery at Petoskey, Michigan, is an impartial person, who is
2 neither a shareholder nor a creditor of RHAUSLER and is not related by consanguinity or
3 affinity within the third degree according to the common law to any of the other directors
4 of the corporation or to any judge of this court.
5 WHEREFORE, petitioner requests an order appointing a provisional director to
6 serve until removed by further order of the Court or by approval of the outstanding shares
7 as provided in Corp. Code § 308.
8
9 Dated: June 14, 2022 By:_______________________________
JEFFREY F. RYAN
10 Counsel for Petitioner
Fred H. Geisler, M.D., Ph.D.
11
12
13 VERIFICATION
14 I, FRED H. GEISLER, am one of the plaintiffs in the above-entitled action, and the
15 Petitioner in the within application for appointment of provisional director. I have read the
16 foregoing Petition and know its contents. The same is true of my own knowledge, except
17 as to those matters which are alleged on information and belief, and as to those matters, I
18 believe them to be true.
19 I declare under penalty of perjury under the laws of the State of California that the
20 foregoing is true and correct. Executed this 13th day of June, 2022.
21
22 _____________________________________________
23 FRED H. GEISLER
24
25
26
27
28
_______________________________________________________________________________________________
5
Verified Petition for Appointment of Provisional Director with Exhibits
Geisler v. Rhausler Case No.: 17CIV0288
1 PROOF OF E-SERVICE
2 I, the undersigned, declare that I am over the age of 18 years and not a party to this
3 action. My business address is 2000 Broadway Street, Redwood City, CA 94063.
4 Pursuant to two written JOINT stipulations dated February 8, 2018 and October 15,
5 2018 by and among the following parties, and by Case Management Order #8 dated
6 November 20, 2018, I caused to be served on set date set forth below, by means of electronic
7
mail, the attached document(s) to the Person(s) at the email address set forth below their
8
respective names:
9
DOCUMENTS SERVED:
10
VERIFIED PETITION FOR APPOINTMENT OF PROVISIONAL DIRECTOR WITH
11 EXHIBITS
12
MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF VERIFIED
13 PETITION FOR APPOINTMENT OF PROVISIONAL DIRECTOR
14 [proposed] ORDER ON VERIFIED PETITION FOR APPOINTMENT OF
15
PROVISIONAL DIRECTOR
16 PERSONS SERVED:
17 David Dell, Esq. Terry J. Johnston
Daniel Hardy, Esq. 7551 Saguaro Cactus Avenue
18 Coombs & Dunlap, LLP Las Vegas, NV 89178
1211 Division Street Terry.j.johnston7551@gmail.com
19
Napa, CA 94559 Defendant/Cross-Complainant
20 DDell@coombslaw.com
DHardy@coombslaw.com
21 Attorney for Rhausler, Inc.
22 Judge’s Copy – Department 2
San Mateo Superior Court
23
400 County Center
24 Redwood City, CA 94063
complexcivil@sanmateocourt.org
25
I declare under penalty of perjury under the laws of the State of California that the
26
foregoing is true and correct. Executed in Redwood City, California, on June 16, 2022.
27
28
________________________
Judy Lucero
PROOF OF E-SERVICE BY JOINT STIPULATION
SAN MATEO COUNTY SUPERIOR COURT CASE NO. 17CIV02888
COMPLEX LITIGATION – ASSIGNED TO DEPT. 2 FOR ALL PURPOSES
EXHIBIT “A”
California Secretary of State
Electronic Filing
Corporation - Statement of Information
Entity Name: RHAUSLER INC.
Entity (File) Number: C3074956
File Date: 02/24/2022
Entity Type:
Jurisdiction: CALIFORNIA
H267152
Detailed Filing Information
Entity Name: RHAUSLER INC.
Business Addresses:
Street Address of Principal
Office in California: 299 Old County Road #8
San Carlos, California 94070
United States of America
Mailing Address: 299 Old County Road #8
San Carlos, California 94070
United States of America
Street Address of Principal
Executive Office: 299 Old County Road #8
San Carlos, California 94070
H267152
United States of America
Officers:
Chief Executive Officer: Terry Johnston
7551 Saguaro Cactus Avenue
Las Vegas , Nevada 89178
United States of America
b. Secretary: Terry Johnston
7551 Saguaro Cactus Avenue
Las Vegas , Nevada 89178
United States of America
Use bizfile.sos.ca.gov for online filings, searches, business records, and resources.
California Secretary of State
Electronic Filing
Terry Johnson
7551 Saguaro Cactus Avenue
Las Vegas , Nevada 89178
United States of America
Director: Fred Geisler
401 N Wabash, Unit 62F
Chicago, Illinois 60611
United States of America
Number of Vacancies on the Board of
Directors: 0
Service of Process: Terry Johnston
299 Old County Road, #8
San Carlos, California 94070
United States of America
Type of Business: Medical Wholesale
No Officer or Director of this Corporation has an outstanding final judgment issued by the Division of
Labor Standards Enforcement or a court of law, for which no appeal therefrom is pending, for the
violation of any wage order or provision of the Labor Code.
Electronic Signature: Terry Johnston
H267152
Use bizfile.sos.ca.gov for online filings, searches, business records, and resources.
EXHIBIT “B”
BYLAWS
OF
RHAUSLER INC.
A California Corporation
ARTICLE I
OFFICES
Section 1. PRINCIPAL EXECUTIVE OR BUSINESS OFFICES. The board of directors
shall fix the location of the principal executive office of the corporation at any place within or
outside the State of California. If the principal executive office is located outside California and
the corporation has one or more business offices in California, the board shall fix and designate a
principal business office in California.
Section 2. OTHER OFFICES. Branch or subordinate offices may be established at any time
and at any place by the board of directors or by the President and CEO.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held at any place within
or outside the State of California designated by the board of directors. In the absence of a
designation by the board, shareholders' meetings shall be held at the corporation's principal
executive office.
Section 2. ANNUAL MEETING. The annual meeting of shareholders shall be held each year
on Tuesday in the first week of March at 10:00 AM or if this day is a holiday, then the meeting
will be held on the next succeeding business day at the same time.
