As filed with the Securities and Exchange Commission on February 8, 2012

Registration No. 333-179287

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

Amendment No. 1 to

Form S-1

REGISTRATION STATEMENT

Under

The Securities Act of 1933

 

 

 

Facebook, Inc.

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware    7370         20-1665019

(State or other jurisdiction of

incorporation or organization)

  

(Primary Standard Industrial

Classification Code Number)

       

(IRS Employer

Identification No.)

 

Facebook, Inc.

1601 Willow Road

Menlo Park, California 94025

(650) 308-7300

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

 

David A. Ebersman

Chief Financial Officer

Facebook, Inc.

1601 Willow Road

Menlo Park, California 94025

(650) 308-7300

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

 

Please send copies of all communications to:

 

Gordon K. Davidson, Esq.

Jeffrey R. Vetter, Esq.

James D. Evans, Esq.

Fenwick & West LLP

801 California Street

Mountain View, California 94041

(650) 988-8500

 

Theodore W. Ullyot, Esq.

David W. Kling, Esq.

Michael L. Johnson, Esq.

Facebook, Inc.

1601 Willow Road

Menlo Park, California 94025

(650) 308-7300

 

William H. Hinman, Jr., Esq.

Daniel N. Webb, Esq.

Simpson Thacher & Bartlett LLP

2550 Hanover Street

Palo Alto, California 94304

(650) 251-5000

 

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act, check the following box:   ¨

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.   ¨

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer   ¨

   

Accelerated filer   ¨

Non-accelerated filer   x

 

(Do not check if a smaller reporting company)

 

Smaller reporting company   ¨

 

 

 

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


EXPLANATORY NOTE

 

This Amendment No. 1 (Amendment No. 1) to the Registration Statement on Form S-1 (File No. 333-179287) of Facebook, Inc. (Registration Statement) is being filed solely for the purpose of filing certain exhibits as indicated in Part II of this Amendment No. 1. This Amendment No. 1 does not modify any provision of the prospectus that forms a part of the Registration Statement. Accordingly, a preliminary prospectus has been omitted.


PART II

 

INFORMATION NOT REQUIRED IN PROSPECTUS

 

Item 13. Other Expenses of Issuance and Distribution

 

The following table sets forth all expenses to be paid by the Registrant, other than estimated underwriting discounts and commissions, in connection with our initial public offering. All amounts shown are estimates except for the SEC registration fee and the FINRA filing fee:

 

SEC registration fee

   $ 573,000   

FINRA filing fee

     75,500   

Stock Exchange Listing fee

     *   

Printing and engraving

     *   

Legal fees and expenses

     *   

Accounting fees and expenses

     *   

Blue sky fees and expenses (including legal fees)

     *   

Transfer agent and registrar fees

     *   

Miscellaneous

     *   
  

 

 

 

Total

   $ *   
  

 

 

 

 

*  

To be completed by amendment.

 

Item 14. Indemnification of Directors and Officers

 

Section 145 of the Delaware General Corporation Law authorizes a court to award, or a corporation’s board of directors to grant, indemnity to directors and officers under certain circumstances and subject to certain limitations. The terms of Section 145 of the Delaware General Corporation Law are sufficiently broad to permit indemnification under certain circumstances for liabilities, including reimbursement of expenses incurred, arising under the Securities Act of 1933, as amended (the Securities Act).

 

As permitted by the Delaware General Corporation Law, the Registrant’s restated certificate of incorporation that will be in effect at the closing of the offering contains provisions that eliminate the personal liability of its directors for monetary damages for any breach of fiduciary duties as a director, except liability for the following:

 

   

any breach of the director’s duty of loyalty to the Registrant or its stockholders;

 

   

acts or omissions not in good faith or that involve intentional misconduct or a knowing violation of law;

 

   

under Section 174 of the Delaware General Corporation Law (regarding unlawful dividends and stock purchases); or

 

   

any transaction from which the director derived an improper personal benefit.

 

As permitted by the Delaware General Corporation Law, the Registrant’s restated bylaws that will be in effect at the closing of our initial public offering, provide that:

 

   

the Registrant is required to indemnify its directors and executive officers to the fullest extent permitted by the Delaware General Corporation Law, subject to very limited exceptions;

 

   

the Registrant may indemnify its other employees and agents as set forth in the Delaware General Corporation Law;

 

II-1


   

the Registrant is required to advance expenses, as incurred, to its directors and executive officers in connection with a legal proceeding to the fullest extent permitted by the Delaware General Corporation Law, subject to very limited exceptions; and

 

   

the rights conferred in the bylaws are not exclusive.

 

The Registrant has entered, and intends to continue to enter, into separate indemnification agreements with its directors and executive officers to provide these directors and executive officers additional contractual assurances regarding the scope of the indemnification set forth in the Registrant’s restated certificate of incorporation and restated bylaws and to provide additional procedural protections. At present, there is no pending litigation or proceeding involving a director or executive officer of the Registrant regarding which indemnification is sought. Reference is also made to the underwriting agreement to be filed as Exhibit 1.1 to this registration statement, which provides for the indemnification of executive officers, directors and controlling persons of the Registrant against certain liabilities. The indemnification provisions in the Registrant’s restated certificate of incorporation, restated bylaws and the indemnification agreements entered into or to be entered into between the Registrant and each of its directors and executive officers may be sufficiently broad to permit indemnification of the Registrant’s directors and executive officers for liabilities arising under the Securities Act.

 

The Registrant currently carries liability insurance for its directors and officers.

 

Item 15. Recent Sales of Unregistered Securities

 

Since February 1, 2009, we have made the following sales of unregistered securities (after giving effect to a 5-for-1 stock split effected in October 2010):

 

Preferred Stock Issuances

 

   

On May 26, 2009, we sold 44,037,540 shares of our Series E preferred stock to one accredited investor at a purchase price of $4.54 per share.

 

   

On February 2, 2011, we issued 3,257,280 shares of our Series A preferred stock and 2,960,240 shares of our Series B preferred stock to one accredited investor at per share purchase prices ranging from $0.00 to 0.06 pursuant to exercises of warrants.

 

   

On December 29, 2011, we issued 1,750,827 shares of our Series B preferred stock to one accredited investor at a per share purchase price of $0.06 pursuant to exercise of a warrant.