The date so designated shall be within three months after the end of the corporation's fiscal year,
and within fifteen months after the last annual meeting.
At each annual meeting, directors shall be elected and any other proper business within the power
of the shareholders may be transacted.
Section 3. SPECIAL MEETING. A special meeting of the shareholders may be called at any
time by the board of directors, by the chairperson of the board, by the president or CEO, or by
one or more shareholders holding shares that in the aggregate are entitled to cast ten percent or
more of the votes at that meeting.
If a special meeting is called by anyone other than the board of directors, the person or persons
calling the meeting shall make a request in writing, delivered personally or sent by registered
mail or by telegraphic or other facsimile transmission, to the chairperson of the board or the
president, vice president, or secretary, specifying the time and date of the meeting (which is not
less than 35 nor more than 60 days after receipt of the request) and the general nature ofthe
business proposed to be transacted. Within 20 days after receipt, the officer receiving the request
shall cause notice to be given to the shareholders entitled to vote, stating that a meeting will be
held at the time requested by the person(s) calling the meeting, and stating the general nature of
the business proposed to be transacted. If notice is not given within 20 days after receipt of the
request, the person or persons requesting the meeting may give the notice. Nothing in this
paragraph shall be construed as limiting, fixing, or affecting the time when a meeting of
shareholders called by action of the board may be held.
Section 4. NOTICE OF SHAREHOLDERS' MEETINGS. All notices of meetings of
shareholders shall be sent or otherwise given not fewer than 10 nor more than 60 days before the
date of the meeting to shareholders entitled to notice. The notice shall specify the place, date, and
hour of the meeting, and (i) in the case of a special meeting, the general nature of the business to
be transacted, or (ii) in the case of the annual meeting, those matters that the board of directors, at
the time of giving the notice, intends to present for action by the shareholders. If directors are to
be elected, the notice shall include the names of all nominees whom the board intends, at the
time of the notice, to present for election.
The notice shall also state the general nature of any proposed action to be taken at the meeting to
approve any of the following matters:
(i) A transaction in which a director has a financial interest, within the meaning of §31 0 of the
California Corporations Code;
(ii) An amendment of the articles of incorporation.
(iii) Involving reorganization, winding up, dissolution as provided for in the Corporations Code
of the State of California.
Section 5. MANNER OF GIVING NOTICE: Notice of any shareholders' meeting shall be
given either personally or by first-class mail, fax or e-mail or other written communication,
charges prepaid, addressed to the shareholder at the address appearing on the corporation's books
or given by the shareholder to the corporation for purposes of notice. Notice is deemed to have
been given at the time when delivered personally or deposited in the mall or sent by other means
of written communication.
Section 6. QUORUM. The presence in person or by proxy of the holders of a majority of the
shares entitled to vote at any meeting of the shareholders shall constitute a quorum for the
transaction of business. The shareholders present at a duly called or held meeting at which a
quorum is present may continue to do business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum, if any action taken other than
adjournment is approved by at least a majority of the shares required to constitute a quorum.
Section 7. ADJOURNED MEETING; NOTICE. Any shareholders' meeting, annual or
special, whether or not a quorum is present, may be adjourned from time to time by the vote of
the majority of the shares represented at that meeting, either in person or by proxy, but in the
absence of a quorum, no other business may be transacted at that meeting.
When any meeting of shareholders, either annual or special, is adjourned to another time or
place, notice of the adjourned meeting need not be given if the time and place are announced at
the meeting at which the adjournment is taken, unless a new record date for the adjourned
meeting is fixed, or unless the adjournment is for more than 45 days after the date set for the
original meeting, in which case the board of directors shall set a new record date. At any
adjourned meeting, the corporation may transact any business that might have been transacted at
the original meeting.
Section 8. VOTING. The shareholders entitled to vote at any meeting of shareholders shall be
determined in accordance with bylaw provisions on record date, Section 11 of this Article II,
subject to the provisions of sections 702 through 704 of the California Corporations Code
relating to voting shares held by a fiduciary, in the name of a corporation, or in joint ownership.
The shareholders' vote may be by voice vote or by ballot, provided, however, that any election
for directors must be by ballot if demanded by any shareholder before the voting has begun. On
any matter other than the election of directors, any shareholder may vote part of the shares the
shareholder is to vote in favor of the proposal and refrain from voting the remaining shares or
vote them against the proposal, but, if the shareholder fails to specify the number of shares that
the shareholder is voting affirmatively, it will be conclusively presumed that the shareholder's
approving vote is with respect to all shares that the shareholder is entitled to vote. If a quorum is
present (or if a quorum has been present earlier at the meeting but some shareholders have
withdrawn), the affirmative vote of a majority of the shares represented and voting, provided
such shares voting affirmatively also constitute a majority of the number of shares required for a
quorum, shall be the act of the shareholders unless the vote of a greater number or voting by
classes is required by law or by the articles of incorporation.
At a shareholders' meeting at which directors are to be elected, no shareholder shall be entitled to
cumulate votes by casting for any candidate a number of votes greater than the number of votes
which that shareholder normally would be entitled to cast, unless the candidates' names have
been placed in nomination before commencement of the voting and a shareholder has given
notice at the meeting, before the voting has begun, of the shareholder's intention to cumulate
votes. If any shareholder as given such a notice, then all shareholders entitled to vote may
cumulate their votes for candidates in nomination, and may give one candidate a number of votes
equal to the number of directors to be elected multiplied by the number of votes to which that
shareholder's shares are normally entitled, or distribute the shareholder's votes on the same
principle among any or all of the candidates, as the shareholder thinks fit. The candidates
receiving the highest number of votes, up to the number of directors to be elected, shall be
elected.
Section 9. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The
transactions of any meeting of shareholders, either annual or special, however called and noticed
and wherever held, shall be as valid as though they were had at a meeting duly held after regular
call and notice, if a quorum is present either in person or by proxy, and if each person entitled to
vote who was not present in person or by proxy, either before or after the meeting, signs a written
waiver of notice or a consent to holding the meeting or an approval of the minutes of the
meeting. The waiver of notice or consent need not specify either the business to be transacted or
the purpose of any annual or special meeting of the shareholders, except that, if action is taken or
proposed to be taken for approval of any of those matters specified in section 601 (f) of the
California Corporations Code, such as:
(i) A transaction in which a director has a financial interest, within the meaning of §31 0 of the
California Corporations Code;
(ii) An amendment of the articles of incorporation under §902 of that Code;
(iii) A reorganization under§ 1201 ofthat Code;
(iv) A voluntary dissolution under§ 1900 ofthat Code; or
(v) A distribution in dissolution that requires approval of the outstanding shares under §2007 of
that Code.
The waiver of notice or consent is required to state the general nature of the action or proposed
action. All waivers, consents, and approvals shall be filed with the corporate records or made a
part of the minutes of the meeting.
A shareholder's attendance at a meeting also constitutes a waiver of notice of that meeting,
unless the shareholder at the beginning of the meeting objects to the transaction of any business
on the ground that the meeting was not lawfully called or convened. In addition, attendance at a
meeting does not constitute a waiver of any right to object to consideration of matters required by
law to be included in the notice of the meeting which were not so included, if that objection is
expressly made at the meeting.
Section 10. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A
MEETING. Any action that could be taken at an annual or special meeting of shareholders may
be taken without a meeting and without prior notice, if a consent in writing, setting forth the
action so taken, is signed by the holders of outstanding shares having not less than the minimum
number of votes that would be necessary to authorize or take that action at a meeting at which all
shares entitled to vote on that action were present and voted.
Directors may be elected by written consent of the shareholders without a meeting only if the
written consents of all outstanding shares entitled to vote are obtained, except that vacancies on
the board not filled by the board may be filled by the written consent of the holders of a majority
of the outstanding shares entitled to vote.
All consents shall be filed with the secretary ofthe corporation and shall be maintained in the
corporate records. Any shareholder or other authorized person who has given a written consent
may revoke it by a writing received by the secretary of the corporation before written consents of
the number of shares required to authorize the proposed action have been filed with the secretary.
Unless the consents of all shareholders entitled to vote have been solicited in writing, prompt
notice shall be given of any corporate action approved by shareholders without a meeting by less
than unanimous consent, to those shareholders entitled to vote who have not consented in
writing. As to approvals required by California Corporations Code section 310 (transactions in
which a director has a financial interest), section 317 (indemnification of corporate agents),
section 1201 (corporate reorganization), or section 2007 (certain distributions on dissolution),
notice of the approval shall be given at least ten days before the consummation of any action
authorized by the approval. Notice shall be given in the manner specified in Section 5 of this
Article II.
Section 11. RECORD DATE FOR SHAREHOLDER NOTICE OF MEETING, VOTING,
AND GIVING CONSENT.
(a) For purposes of determining the shareholders entitled to receive notice of and vote at a
shareholders' meeting or give written consent to corporate action without a meeting, the board
may fix in advance a record date that is not more than 60 nor less than 10 days before the date of
a shareholders' meeting, or not more than 60 days before any other action.
(b) If no record date is fixed:
1. The record date for determining shareholders entitled to receive notice of and vote at a
shareholders' meeting shall be the business day next preceding the day on which notice is given,
or if notice is waived as provided in the business day next preceding the day on which the
meeting is held.
2. The record date for determining shareholders entitled to give consent to corporate action in
writing without a meeting, if no prior action has been taken by the board, shall be the day on
which the first written consent is given.
3. The record date for determining shareholders for any other purpose shall be as set forth in
Section 1 of Article VIII of these bylaws.
(c) A determination of shareholders of record entitled to receive notice of and vote at a
shareholders' meeting shall apply to any adjournment of the meeting unless the board fixes a new
record date for the adjourned meeting. However, the board shall fix a new record date if the
adjournment is to a date more than 45 days after the date set for the original meeting.
(d) Only shareholders of record on the corporation's books at the close ofbusiness on the record
date shall be entitled to any of the notice and voting rights listed in subsection (a) of this section,
notwithstanding any transfer of shares on the corporation's books after the record date, except as
otherwise required by law.
Section 12. PROXIES. Every person entitled to vote for directors or on any other matter shall
have the right to do so either in person or by one or more agents authorized by a written proxy
signed by the person and filed with the secretary of the corporation. A proxy shall be deemed
signed if the shareholder's name is placed on the proxy (whether by manual signature,
typewriting, telegraphic transmission, or otherwise) by the shareholder or the shareholder's
attorney in fact. A validly executed proxy that does not state that it is irrevocable shall continue
in full force and effect unless ( 1) revoked by the person executing it, before the vote under that
proxy, by a writing delivered to the corporation stating that the proxy is revoked, or by
attendance at the meeting and voting in person by the person executing the proxy or by a
subsequent proxy executed by the same person and presented at the meeting; or (ii) written notice
of the death or incapacity of the maker of that proxy is received by the corporation before the
vote pursuant to that proxy is counted; provided, however, that no proxy shall be valid after the
expiration of 11 months from the date of the proxy, unless otherwise provided in the proxy. The
revocability of a proxy that states on its face that it is irrevocable shall be governed by the
provisions of sections 705(e) and 705(f) ofthe Corporations Code ofCalifornia.
Section 13. INSPECTORS OF ELECTION. Before any meeting of shareholders, the board of
directors may appoint any persons other than nominees for office to act as inspectors of election
at the meeting or its adjournment. If no inspectors of election are so appointed, the chairperson of
the meeting may, and on the request of any shareholder or a shareholder's proxy shall, appoint
inspectors of election at the meeting. The number of inspectors shall be either one or three. If
inspectors are appointed at a meeting on the request of one or more shareholders or proxies, the
holders of a majority of shares or their proxies present at the meeting shall determine whether
one or three inspectors are to be appointed. If any person appointed as inspector fails to appear or
fails or refuses to act, the chair of the meeting may, and upon the request of any shareholder or a
shareholder's proxy shall, appoint a person to fill that vacancy.