 

Plan-Related Issuances

 

   

From February 1, 2009 through January 31, 2012, we granted to our directors, officers, employees, consultants and other service providers options to purchase 14,263,370 shares of our Class B common stock with per share exercise prices ranging from $1.78 to $15.00 under our 2005 Stock Plan.

 

   

From February 1, 2009 through January 31, 2012, we issued to our directors, officers, employees, consultants, and other service providers an aggregate of 239,034,751 shares of our Class B common stock at per share purchase prices ranging from $0.00 to $2.95 pursuant to exercises of options granted under our 2005 Stock Plan.

 

   

From February 1, 2009 through January 31, 2012, we granted to our directors, officers, employees, consultants, and other service providers an aggregate of 257,697,957 RSUs to be settled in shares of our Class B common stock under our 2005 Stock Plan.

 

   

From February 1, 2009 through January 31, 2012, we sold to our directors, officers, employees, consultants, and other service providers an aggregate of 214,514 shares of our Class B common stock at per share purchase prices ranging from $0.00 to $30.03 granted under our 2005 Stock Plan.

 

II-2


Other Common Stock Issuances

 

   

On May 26, 2009, we issued 48,065 shares of our Class B common stock to one existing investor pursuant to the anti-dilution terms of such investor’s original investment.

 

   

On December 30, 2009, we issued 2,000,000 shares of our Class B common stock to a family member of our CEO. This award was made in satisfaction of funds provided for our initial working capital and a potential release of claims.

 

   

On June 2, 2010, we issued 5,000 shares of our Class B common stock to one accredited investor at a purchase price of $7.27 per share.

 

   

On December 27, 2010, we sold 21,582,733 shares of our Class A common stock to three accredited investors at a purchase price of $20.85 per share.

 

   

On December 31, 2010, we sold 2,398,081 shares of our Class A common stock to one accredited investor at a purchase price of $20.85 per share.

 

   

On January 21, 2011, we sold 47,961,630 shares of our Class A common stock to one accredited investor at a purchase price of $20.85 per share.

 

   

On September 15, 2011, we issued 29,640 shares of our Class B common stock as consideration to a former employee for services provided.

 

Acquisitions

 

   

On August 14, 2009, we issued 11,052,955 shares of our Class B common stock as consideration to ten individuals and one entity in connection with our acquisition of all the outstanding shares of a company.

 

   

On May 18, 2010, we issued 3,625,000 shares of our Class B common stock as consideration to a company in connection with our purchase of patents from the company.

 

   

On June 16, 2010, we issued 238,000 shares of our Class B common stock as consideration to a company in connection with our purchase of certain assets from the company.

 

   

On July 7, 2010, we issued 590,900 shares of our Class B common stock as consideration to a company in connection with our purchase of certain assets from the company.

 

   

On August 18, 2010, we issued 289,350 shares of our Class B common stock as consideration to two individuals in connection with our acquisition of all the outstanding shares of a company.

 

   

On October 29, 2010, we issued 1,309,284 shares of our Class B common stock as consideration to a company in connection with our purchase of certain assets from the company.

 

   

On November 12, 2010, we issued 350,000 shares of our Class B common stock as consideration to a company in connection with our purchase of certain assets from the company.

 

   

On December 15, 2010, we issued 1,030,000 shares of our Class B common stock as consideration to two individuals in connection with our acquisition of all the outstanding shares of a company.

 

   

On February 28, 2011, we issued 681,357 shares of our Class A common stock as consideration to a company in connection with our purchase of certain assets from the company.

 

   

On April 5, 2011, we issued 1,659,430 shares of our Class A common stock as consideration to 13 individuals and six entities in connection with our acquisition of all the outstanding shares of a company.

 

   

On August 1, 2011, we issued 75,426 shares of our Class A common stock as consideration to three individuals in connection with our acquisition of all the outstanding shares of a company.

 

II-3


   

On October 7, 2011, we issued 360,883 shares of our Class A common stock as consideration to 21 individuals and eight entities in connection with our acquisition of all the outstanding shares of a company.

 

   

On October 10, 2011, we issued 183,750 shares of our Class B common stock as consideration to a company for a license of certain technology from the company.

 

   

On January 3, 2012, we issued 90,000 shares of our Class A common stock as consideration to four individuals and 13 entities in connection with our purchase of certain assets from a company.

 

   

On February 1, 2012, we issued 212,250 shares of our Class A common stock as partial consideration to two entities in connection with our purchase of certain assets from a company.

 

Unless otherwise stated, the sales of the above securities were deemed to be exempt from registration under the Securities Act in reliance upon Section 4(2) of the Securities Act (or Regulation D or Regulation S promulgated thereunder), or Rule 701 promulgated under Section 3(b) of the Securities Act as transactions by an issuer not involving any public offering or pursuant to benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of the securities in each of these transactions represented their intentions to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were placed upon the stock certificates issued in these transactions.

 

II-4


Item 16. Exhibits and Financial Statement Schedules

 

(a) Exhibits.  The following exhibits are included herein or incorporated herein by reference:

 

Exhibit

Number

  

Description

  1.1*   

Form of Underwriting Agreement.

  3.1   

Eleventh Amended and Restated Certificate of Incorporation of Registrant.

  3.2   

Bylaws of Registrant.

  3.3*   

Form of Restated Certificate of Incorporation of Registrant, to be in effect at the closing of Registrant’s initial public offering.

  3.4*   

Form of Restated Bylaws of Registrant, to be in effect at the closing of Registrant’s initial public offering.

  4.1   

Form of Registrant’s Class A common stock certificate.

  4.2   

Sixth Amended and Restated Investors’ Rights Agreement, dated December 27, 2010, by and among Registrant and certain security holders of Registrant.

  4.3   

Form of “Type 1” Holder Voting Agreement, between Registrant, Mark Zuckerberg, and certain parties thereto.

  4.4   

Form of “Type 2” Holder Voting Agreement, between Registrant, Mark Zuckerberg, and certain parties thereto.

  4.5   

Form of “Type 3” Holder Voting Agreement, between Registrant, Mark Zuckerberg, and certain parties thereto.

  5.1*   

Opinion of Fenwick & West LLP.

10.1   

Form of Indemnification Agreement.

10.2   

2005 Stock Plan, as amended, and forms of award agreements.

10.3   

2005 Officers’ Stock Plan, and amended and restated notice of stock option grant and stock option agreement.

10.4*   

2012 Equity Incentive Plan, to be in effect upon the effectiveness of Registrant’s initial public offering, and forms of award agreements.