These inspectors shall: (a) determine the number of shares outstanding and the voting power of
each, the shares represented at the meeting, the existence of a quorum, and the authenticity,
validity, and effect of proxies; (b) receive votes, ballots, or consents; (C) hear and determine all
challenges and questions in any way arising in connection with the right to vote; (d) count and
tabulate all votes or consents; (e) determine when the polls shall close; (f) determine the result;
and (g) do any other acts that may be proper to conduct the election or vote with fairness to all
shareholders.
ARTICLE III
DIRECTORS
Section 1. POWERS. Subject to the provisions of the California General Corporation Law and
any limitations in the articles of incorporation and these bylaws relating to action required to be
approved by the shareholders or by the outstanding shares, the business and affairs of the
corporation shall be managed and all corporate powers shall be exercised by or under the
direction of the board of directors.
Without prejudice to these general powers, and subject to the same limitations, the board of
directors shall have the power to:
(a) Select and remove all officers, agents, and employees of the corporation; prescribe any
powers and duties for them that are consistent with law, with the articles of incorporation, and
with these bylaws; £ ix their compensation; and require from them security for faithful service.
(b) Change the principal executive office or the principal business office in the State of
California from one location to another; cause the corporation to be qualified to do business in
any other state, territory, dependency, or country and conduct business within or outside the State
of California; and designate any place within or outside the State of California for holding any
shareholders' meeting or meetings, including annual meetings.
(c) Adopt, make, and use a corporate seal; prescribe the forms of certificates of stock; and alter
the form of the seal and certificates.
(d) Authorize the issuance of shares of stock of the corporation on any lawful terms, in
consideration of money paid, labor done, services actually rendered, debts or securities canceled,
or tangible or intangible property actually received.
(e) Borrow money and incur indebtedness on behalf of the corporation, and cause to be executed
and delivered for the corporation's purposes, in the corporate name, promissory notes, bonds,
debentures, deeds of trust, mortgages, pledges, hypothecations, and other evidences of debt and
securities.
Section 2. NUMBER OF DIRECTORS. The authorized number of directors shall be three until
changed by amendment to this bylaw adopted by the unanimous written consent of the
outstanding shares
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1 JEFFREY F. RYAN (State Bar No. 129079) LAW OFFICES OF JEFFREY F. RYAN 2 The Fitzpatrick Building 3 2000 Broadway Street Redwood City, California 94063-1802 4 Phone: (650) 922-2341 5 Email: jeff@jeffreyryanlaw.com 6 Attorneys for Plaintiff & Petitioner FRED H. GEISLER, M.D., Ph.D. 7 IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA 8 FOR THE COUNTY OF SAN MATEO 9 CIVIL DIVISION – SOUTHERN BRANCH 10 FRED H. GEISLER, M.D., Ph.D., Case No. 17CIV02888 11 Petitioner, VERIFIED PETITION FOR 12 APPOINTMENT OF PROVISIONAL vs. DIRECTOR WITH EXHIBITS 13 (Corp. C. § 308(a)) 14 RHAUSLER, INC., a California corporation, Date: August 2, 2022 15 Time: 2:00 p.m. 16 Respondent, Dept.: 2 (VIA ZOOM) 17 Assigned for All Purposes to Honorable Marie S. Weiner 18 19 (Memorandum of Points & Authorities and [proposed] Order filed separately.) 20 21 FRED H. GEISLER, M.D., Ph.D. (“PETITIONER”), by his verified petition, 22 alleges as follows: 23 1. PETITIONER is an individual and is now, and at all times mentioned in this 24 petition was, a resident of Emmet County, State of Michigan. 25 2. Respondent, RHAUSLER, INC. (“RHAUSLER”), is now, and at all times 26 mentioned in this petition was, a corporation organized and existing under the laws of the 27 State of California, with its principal place of business in San Mateo County, California. 28 _______________________________________________________________________________________________ 1 Verified Petition for Appointment of Provisional Director with Exhibits Geisler v. Rhausler Case No.: 17CIV0288 1 3. PETITIONER is a member of the board of directors of RHAUSLER. A true copy 2 of RHAUSLER’S “Statement of Information,” filed 02/24/2022, listing PETITIONER as 3 the only director is appended hereto as Exhibit A, and the interested parties may access the 4 historical filings with the California Secretary of State by RHAUSLER at 5 https://bizfileonline.sos.ca.gov/search/business. 6 4. The board of directors of RHAUSLER consists of 3 directors pursuant to Article 7 III, Section 2 of the Bylaws of RHAUSLER, a true copy of which is appended hereto as 8 Exhibit B, although the aforesaid “Statement of Information” erroneously reflects that 9 while PETITIONER is the only director, there are no vacancies on the board. 10 5. On October 5, 2019, Robert J. Glynn, Jr., the secretary, former general counsel 11 and a director of RHAUSLER, died, as this Court so found by its Case Management Order 12 #20, filed in case number 17CIV02888 on October 22, 2019. A true copy of that Case 13 Management Order is appended hereto as Exhibit C. 14 6. By Order filed March 2, 2022, this Court disqualified Daniel Hardy, Esq., and the 15 Coombs & Dunlap, LLP, law firm from representing RHAUSLER, leaving the corporation 16 without counsel in this shareholders’ derivative action. The Court further ordered that 17 PETITIONER’S counsel facilitate the retention of new counsel to represent RHAUSLER 18 because, as the Court noted, under California law a corporation may not appear pro se; it 19 must be represented by a licensed attorney. A true copy of the Court’s 03/03/2022 Order 20 re: Motion for Disqualification of Counsel is appended hereto as Exhibit D. 21 7. PETITIONER, with the assistance of his counsel, retained the services of James 22 J. Der, Jr., SBN 121417, as replacement for Daniel Hardy to represent RHAUSLER in the 23 within derivative action. Mr. Der wrote to Mr. Hardy on March 30, 2022, requesting that 24 the RHAUSLER client file be sent to new counsel, Mr. Der. A true copy of that 25 03/30/2022 letter is appended hereto as Exhibit E. In that letter, new counsel for 26 RHAUSLER, Mr. Der, reiterated that a Substitution of Attorney had been served and filed 27 on March 21, 2022, and a true copy of said Substitution of Attorney is appended hereto as 28 _______________________________________________________________________________________________ 2 Verified Petition for Appointment of Provisional Director with Exhibits Geisler v. Rhausler Case No.: 17CIV0288 1 Exhibit F. 2 8. On April 5, 2022, Mr. Hardy responded by email to Mr. Der’s 03/30/2022 letter, 3 advising new counsel that absent some more authoritative imprimatur on the substitution 4 of attorneys, the disqualified Mr. Hardy felt constrained by the Rules of Professional 5 Conduct to withhold the RHAUSLER client file from Mr. Der. A true copy of Mr. Hardy’s 6 04/05/2022 email to Mr. Der is appended hereto as Exhibit G. 7 9. During the conflicted representation of RHAUSLER from which the Court 8 disqualified him on March 2, 2022, attorney Hardy and his firm, Coombs & Dunlap, LLP, 9 were being paid $5,000 per month by RHAUSLER as and for attorney fees on account. In 10 all the papers filed in support of, and opposition to, the motion to disqualify Hardy and the 11 Coombs & Dunlap firm, no party to this action, nor any person or entity that was the 12 subject of the disqualification motion, ever disputed that said monthly payments were 13 being made. 14 10. On June 2, 2022, PETITIONER transmitted by email to defendant JOHNSTON, 15 who is listed on the aforesaid “Statement of Information” (Exh. A) as holding all 16 RHAUSLER corporate offices, but who is also erroneously omitted as a director of 17 RHAUSLER, a document entitled “RHAUSLER, INC. DIRECTORS’ ACTION BY 18 UNANIMOUS WRITTEN CONSENT,” which PETITIONER asked JOHNSTON to sign 19 and return. As PETITIONER explained in the transmittal email, said UNANIMOUS 20 WRITTEN CONSENT would enable new counsel Der to obtain the RHAUSLER client 21 file from disqualified counsel Hardy, and enable RHAUSLER to pay new counsel Der 22 attorney fees at the same level ($5,000 per month) as Hardy and his law firm were being 23 paid prior to the disqualification order of March 2, 2022. A true copy of PETITIONER’S 24 06/02/2022 email to JOHNSTON is appended hereto as Exhibit H, and a true copy of the 25 aforesaid UNANIMOUS CONSENT that was attached to the 06/02/2022 email is at 26 Exhibit I. Mr. JOHNSTON has failed, refused or neglected to execute and return said 27 UNANIMOUS CONSENT to PETITIONER. 28 _______________________________________________________________________________________________ 3 Verified Petition for Appointment of Provisional Director with Exhibits Geisler v. Rhausler Case No.: 17CIV0288 1 6. Since October 5, 2019, the date of Mr. Glynn’s demise, the directors 2 of RHAUSLER have been equally divided and cannot agree as to the most elemental 3 aspects of the corporate governance of RHAUSLER, including such routine matters as the 4 retention of legal counsel, payment of legal counsel’s fees, and the direction to disqualified 5 counsel Hardy and the Coombs law firm to turn the RHAUSLER client file over to new 6 counsel. Indeed, neither PETITIONER nor any of the other shareholders of RHAUSLER 7 have been provided with an official, audited inventory of RHAUSLER’S physical assets, 8 including product inventory, since 2018, when said inventory was reported to be 9 $4,000,000, some of which may have already been used to pay Hardy and the Coombs law 10 firm. 11 7. PETITIONER is informed and believes, and on the basis of such information and 12 belief alleges, that as a result of the equal division of the directors as set forth above, new 13 counsel Der will not be able effectively represent, or even continue to represent 14 RHAUSLER in the aforesaid derivative action unless there is some controlling authority 15 permitting a Court to appoint counsel to serve without recompense. 16 8. As the Court is aware, defendant JOHNSTON is in Chapter 7 bankruptcy 17 proceedings in the District of Nevada; his roughly 41% ownership interest in 18 RHAUSLER’S stock has thus devolved upon the Chapter 7 trustee, who by his counsel, 19 Jason Imes, Esq., has shown indifference to PETITIONER’S request that he join with 20 PETITIONER and the other Plaintiff-shareholders to form a greater-than-50% ownership 21 majority to accomplish by a vote of shareholders that which is now being requested of the 22 Court, namely the appointment of an independent third corporate director to break the 23 aforementioned stalemate between PETITIONER and JOHNSTON. 24 9. David Morris, M.D., a board-certified neurological surgeon familiar with 25 RHAUSLER and its spinal implant devices; he is also a former shareholder of 26 RHAUSLER, having sold his stock in a private transaction in November 2019. He and is 27 willing to act as a provisional director. Dr. Morris, who practices spinal surgery at the 28 _______________________________________________________________________________________________ 4 Verified Petition for Appointment of Provisional Director with Exhibits Geisler v. Rhausler Case No.: 17CIV0288 1 Center for Neurological Surgery at Petoskey, Michigan, is an impartial person, who is 2 neither a shareholder nor a creditor of RHAUSLER and is not related by consanguinity or 3 affinity within the third degree according to the common law to any of the other directors 4 of the corporation or to any judge of this court. 5 WHEREFORE, petitioner requests an order appointing a provisional director to 6 serve until removed by further order of the Court or by approval of the outstanding shares 7 as provided in Corp. Code § 308. 8 9 Dated: June 14, 2022 By:_______________________________ JEFFREY F. RYAN 10 Counsel for Petitioner Fred H. Geisler, M.D., Ph.D. 11 12 13 VERIFICATION 14 I, FRED H. GEISLER, am one of the plaintiffs in the above-entitled action, and the 15 Petitioner in the within application for appointment of provisional director. I have read the 16 foregoing Petition and know its contents. The same is true of my own knowledge, except 17 as to those matters which are alleged on information and belief, and as to those matters, I 18 believe them to be true. 19 I declare under penalty of perjury under the laws of the State of California that the 20 foregoing is true and correct. Executed this 13th day of June, 2022. 21 22 _____________________________________________ 23 FRED H. GEISLER 24 25 26 27 28 _______________________________________________________________________________________________ 5 Verified Petition for Appointment of Provisional Director with Exhibits Geisler v. Rhausler Case No.: 17CIV0288 1 PROOF OF E-SERVICE 2 I, the undersigned, declare that I am over the age of 18 years and not a party to this 3 action. My business address is 2000 Broadway Street, Redwood City, CA 94063. 4 Pursuant to two written JOINT stipulations dated February 8, 2018 and October 15, 5 2018 by and among the following parties, and by Case Management Order #8 dated 6 November 20, 2018, I caused to be served on set date set forth below, by means of electronic 7 mail, the attached document(s) to the Person(s) at the email address set forth below their 8 respective names: 9 DOCUMENTS SERVED: 10 VERIFIED PETITION FOR APPOINTMENT OF PROVISIONAL DIRECTOR WITH 11 EXHIBITS 12 MEMORANDUM OF POINTS & AUTHORITIES IN SUPPORT OF VERIFIED 13 PETITION FOR APPOINTMENT OF PROVISIONAL DIRECTOR 14 [proposed] ORDER ON VERIFIED PETITION FOR APPOINTMENT OF 15 PROVISIONAL DIRECTOR 16 PERSONS SERVED: 17 David Dell, Esq. Terry J. Johnston Daniel Hardy, Esq. 7551 Saguaro Cactus Avenue 18 Coombs & Dunlap, LLP Las Vegas, NV 89178 1211 Division Street Terry.j.johnston7551@gmail.com 19 Napa, CA 94559 Defendant/Cross-Complainant 20 DDell@coombslaw.com DHardy@coombslaw.com 21 Attorney for Rhausler, Inc. 22 Judge’s Copy – Department 2 San Mateo Superior Court 23 400 County Center 24 Redwood City, CA 94063 complexcivil@sanmateocourt.org 25 I declare under penalty of perjury under the laws of the State of California that the 26 foregoing is true and correct. Executed in Redwood City, California, on June 16, 2022. 