10.5   

2011 Bonus/Retention Plan.

10.6   

Amended and Restated Offer Letter, dated January 27, 2012, between Registrant and Mark Zuckerberg.

10.7   

Amended and Restated Employment Agreement, dated January 27, 2012, between Registrant and Sheryl K. Sandberg.

10.8   

Amended and Restated Offer Letter, dated January 27, 2012, between Registrant and David A. Ebersman.

10.9   

Amended and Restated Offer Letter, dated January 27, 2012, between Registrant and Mike Schroepfer.

10.10   

Amended and Restated Employment Agreement, dated January 27, 2012, between Registrant and Theodore W. Ullyot.

10.11†   

Lease, dated February 7, 2011, between Registrant and Wilson Menlo Park Campus, LLC.

10.12†   

Developer Addendum, dated May 14, 2010, between Registrant and Zynga Inc., as amended by Amendment No. 1 to Developer Addendum, dated October 1, 2011.

10.13†   

Developer Addendum No. 2, dated December 26, 2010, between Registrant and Zynga Inc.

 

II-5


Exhibit

Number

  

Description

10.14*   

Credit Agreement, dated February 18, 2011, between Registrant, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as amended by the First Amendment, dated June 28, 2011, and the Second Amendment, dated September 13, 2011.

10.15*   

Guarantee Agreement, dated February 18, 2011, between Registrant, the Subsidiary Guarantors party thereto, and JPMorgan Chase Bank, N.A.

10.16   

Conversion Agreement, dated February 19, 2010, between Registrant, Digital Sky Technologies Limited, and DST Global Limited.

21.1   

List of Subsidiaries of Registrant.

23.1#   

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.

23.2*   

Consent of Fenwick & West LLP (included in Exhibit 5.1).

24.1#   

Power of Attorney.

 

#  

Previously filed.

*  

To be filed by amendment.

 

Registrant has omitted portions of the referenced exhibit pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act.

 

(b) Financial Statement Schedules. All financial statement schedules are omitted because they are not applicable or the information is included in the Registrant’s consolidated financial statements or related notes.

 

Item 17. Undertakings

 

The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

 

The undersigned Registrant hereby undertakes that:

 

(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.

 

(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

II-6


SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Amendment No. 1 to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Menlo Park, State of California, on this 8th day of February 2012.

 

FACEBOOK, INC.

/ S /    D AVID A. E BERSMAN

David A. Ebersman

Chief Financial Officer

 

Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

*

Mark Zuckerberg

  

Chairman and Chief Executive Officer

(Principal Executive Officer)

  February 8, 2012

/ S /    D AVID A. E BERSMAN        

David A. Ebersman

  

Chief Financial Officer

(Principal Financial Officer)

  February 8, 2012

*

David M. Spillane

  

Director of Accounting

(Principal Accounting Officer)

  February 8, 2012

*

Marc L. Andreessen

   Director   February 8, 2012

*

Erskine B. Bowles

   Director   February 8, 2012

*

James W. Breyer

   Director   February 8, 2012

*

Donald E. Graham

   Director   February 8, 2012

*

Reed Hastings

   Director   February 8, 2012

*

Peter A. Thiel

   Director   February 8, 2012

*By: 

  / S /    D AVID A. E BERSMAN        

 

 

David A. Ebersman

Attorney-in-fact

 

II-7


EXHIBIT INDEX

 

Exhibit

Number

  

Description

  1.1*   

Form of Underwriting Agreement.

  3.1   

Eleventh Amended and Restated Certificate of Incorporation of Registrant.

  3.2   

Bylaws of Registrant.

  3.3*   

Form of Restated Certificate of Incorporation of Registrant, to be in effect at the closing of Registrant’s initial public offering.

  3.4*   

Form of Restated Bylaws of Registrant, to be in effect at the closing of Registrant’s initial public offering.

  4.1   

Form of Registrant’s Class A common stock certificate.

  4.2   

Sixth Amended and Restated Investors’ Rights Agreement, dated December 27, 2010, by and among Registrant and certain security holders of Registrant.

  4.3   

Form of “Type 1” Holder Voting Agreement, between Registrant, Mark Zuckerberg, and certain parties thereto.

  4.4   

Form of “Type 2” Holder Voting Agreement, between Registrant, Mark Zuckerberg, and certain parties thereto.

  4.5   

Form of “Type 3” Holder Voting Agreement, between Registrant, Mark Zuckerberg, and certain parties thereto.

  5.1*   

Opinion of Fenwick & West LLP.

10.1   

Form of Indemnification Agreement.

10.2   

2005 Stock Plan, as amended, and forms of award agreements.

10.3   

2005 Officers’ Stock Plan, and amended and restated notice of stock option grant and stock option agreement.

10.4*   

2012 Equity Incentive Plan, to be in effect upon the effectiveness of Registrant’s initial public offering, and forms of award agreements.

10.5   

2011 Bonus/Retention Plan.

10.6   

Amended and Restated Offer Letter, dated January 27, 2012, between Registrant and Mark Zuckerberg.

10.7   

Amended and Restated Employment Agreement, dated January 27, 2012, between Registrant and Sheryl K. Sandberg.

10.8   

Amended and Restated Offer Letter, dated January 27, 2012, between Registrant and David A. Ebersman.

10.9   

Amended and Restated Offer Letter, dated January 27, 2012, between Registrant and Mike Schroepfer.

10.10   

Amended and Restated Employment Agreement, dated January 27, 2012, between Registrant and Theodore W. Ullyot.

10.11†   

Lease, dated February 7, 2011, between Registrant and Wilson Menlo Park Campus, LLC.

10.12†   

Developer Addendum, dated May 14, 2010, between Registrant and Zynga Inc., as amended by Amendment No. 1 to Developer Addendum, dated October 1, 2011.

10.13†   

Developer Addendum No. 2, dated December 26, 2010, between Registrant and Zynga Inc.

10.14*   

Credit Agreement, dated February 18, 2011, between Registrant, the Lenders party thereto, and JPMorgan Chase Bank, N.A., as amended by the First Amendment, dated June 28, 2011, and the Second Amendment, dated September 13, 2011.