27 28 ________________________ Judy Lucero PROOF OF E-SERVICE BY JOINT STIPULATION SAN MATEO COUNTY SUPERIOR COURT CASE NO. 17CIV02888 COMPLEX LITIGATION – ASSIGNED TO DEPT. 2 FOR ALL PURPOSES EXHIBIT “A” California Secretary of State Electronic Filing Corporation - Statement of Information Entity Name: RHAUSLER INC. Entity (File) Number: C3074956 File Date: 02/24/2022 Entity Type: Jurisdiction: CALIFORNIA H267152 Detailed Filing Information Entity Name: RHAUSLER INC. Business Addresses: Street Address of Principal Office in California: 299 Old County Road #8 San Carlos, California 94070 United States of America Mailing Address: 299 Old County Road #8 San Carlos, California 94070 United States of America Street Address of Principal Executive Office: 299 Old County Road #8 San Carlos, California 94070 H267152 United States of America Officers: Chief Executive Officer: Terry Johnston 7551 Saguaro Cactus Avenue Las Vegas , Nevada 89178 United States of America b. Secretary: Terry Johnston 7551 Saguaro Cactus Avenue Las Vegas , Nevada 89178 United States of America Use bizfile.sos.ca.gov for online filings, searches, business records, and resources. California Secretary of State Electronic Filing Terry Johnson 7551 Saguaro Cactus Avenue Las Vegas , Nevada 89178 United States of America Director: Fred Geisler 401 N Wabash, Unit 62F Chicago, Illinois 60611 United States of America Number of Vacancies on the Board of Directors: 0 Service of Process: Terry Johnston 299 Old County Road, #8 San Carlos, California 94070 United States of America Type of Business: Medical Wholesale No Officer or Director of this Corporation has an outstanding final judgment issued by the Division of Labor Standards Enforcement or a court of law, for which no appeal therefrom is pending, for the violation of any wage order or provision of the Labor Code. Electronic Signature: Terry Johnston H267152 Use bizfile.sos.ca.gov for online filings, searches, business records, and resources. EXHIBIT “B” BYLAWS OF RHAUSLER INC. A California Corporation ARTICLE I OFFICES Section 1. PRINCIPAL EXECUTIVE OR BUSINESS OFFICES. The board of directors shall fix the location of the principal executive office of the corporation at any place within or outside the State of California. If the principal executive office is located outside California and the corporation has one or more business offices in California, the board shall fix and designate a principal business office in California. Section 2. OTHER OFFICES. Branch or subordinate offices may be established at any time and at any place by the board of directors or by the President and CEO. ARTICLE II MEETINGS OF SHAREHOLDERS Section 1. PLACE OF MEETINGS. Meetings of shareholders shall be held at any place within or outside the State of California designated by the board of directors. In the absence of a designation by the board, shareholders' meetings shall be held at the corporation's principal executive office. Section 2. ANNUAL MEETING. The annual meeting of shareholders shall be held each year on Tuesday in the first week of March at 10:00 AM or if this day is a holiday, then the meeting will be held on the next succeeding business day at the same time. The date so designated shall be within three months after the end of the corporation's fiscal year, and within fifteen months after the last annual meeting. At each annual meeting, directors shall be elected and any other proper business within the power of the shareholders may be transacted. Section 3. SPECIAL MEETING. A special meeting of the shareholders may be called at any time by the board of directors, by the chairperson of the board, by the president or CEO, or by one or more shareholders holding shares that in the aggregate are entitled to cast ten percent or more of the votes at that meeting. If a special meeting is called by anyone other than the board of directors, the person or persons calling the meeting shall make a request in writing, delivered personally or sent by registered mail or by telegraphic or other facsimile transmission, to the chairperson of the board or the president, vice president, or secretary, specifying the time and date of the meeting (which is not less than 35 nor more than 60 days after receipt of the request) and the general nature ofthe business proposed to be transacted. Within 20 days after receipt, the officer receiving the request shall cause notice to be given to the shareholders entitled to vote, stating that a meeting will be held at the time requested by the person(s) calling the meeting, and stating the general nature of the business proposed to be transacted. If notice is not given within 20 days after receipt of the request, the person or persons requesting the meeting may give the notice. Nothing in this paragraph shall be construed as limiting, fixing, or affecting the time when a meeting of shareholders called by action of the board may be held. Section 4. NOTICE OF SHAREHOLDERS' MEETINGS. All notices of meetings of shareholders shall be sent or otherwise given not fewer than 10 nor more than 60 days before the date of the meeting to shareholders entitled to notice. The notice shall specify the place, date, and hour of the meeting, and (i) in the case of a special meeting, the general nature of the business to be transacted, or (ii) in the case of the annual meeting, those matters that the board of directors, at the time of giving the notice, intends to present for action by the shareholders. If directors are to be elected, the notice shall include the names of all nominees whom the board intends, at the time of the notice, to present for election. The notice shall also state the general nature of any proposed action to be taken at the meeting to approve any of the following matters: (i) A transaction in which a director has a financial interest, within the meaning of §31 0 of the California Corporations Code; (ii) An amendment of the articles of incorporation. (iii) Involving reorganization, winding up, dissolution as provided for in the Corporations Code of the State of California. Section 5. MANNER OF GIVING NOTICE: Notice of any shareholders' meeting shall be given either personally or by first-class mail, fax or e-mail or other written communication, charges prepaid, addressed to the shareholder at the address appearing on the corporation's books or given by the shareholder to the corporation for purposes of notice. Notice is deemed to have been given at the time when delivered personally or deposited in the mall or sent by other means of written communication. Section 6. QUORUM. The presence in person or by proxy of the holders of a majority of the shares entitled to vote at any meeting of the shareholders shall constitute a quorum for the transaction of business. The shareholders present at a duly called or held meeting at which a quorum is present