Exhibit

Number

  

Description

10.15*   

Guarantee Agreement, dated February 18, 2011, between Registrant, the Subsidiary Guarantors party thereto, and JPMorgan Chase Bank, N.A.

10.16   

Conversion Agreement, dated February 19, 2010, between Registrant, Digital Sky Technologies Limited, and DST Global Limited.

21.1   

List of Subsidiaries of Registrant.

23.1#   

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.

23.2*   

Consent of Fenwick & West LLP (included in Exhibit 5.1).

24.1#   

Power of Attorney.

 

#  

Previously filed.

*  

To be filed by amendment.

 

Registrant has omitted portions of the referenced exhibit pursuant to a request for confidential treatment under Rule 406 promulgated under the Securities Act.

EXHIBIT 3.1

ELEVENTH AMENDED AND RESTATED

CERTIFICATE OF INCORPORATION

OF

FACEBOOK, INC.

The undersigned, Mark Zuckerberg, hereby certifies that:

1. He is the duly elected President and Chief Executive Officer of Facebook, Inc., a Delaware corporation.

2. The Certificate of Incorporation of this corporation was originally filed with the Secretary of State of Delaware on July 29, 2004 under the original name of TheFacebook, Inc.

3. The Certificate of Incorporation of this corporation shall be amended and restated to read in full as follows:

ARTICLE I

The name of the corporation is Facebook, Inc. (the “ Corporation ”).

ARTICLE II

The address of the Corporation’s registered office in the State of Delaware is 2711 Centerville Road, Suite 400, Wilmington, County of New Castle, 19808. The name of its registered agent at such address is Corporation Service Company.

ARTICLE III

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the Delaware General Corporation Law.

ARTICLE IV

(A) Common Stock and Preferred Stock.

1. Classes of Stock . The Corporation is authorized to issue three classes of stock to be designated, respectively, “ Class A Common Stock ,” “ Class B Common Stock ” and “ Preferred Stock .” The total number of shares which the Corporation is authorized to issue is 8,851,001,400 shares, each with a par value of $0.000006 per share. 4,141,000,000 shares shall be Class A Common Stock, 4,141,000,000 shares shall be Class B Common Stock and 569,001,400 shares shall be Preferred Stock.

2. 5-for-1 Stock Split. Immediately upon the filing of this Eleventh Amended and Restated Certificate of Incorporation (this “ Restated Certificate ”) with the Secretary of State of the State of Delaware (the “ Effective Time ”), each share of the Corporation’s Class A Common Stock, Class B Common Stock and Preferred Stock outstanding


immediately prior to the filing of this Restated Certificate shall be reclassified as five (5) shares of Class A Common Stock, Class B Common Stock or Preferred Stock, respectively (the “ Stock Split ”). No further adjustment of any Conversion Price, preference, price or right set forth in this Article Fourth shall be made as a result of the Stock Split, as all share amounts, amounts per share and per share numbers set forth in this Restated Certificate have been appropriately adjusted to reflect the Stock Split.

(B) Rights, Preferences and Restrictions of Preferred Stock . The Preferred Stock authorized by this Restated Certificate shall be divided into series as provided herein. The first series of Preferred Stock shall be designated “ Series A Preferred Stock ” and shall consist of 134,747,360 shares. The second series of Preferred Stock shall be designated “ Series B Preferred Stock ” and shall consist of 226,032,000 shares. The third series of Preferred Stock shall be designated “ Series C Preferred Stock ” and shall consist of 95,768,000 shares. The fourth series of Preferred Stock shall be designated “ Series D Preferred Stock ” and shall consist of 67,454,040 shares. The fifth series of Preferred Stock shall be designated “ Series E Preferred Stock ” and shall consist of 45,000,000 shares. The rights, preferences, privileges, and restrictions granted to and imposed on the Preferred Stock are as set forth below in this Article IV(B).

1. Dividend Provisions . The holders of shares of Preferred Stock shall be entitled to receive dividends, out of any assets legally available therefor, prior and in preference to any declaration or payment of any dividend (payable other than in Class A Common Stock, Class B Common Stock or other securities and rights convertible into or entitling the holder thereof to receive, directly or indirectly, additional shares of Class A Common Stock or Class B Common Stock of the Corporation, provided that an adjustment to the respective Conversion Price (as defined below) of such other securities or rights has been made in accordance with Section 4(d)(ii) below) on the Class A Common Stock or Class B Common Stock of the Corporation, at the rate of (a) $0.00036875 per share (as adjusted for stock splits, stock dividends, reclassification and the like) per annum on each outstanding share of Series A Preferred Stock, (b) $0.00456 per share (as adjusted for stock splits, stock dividends, reclassification and the like) per annum on each outstanding share of Series B Preferred Stock, (c) $0.02297335 per share (as adjusted for stock splits, stock dividends, reclassification and the like) per annum on each outstanding share of Series C Preferred Stock, (d) $0.593 per share (as adjusted for stock splits, stock dividends, reclassification and the like) per annum on each outstanding share of Series D Preferred Stock and (e) $0.3633264 per share (as adjusted for stock splits, stock dividends, reclassification and the like) per annum on each outstanding share of Series E Preferred Stock, payable quarterly when, as and if declared by the Board of Directors of the Corporation (the “ Board of Directors ”). Such dividends shall not be cumulative. After payment of such dividends, any additional dividends shall be distributed among the holders of Preferred Stock, Class A Common Stock and Class B Common Stock pro rata based on the number of shares of Class A Common Stock and Class B Common Stock then held by each holder (assuming conversion of all such Preferred Stock into Class B Common Stock).

2. Liquidation .

(a) Preference . In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Preferred Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the

 

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Corporation to the holders of Class A Common Stock or Class B Common Stock by reason of their ownership thereof, an amount per share equal to (i) $0.004605 per share (as adjusted for stock splits, stock dividends, reclassification and the like) for each share of Series A Preferred Stock then held by them, (ii) $0.0570025 per share (as adjusted for stock splits, stock dividends, reclassification and the like) for each share of Series B Preferred Stock then held by them, (iii) $0.2871668 per share (as adjusted for stock splits, stock dividends, reclassification and the like) for each share of Series C Preferred Stock then held by them, (iv) $7.412454 per share (as adjusted for stock splits, stock dividends, reclassification and the like) for each share of Series D Preferred Stock then held by them, and (v) $4.54158 per share (as adjusted for stock splits, stock dividends, reclassification and the like) for each share of Series E Preferred Stock then held by them, plus declared but unpaid dividends (each such amount being the “ Applicable Liquidation Amount ”). If, upon the occurrence of such event, the assets and funds thus distributed among the holders of the Preferred Stock shall be insufficient to permit the payment to such holders of the full aforesaid preferential amounts, then the entire assets and funds of the Corporation legally available for distribution shall be distributed ratably among the holders of the Preferred Stock in proportion to the preferential amount each such holder is otherwise entitled to receive.

(b) Remaining Assets . Upon the completion of the distribution required by Section 2(a) above, if assets remain in the Corporation, all of the remaining assets of the Corporation shall be distributed among the holders of the Class A Common Stock and Class B Common Stock pro rata based on the number of shares of Class A Common Stock and Class B Common Stock then held by them.

(c) Notwithstanding paragraphs (a) and (b) above, upon a liquidation, dissolution, or winding up of the Company, the holders of Preferred Stock shall receive at the closing (or upon the occurrence of such event if no closing is scheduled to occur) (and at each date after such closing (or such occurrence, if applicable) on which additional amounts (such as earnout payments, escrow amounts or other contingent payments) are paid to stockholders of the Company as a result of the event) in cash, securities or other property (valued as provided in Section 2(d)(ii)) below) an amount with respect to each series of Preferred Stock that, when added to all other amounts previously paid under this paragraph (c), is equal to the greater of: (1) the Applicable Liquidation Amount, and (2) the amount that the holders of such series of Preferred Stock would have been entitled to receive had they converted their shares of Preferred Stock into Class B Common Stock immediately prior to such event at the then effective Conversion Price for each such series (as defined below).

(d) Certain Acquisitions .

(i) Deemed Liquidation . For purposes of this Section 2, a liquidation, dissolution, or winding up of the Corporation, whether voluntary or involuntary, shall be deemed to occur if the Corporation shall either (1) sell, lease, convey, or otherwise dispose of all or substantially all of its assets or business or (2) (A) merge with or into or consolidate with any other corporation, limited liability company or other entity (other than a wholly-owned subsidiary of the Corporation) or (B) effect any transaction or series of related transactions in which the stockholders of the Corporation immediately prior to such transaction or series of related transactions (and prior to any acquisition of shares of stock of the Corporation effected in connection with such transaction or series of related transactions), own in the case of

 

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either subclauses (A) or (B) less than 50% of the Corporation’s voting power (or the voting power of the surviving entity in such transaction or series of related transactions) immediately after such transaction or series of related transactions (any such transaction, a “ Liquidation Transaction ”), provided that none of the following shall be considered a Liquidation Transaction: (i) a merger effected exclusively for the purpose of changing the domicile of the Corporation or (ii) an equity financing in which the Corporation is the surviving corporation.

(ii) Valuation of Consideration . In the event of a deemed liquidation as described in Section 2(d)(i) above, if the consideration received by the Corporation is other than cash, its value will be deemed its fair market value. Any securities shall be valued as follows:

(A) Securities not subject to investment letter or other similar restrictions on free marketability:

(1) If traded on a national securities exchange, then the value of the securities shall be deemed to be the average of the closing prices of the securities on such exchange or system over the ten (10) trading day period ending five (5) trading days prior to the deemed liquidation;

(2) If actively traded over-the-counter, then the value of the securities shall be deemed to be the average of the closing bid prices of the securities over the ten (10) trading day period ending five (5) trading days prior to the deemed liquidation; and

(3) If there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Board of Directors.

(B) The method of valuation of securities subject to investment letter or other restrictions on free marketability (other than restrictions arising solely by virtue of a stockholder’s status as an affiliate or former affiliate) shall be to make an appropriate discount from the market value determined as specified above in Section 2(d)(ii)(A) to reflect the approximate fair market value thereof, as determined in good faith by the Board of Directors.

For purposes of this Section 2(d)(ii), “ trading day ” shall mean any day which the exchange or system on which the securities to be distributed are traded is open and “ closing prices ” or “ closing bid prices ” shall be deemed to be: (i) for securities traded primarily on the New York Stock Exchange, the American Stock Exchange or The Nasdaq Stock Market, the last reported trade price or sale price, as the case may be, at 4:00 p.m., New York time, on that day and (ii) for securities listed or traded on other exchanges, markets and systems, the market price as of the end of the regular hours trading period that is generally accepted as such for such exchange, market or system. If, after the date hereof, the benchmark times generally accepted in the securities industry for determining the market price of a stock as of a given trading day shall change from those set forth above, the fair market value shall be determined as of such other generally accepted benchmark times.

 

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(iii) Notice of Liquidation Transaction . The Corporation shall give each holder of record of Preferred Stock written notice of any impending Liquidation Transaction not later than 10 days prior to the stockholders’ meeting called to approve such Liquidation Transaction, or 10 days prior to the closing of such Liquidation Transaction, whichever is earlier, and shall also notify such holders in writing of the final approval of such Liquidation Transaction. The first of such notices shall describe the material terms and conditions of the impending Liquidation Transaction and the provisions of this Section 2, and the Corporation shall thereafter give such holders prompt notice of any material changes. Unless such notice requirements are waived, the Liquidation Transaction shall not take place sooner than 10 days after the Corporation has given the first notice provided for herein or sooner than 10 days after the Corporation has given notice of any material changes provided for herein. Notwithstanding the other provisions of this Restated Certificate, all notice periods or requirements in this Restated Certificate may be shortened or waived, either before or after the action for which notice is required, upon the written consent of the holders of a majority of the voting power of the outstanding shares of Preferred Stock that are entitled to such notice rights.

(iv) Effect of Noncompliance . In the event the requirements of this Section 2(d) are not complied with, the Corporation shall forthwith either cause the closing of the Liquidation Transaction to be postponed until the requirements of this Section 2 have been complied with, or cancel such Liquidation Transaction, in which event the rights, preferences, privileges and restrictions of the holders of Preferred Stock shall revert to and be the same as such rights, preferences, privileges and restrictions existing immediately prior to the date of the first notice referred to in Section 2(d)(iii).