may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum, if any action taken other than adjournment is approved by at least a majority of the shares required to constitute a quorum. Section 7. ADJOURNED MEETING; NOTICE. Any shareholders' meeting, annual or special, whether or not a quorum is present, may be adjourned from time to time by the vote of the majority of the shares represented at that meeting, either in person or by proxy, but in the absence of a quorum, no other business may be transacted at that meeting. When any meeting of shareholders, either annual or special, is adjourned to another time or place, notice of the adjourned meeting need not be given if the time and place are announced at the meeting at which the adjournment is taken, unless a new record date for the adjourned meeting is fixed, or unless the adjournment is for more than 45 days after the date set for the original meeting, in which case the board of directors shall set a new record date. At any adjourned meeting, the corporation may transact any business that might have been transacted at the original meeting. Section 8. VOTING. The shareholders entitled to vote at any meeting of shareholders shall be determined in accordance with bylaw provisions on record date, Section 11 of this Article II, subject to the provisions of sections 702 through 704 of the California Corporations Code relating to voting shares held by a fiduciary, in the name of a corporation, or in joint ownership. The shareholders' vote may be by voice vote or by ballot, provided, however, that any election for directors must be by ballot if demanded by any shareholder before the voting has begun. On any matter other than the election of directors, any shareholder may vote part of the shares the shareholder is to vote in favor of the proposal and refrain from voting the remaining shares or vote them against the proposal, but, if the shareholder fails to specify the number of shares that the shareholder is voting affirmatively, it will be conclusively presumed that the shareholder's approving vote is with respect to all shares that the shareholder is entitled to vote. If a quorum is present (or if a quorum has been present earlier at the meeting but some shareholders have withdrawn), the affirmative vote of a majority of the shares represented and voting, provided such shares voting affirmatively also constitute a majority of the number of shares required for a quorum, shall be the act of the shareholders unless the vote of a greater number or voting by classes is required by law or by the articles of incorporation. At a shareholders' meeting at which directors are to be elected, no shareholder shall be entitled to cumulate votes by casting for any candidate a number of votes greater than the number of votes which that shareholder normally would be entitled to cast, unless the candidates' names have been placed in nomination before commencement of the voting and a shareholder has given notice at the meeting, before the voting has begun, of the shareholder's intention to cumulate votes. If any shareholder as given such a notice, then all shareholders entitled to vote may cumulate their votes for candidates in nomination, and may give one candidate a number of votes equal to the number of directors to be elected multiplied by the number of votes to which that shareholder's shares are normally entitled, or distribute the shareholder's votes on the same principle among any or all of the candidates, as the shareholder thinks fit. The candidates receiving the highest number of votes, up to the number of directors to be elected, shall be elected. Section 9. WAIVER OF NOTICE OR CONSENT BY ABSENT SHAREHOLDERS. The transactions of any meeting of shareholders, either annual or special, however called and noticed and wherever held, shall be as valid as though they were had at a meeting duly held after regular call and notice, if a quorum is present either in person or by proxy, and if each person entitled to vote who was not present in person or by proxy, either before or after the meeting, signs a written waiver of notice or a consent to holding the meeting or an approval of the minutes of the meeting. The waiver of notice or consent need not specify either the business to be transacted or the purpose of any annual or special meeting of the shareholders, except that, if action is taken or proposed to be taken for approval of any of those matters specified in section 601 (f) of the California Corporations Code, such as: (i) A transaction in which a director has a financial interest, within the meaning of §31 0 of the California Corporations Code; (ii) An amendment of the articles of incorporation under §902 of that Code; (iii) A reorganization under§ 1201 ofthat Code; (iv) A voluntary dissolution under§ 1900 ofthat Code; or (v) A distribution in dissolution that requires approval of the outstanding shares under §2007 of that Code. The waiver of notice or consent is required to state the general nature of the action or proposed action. All waivers, consents, and approvals shall be filed with the corporate records or made a part of the minutes of the meeting. A shareholder's attendance at a meeting also constitutes a waiver of notice of that meeting, unless the shareholder at the beginning of the meeting objects to the transaction of any business on the ground that the meeting was not lawfully called or convened. In addition, attendance at a meeting does not constitute a waiver of any right to object to consideration of matters required by law to be included in the notice of the meeting which were not so included, if that objection is expressly made at the meeting. Section 10. SHAREHOLDER ACTION BY WRITTEN CONSENT WITHOUT A MEETING. Any action that could be taken at an annual or special meeting of shareholders may be taken without a meeting and without prior notice, if a consent in writing, setting forth the action so taken, is signed by the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take that action at a meeting at which all shares entitled to vote on that action were present and voted. Directors may be elected by written consent of the shareholders without a meeting only if the written consents of all outstanding shares entitled to vote are obtained, except that vacancies on the board not filled by the board may be filled by the written consent of the holders of a majority of the outstanding shares entitled to vote. All consents shall be filed with the secretary ofthe corporation and shall be maintained in the corporate records. Any shareholder or other authorized person who has given a written consent may revoke it by a writing received by the secretary of the corporation before written consents of the number of shares required to authorize the proposed action have been filed with the secretary. Unless the consents of all shareholders entitled to vote have been solicited in writing, prompt notice shall be given of any corporate action approved by shareholders without a meeting by less than unanimous consent, to those shareholders entitled to vote who have not consented in writing. As to approvals required by