3. Redemption . The Preferred Stock is not redeemable.

4. Conversion . The holders of the Preferred Stock shall have conversion rights as follows (the “ Conversion Rights ”):

(a) Right to Convert . Subject to Section 4(c), each share of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock shall be convertible, at the option of the holder thereof, at any time after the date of issuance of such share, at the office of the Corporation or any transfer agent for such stock, into such number of fully paid and nonassessable shares of Class B Common Stock as is determined by dividing (i) $0.004605 in the case of the Series A Preferred Stock (as adjusted for stock splits, stock dividends, reclassification and the like), (ii) $0.0570025 in the case of the Series B Preferred Stock (as adjusted for stock splits, stock dividends, reclassification and the like), (iii) $0.2871668 in the case of the Series C Preferred Stock (as adjusted for stock splits, stock dividends, reclassification and the like), (iv) $7.412454 in the case of the Series D Preferred Stock (as adjusted for stock splits, stock dividends, reclassification and the like) and (v) $4.54158 in the case of the Series E Preferred Stock (as adjusted for stock splits, stock dividends, reclassification and the like) by the Conversion Price applicable to such share, determined as hereafter provided, in effect on the date the certificate is surrendered for conversion. The Conversion Price per share as of the Effective Time shall be $0.004605 for shares of Series A Preferred Stock, $0.056724 for shares of Series B Preferred Stock, $0.285764 for shares of Series C Preferred Stock, $7.320504 for shares of Series D Preferred Stock and $4.54158 for shares of Series E Preferred Stock. Such Conversion Price shall hereafter be subject to adjustment as set forth in Section 4(d) below.

 

 

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(b) Automatic Conversion . Each share of Preferred Stock shall automatically be converted into fully-paid, non-assessable shares of Class B Common Stock at the applicable Conversion Price at the time in effect for such share immediately upon the earlier of (i) except as provided below in Section 4(c), the Corporation’s sale of its Class A Common Stock and/or Class B Common Stock in a firm commitment underwritten public offering pursuant to a registration statement under the Securities Act of 1933, as amended (the “ Securities Act ”), the public offering price of which results in aggregate cash proceeds to the Corporation of not less than $100,000,000 (net of underwriting discounts and commissions) or (ii) the date specified by written consent or agreement of the holders of a majority of the then outstanding shares of Preferred Stock, voting together as a single class on an as-converted basis; provided however, that in the event of an automatic conversion pursuant to clause (ii) of this Section 4(b) in which either (A) the holders of a majority of the then outstanding shares of Series D Preferred Stock do not consent or agree or (B) the holders of a majority of the then outstanding shares of Series E Preferred Stock do not consent or agree, then in such case the conversion shall not be effective as to any shares of Preferred Stock until 180 days after the date of the written consent of the majority of the outstanding shares of Preferred Stock.

(c) Mechanics of Conversion . Before any holder of shares of any series of Preferred Stock shall be entitled to convert such shares into shares of Class B Common Stock, the holder shall surrender the certificate or certificates therefor, duly endorsed, at the office of the Corporation or of any transfer agent for such series of Preferred Stock, and shall give written notice to the Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Class B Common Stock are to be issued, as applicable. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Preferred Stock, or to the nominee or nominees of such holder, a certificate or certificates for the number of shares of Class B Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior to the close of business on the date of such surrender of the shares of such series of Preferred Stock to be converted, and the person or persons entitled to receive the shares of Class B Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Class B Common Stock as of such date. If the conversion is in connection with an underwritten public offering of securities registered pursuant to the Securities Act the conversion may, at the option of any holder tendering such shares of Preferred Stock for conversion, be conditioned upon the closing with the underwriters of the sale of securities pursuant to such offering, in which event any persons entitled to receive Class B Common Stock upon conversion of such Preferred Stock shall not be deemed to have converted such Preferred Stock until immediately prior to the closing of such sale of securities.

 

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(d) Conversion Price Adjustments of Preferred Stock for Certain Dilutive Issuances, Splits and Combinations . The Conversion Price of each series of Preferred Stock shall be subject to adjustment from time to time as follows:

(i) Issuance of Additional Stock below Purchase Price . If the Corporation should issue after the Effective Time any Additional Stock (as defined below) without consideration or for a consideration per share less than the Conversion Price of a series of Preferred Stock in effect immediately prior to the issuance of such Additional Stock, the Conversion Price for such series in effect immediately prior to each such issuance shall automatically be adjusted as set forth in this Section 4(d)(i), unless otherwise provided in this Section 4(d)(i).

(A) Adjustment Formula . Whenever the Conversion Price of any series of Preferred Stock is adjusted pursuant to this Section 4(d)(i), the new Conversion Price for such series shall be determined by multiplying the Conversion Price then in effect by a fraction, (x) the numerator of which shall be the number of shares of Class A Common Stock and Class B Common Stock outstanding immediately prior to such issuance (the “ Outstanding Common ”) plus a number of shares equal to the aggregate consideration received by the Corporation for such issuance divided by the Conversion Price of such series of Preferred Stock then in effect; and (y) the denominator of which shall be the number of shares of Outstanding Common plus the number of shares of such Additional Stock. For purposes of the foregoing calculation, the term “Outstanding Common” shall include shares of Common Stock deemed issued pursuant to Section 4(d)(i)(E) below.

(B) Definition of “Additional Stock” . For purposes of this Section 4(d)(i), “ Additional Stock ” shall mean any shares of Class A Common Stock or Class B Common Stock issued (or deemed to have been issued pursuant to Section 4(d)(i)(E)) by the Corporation after the Effective Time other than (the following collectively, “ Exempted Securities ”):

(1) Shares of Class A Common Stock or Class B Common Stock issued pursuant to stock dividends, stock splits or similar transactions, as described in Section 4(d)(ii) hereof;

(2) Shares of Class A Common Stock or Class B Common Stock (plus, in the case of Class B Common Stock, any shares of Class A Common Stock directly issuable upon conversion of such shares of Class B Common Stock) issued or issuable to employees, consultants or directors of the Corporation approved by the Board of Directors of the Corporation (or the Compensation Committee thereof) directly or pursuant to a stock option plan or restricted stock units or restricted stock plan or agreement;

(3) Capital stock, or options or warrants to purchase capital stock, issued to financial institutions, real estate brokers or lessors in connection with commercial credit arrangements, equipment financings, commercial property lease transactions or similar transactions; provided that such transactions are not conducted principally for equity financing purposes, and are approved by the Board of Directors, including the director elected by the holders of Series B Preferred Stock;

(4) Shares of Class A Common Stock, Class B Common Stock or Preferred Stock (and any shares of capital stock into which such shares are convertible) issuable upon exercise of warrants, options or other rights to acquire securities of the Corporation outstanding as of the Effective Time and any securities issuable upon the conversion thereof;

 

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(5) Capital stock, or warrants or options to purchase capital stock, issued in connection with bona fide acquisitions, mergers or similar transactions, the terms of which are approved by the Board of Directors of the Corporation, including the director elected by the holders of Series B Preferred Stock;

(6) Shares of Class B Common Stock actually issued upon conversion of the Preferred Stock;

(7) Shares of Class A Common Stock or Class B Common Stock issued or issuable in a public offering prior to or in connection with which all outstanding shares of Preferred Stock will be converted into shares of Class B Common Stock;

(8) Capital stock issued or issuable to an entity as a component of any business relationship with such entity for the purpose of (A) joint venture, technology licensing or development activities, (B) distribution, supply or manufacture of the Corporation’s products or services or (C) any other arrangements involving corporate partners that are primarily for purposes other than raising capital, the terms of which business relationship with such entity and the issuance of such capital stock to such entity are approved by the Board of Directors, including the director elected by the holders of Series B Preferred Stock;

(9) Shares of Class A Common Stock or Class B Common Stock issued or issuable with the affirmative vote of at least a majority of the then outstanding shares of Preferred Stock, voting together as a single class on an as-converted basis;

(10) Shares of Class A Common Stock issuable upon conversion of Class B Common Stock for which an adjustment has already been made pursuant to this Section 4(d); and

(11) Shares of Class A Common Stock issued or issuable upon conversion of Class B Common Stock.

(C) No Fractional Adjustments . No adjustment of the Conversion Price for any series of Preferred Stock shall be made in an amount less than one cent per share, provided that any adjustments which are not required to be made by reason of this sentence shall be carried forward and shall be either taken into account in any subsequent adjustment made prior to three years from the date of the event giving rise to the adjustment being carried forward, or shall be made at the end of three years from the date of the event giving rise to the adjustment being carried forward.

(D) Determination of Consideration . In the case of the issuance of Class A Common Stock or Class B Common Stock for cash, the consideration shall be deemed to be the amount of cash paid therefor before deducting any reasonable discounts, commissions or other expenses allowed, paid or incurred by the Corporation for any underwriting or otherwise in connection with the issuance and sale thereof. In the case of the issuance of Class A Common Stock or Class B Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair value thereof as determined by the Board of Directors irrespective of any accounting treatment.

 

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(E) Deemed Issuances of Common Stock . In the case of the issuance (whether before, on or after the Effective Time) of securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Class A Common Stock or Class B Common Stock (the “ Common Stock Equivalents ”), the following provisions shall apply for all purposes of this Section 4(d)(i):

(1) The aggregate maximum number of shares of Class A Common Stock or Class B Common Stock, as applicable, deliverable upon conversion, exchange or exercise (assuming the satisfaction of any conditions to convertibility, exchangeability or exercisability, including, without limitation, the passage of time, but without taking into account potential antidilution adjustments) of any Common Stock Equivalents and subsequent conversion, exchange or exercise thereof shall be deemed to have been issued at the time such securities were issued or such Common Stock Equivalents were issued and for a consideration equal to the consideration, if any, received by the Corporation for any such securities and related Common Stock Equivalents (excluding any cash received on account of accrued interest or accrued dividends), plus the minimum additional consideration, if any, to be received by the Corporation (without taking into account potential antidilution adjustments) upon the conversion, exchange or exercise of any Common Stock Equivalents (the consideration in each case to be determined in the manner provided in Section 4(d)(i)(D)).

(2) In the event of any change in the number of shares of Class A Common Stock or Class B Common Stock deliverable or in the consideration payable to the Corporation upon conversion, exchange or exercise of any Common Stock Equivalents, other than a change resulting from the antidilution provisions thereof, the Conversion Price of each series of Preferred Stock, to the extent in any way affected by or computed using such Common Stock Equivalents, shall be recomputed to reflect such change, but no further adjustment shall be made for the actual issuance of Class A Common Stock or Class B Common Stock or any payment of such consideration upon the conversion, exchange or exercise of such Common Stock Equivalents.

(3) Upon the termination or expiration of the convertibility, exchangeability or exercisability of any Common Stock Equivalents, the Conversion Price of any series of Preferred Stock, to the extent in any way affected by or computed using such Common Stock Equivalents, shall be recomputed to reflect the issuance of only the number of shares of Class A Common Stock or Class B Common Stock (and Common Stock Equivalents that remain convertible, exchangeable or exercisable) actually issued upon the conversion, exchange or exercise of such Common Stock Equivalents.

(4) The number of shares of Class A Common Stock or Class B Common Stock deemed issued and the consideration deemed paid therefor pursuant to Section 4(d)(i)(E)(1) shall be appropriately adjusted to reflect any change, termination or expiration of the type described in either Section 4(d)(i)(E)(2) or 4(d)(i)(E)(3).

 

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(F) No Increased Conversion Price . Notwithstanding any other provisions of this Section (4)(d)(i), except to the limited extent provided for in Sections 4(d)(i)(E)(2) and 4(d)(i)(E)(3), no adjustment of the Conversion Price of any series of Preferred Stock pursuant to this Section 4(d)(i) shall have the effect of increasing the Conversion Price of such series above the Conversion Price of such series in effect immediately prior to such adjustment.

(ii) Stock Splits and Dividends . In the event the Corporation should at any time after the Effective Time fix a record date for (A) the effectuation of a split or subdivision of the outstanding shares of Class A Common Stock and Class B Common Stock or (B) the determination of holders of Class A Common Stock and Class B Common Stock entitled to receive a dividend or other distribution payable in additional shares of Class A Common Stock and Class B Common Stock or Common Stock Equivalents without payment of any consideration by such holder for the additional shares of Class A Common Stock and Class B Common Stock or the Common Stock Equivalents (including the additional shares of Class A Common Stock or Class B Common Stock issuable upon conversion or exercise thereof), then, as of such record date (or the date of such dividend distribution, split or subdivision if no record date is fixed), the applicable Conversion Price of each series of the Preferred Stock shall be appropriately decreased so that the number of shares of Class B Common Stock issuable on conversion of each share of such series shall be increased in proportion to such increase of the aggregate of shares of Class A Common Stock and Class B Common Stock outstanding and those issuable with respect to such Common Stock Equivalents with the number of shares issuable with respect to Common Stock Equivalents determined from time to time in the manner provided for deemed issuances in Section 4(d)(i)(E).