California Corporations Code section 310 (transactions in which a director has a financial interest), section 317 (indemnification of corporate agents), section 1201 (corporate reorganization), or section 2007 (certain distributions on dissolution), notice of the approval shall be given at least ten days before the consummation of any action authorized by the approval. Notice shall be given in the manner specified in Section 5 of this Article II. Section 11. RECORD DATE FOR SHAREHOLDER NOTICE OF MEETING, VOTING, AND GIVING CONSENT. (a) For purposes of determining the shareholders entitled to receive notice of and vote at a shareholders' meeting or give written consent to corporate action without a meeting, the board may fix in advance a record date that is not more than 60 nor less than 10 days before the date of a shareholders' meeting, or not more than 60 days before any other action. (b) If no record date is fixed: 1. The record date for determining shareholders entitled to receive notice of and vote at a shareholders' meeting shall be the business day next preceding the day on which notice is given, or if notice is waived as provided in the business day next preceding the day on which the meeting is held. 2. The record date for determining shareholders entitled to give consent to corporate action in writing without a meeting, if no prior action has been taken by the board, shall be the day on which the first written consent is given. 3. The record date for determining shareholders for any other purpose shall be as set forth in Section 1 of Article VIII of these bylaws. (c) A determination of shareholders of record entitled to receive notice of and vote at a shareholders' meeting shall apply to any adjournment of the meeting unless the board fixes a new record date for the adjourned meeting. However, the board shall fix a new record date if the adjournment is to a date more than 45 days after the date set for the original meeting. (d) Only shareholders of record on the corporation's books at the close ofbusiness on the record date shall be entitled to any of the notice and voting rights listed in subsection (a) of this section, notwithstanding any transfer of shares on the corporation's books after the record date, except as otherwise required by law. Section 12. PROXIES. Every person entitled to vote for directors or on any other matter shall have the right to do so either in person or by one or more agents authorized by a written proxy signed by the person and filed with the secretary of the corporation. A proxy shall be deemed signed if the shareholder's name is placed on the proxy (whether by manual signature, typewriting, telegraphic transmission, or otherwise) by the shareholder or the shareholder's attorney in fact. A validly executed proxy that does not state that it is irrevocable shall continue in full force and effect unless ( 1) revoked by the person executing it, before the vote under that proxy, by a writing delivered to the corporation stating that the proxy is revoked, or by attendance at the meeting and voting in person by the person executing the proxy or by a subsequent proxy executed by the same person and presented at the meeting; or (ii) written notice of the death or incapacity of the maker of that proxy is received by the corporation before the vote pursuant to that proxy is counted; provided, however, that no proxy shall be valid after the expiration of 11 months from the date of the proxy, unless otherwise provided in the proxy. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of sections 705(e) and 705(f) ofthe Corporations Code ofCalifornia. Section 13. INSPECTORS OF ELECTION. Before any meeting of shareholders, the board of directors may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment. If no inspectors of election are so appointed, the chairperson of the meeting may, and on the request of any shareholder or a shareholder's proxy shall, appoint inspectors of election at the meeting. The number of inspectors shall be either one or three. If inspectors are appointed at a meeting on the request of one or more shareholders or proxies, the holders of a majority of shares or their proxies present at the meeting shall determine whether one or three inspectors are to be appointed. If any person appointed as inspector fails to appear or fails or refuses to act, the chair of the meeting may, and upon the request of any shareholder or a shareholder's proxy shall, appoint a person to fill that vacancy. These inspectors shall: (a) determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity, and effect of proxies; (b) receive votes, ballots, or consents; (C) hear and determine all challenges and questions in any way arising in connection with the right to vote; (d) count and tabulate all votes or consents; (e) determine when the polls shall close; (f) determine the result; and (g) do any other acts that may be proper to conduct the election or vote with fairness to all shareholders. ARTICLE III DIRECTORS Section 1. POWERS. Subject to the provisions of the California General Corporation Law and any limitations in the articles of incorporation and these bylaws relating to action required to be approved by the shareholders or by the outstanding shares, the business and affairs of the corporation shall be managed and all corporate powers shall be exercised by or under the direction of the board of directors. Without prejudice to these general powers, and subject to the same limitations, the board of directors shall have the power to: (a) Select and remove all officers, agents, and employees of the corporation; prescribe any powers and duties for them that are consistent with law, with the articles of incorporation, and with these bylaws; £ ix their compensation; and require from them security for faithful service. (b) Change the principal executive office or the principal business office in the State of California from one location to another; cause the corporation to be qualified to do business in any other state, territory, dependency, or country and conduct business within or outside the State of California; and designate any place within or outside the State of California for holding any shareholders' meeting or meetings, including annual meetings. (c) Adopt, make, and use a corporate seal; prescribe the forms of certificates of stock; and alter the form of the seal and certificates. (d) Authorize the issuance of shares of stock of the corporation on any lawful terms, in consideration of money paid, labor done, services actually rendered, debts or securities canceled, or tangible or intangible property actually received. (e) Borrow money and incur indebtedness on behalf of the corporation, and cause to be executed and delivered for the corporation's purposes, in the corporate name, promissory notes, bonds, debentures, deeds of trust, mortgages, pledges, hypothecations, and other evidences of debt and securities. Section 2. NUMBER OF DIRECTORS. The authorized number of directors shall be three until changed by amendment to this bylaw adopted by the unanimous written consent of the outstanding shares