(iii) Reverse Stock Splits . If the number of shares of Class A Common Stock and Class B Common Stock outstanding at any time after the Effective Time is decreased by a combination of the outstanding shares of Class A Common Stock and Class B Common Stock, then, following the record date of such combination, the Conversion Price of each series of Preferred Stock shall be appropriately increased so that the number of shares of Class B Common Stock issuable on conversion of each share of such series shall be decreased in proportion to such decrease of the aggregate of shares of Class A Common Stock and Class B Common Stock outstanding and those issuable with respect to such Common Stock Equivalents with the number of shares issuable with respect to Common Stock Equivalents determined from time to time in the manner provided for deemed issuances in Section 4(d)(i)(E).

(e) Other Distributions . In the event the Corporation shall declare a distribution payable in securities of other persons, evidences of indebtedness issued by the Corporation or other persons, assets (excluding cash dividends) or options or rights not referred to in Section 4(d)(i) or 4(d)(ii), then, in each such case for the purpose of this Section 4(e), the holders of Preferred Stock shall be entitled to a proportionate share of any such distribution as though they were the holders of the number of shares of Class B Common Stock of the Corporation into which their shares of Preferred Stock are convertible as of the record date fixed for the determination of the holders of Class B Common Stock of the Corporation entitled to receive such distribution.

 

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(f) Recapitalizations . If at any time or from time to time there shall be a recapitalization of the Class B Common Stock (other than a subdivision, combination or merger or sale of assets transaction provided for elsewhere in this Section 4 or in Section 2) provision shall be made so that the holders of each series of Preferred Stock shall thereafter be entitled to receive upon conversion of such Preferred Stock the number of shares of stock or other securities or property of the Corporation or otherwise, to which a holder of Class B Common Stock deliverable upon conversion would have been entitled on such recapitalization. In any such case, appropriate adjustment shall be made in the application of the provisions of this Section 4 with respect to the rights of the holders of such Preferred Stock after the recapitalization to the end that the provisions of this Section 4 (including adjustment of the Conversion Price then in effect for such series of Preferred Stock and the number of shares purchasable upon conversion of such Preferred Stock) shall be applicable after that event and be as nearly equivalent as practicable.

(g) No Fractional Shares and Certificate as to Adjustments .

(i) No fractional shares shall be issued upon the conversion of any share or shares of the Preferred Stock, and the number of shares of Class B Common Stock to be issued shall be rounded down to the nearest whole share. The number of shares issuable upon such conversion shall be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Class B Common Stock and the number of shares of Class B Common Stock issuable upon such aggregate conversion. If the conversion would result in any fractional share, the Corporation shall, in lieu of issuing any such fractional share, pay the holder thereof an amount in cash equal to the fair market value of such fractional share on the date of conversion, as determined in good faith by the Board of Directors.

(ii) Upon the occurrence of each adjustment or readjustment of the applicable Conversion Price of each series of Preferred Stock pursuant to this Section 4, the Corporation, at its expense, shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to each holder of such Preferred Stock a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. The Corporation shall, upon the written request at any time of any holder of Preferred Stock, furnish or cause to be furnished to such holder a like certificate setting forth (A) such adjustment and readjustment, (B) the applicable Conversion Price for such series of Preferred Stock at the time in effect, and (C) the number of shares of Class B Common Stock and the amount, if any, of other property which at the time would be received upon the conversion of a share of such series of Preferred Stock.

(h) Notices of Record Date . In the event of any taking by the Corporation of a record of the holders of any class of securities for the purpose of determining the holders thereof who are entitled to receive any dividend (other than a cash dividend) or other distribution, any right to subscribe for, purchase or otherwise acquire any shares of stock of any class or any other securities or property, or to receive any other right, the Corporation shall mail to each holder of Preferred Stock, at least 10 days prior to the date specified therein, a notice specifying the date on which any such record is to be taken for the purpose of such dividend, distribution or right, and the amount and character of such dividend, distribution or right.

 

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(i) Reservation of Stock Issuable Upon Conversion . The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class B Common Stock, solely for the purpose of effecting the conversion of the shares of Preferred Stock, such number of shares of its Class B Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Preferred Stock; and if at any time the number of authorized but unissued shares of Class B Common Stock shall not be sufficient to effect the conversion of all then outstanding shares of Preferred Stock, in addition to such other remedies as shall be available to the holder of such shares of Preferred Stock, the Corporation will take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Class B Common Stock to such number of shares as shall be sufficient for such purposes, including, without limitation, engaging in best efforts to obtain the requisite stockholder approval of any necessary amendment to this Restated Certificate.

(j) Notices . Any notice required by the provisions of this Section 4 to be given to the holders of shares of Preferred Stock shall be deemed given if deposited in the United States mail, postage prepaid, and addressed to each holder of record at his address appearing on the books of the Corporation.

(k) No Impairment . The Corporation will not, except with the approval required by Section 6 hereof and applicable law, by amendment of its Certificate of Incorporation or through any reorganization, recapitalization, transfer of assets, merger, consolidation, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed hereunder by the Corporation but will at all times in good faith assist in the carrying out of all the provisions of this Section 4 and in the taking of all such actions as may be necessary or appropriate in order to protect the Conversion Rights of the holders of the Preferred Stock against impairment.

5. Voting Rights .

(a) Generally . Except as expressly provided by this Restated Certificate or as provided by law, the holders of Series A, Series B, Series C, Series D and Series E Preferred Stock shall have the right to ten (10) votes for each share of Class B Common Stock into which such Series A, Series B, Series C, Series D and Series E Preferred Stock could then be converted, and with respect to such vote, such holder shall have full voting rights and powers equivalent to those of the holders of Class B Common Stock. In addition, such holder shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation, and, except as expressly provided by this Restated Certificate or as provided by law, shall be entitled to vote together with holders of Class A Common Stock and Class B Common Stock (all voting together as a single class) on all matters upon which holders of Class A Common Stock and Class B Common Stock have the right to vote. Fractional votes shall not, however, be permitted and any fractional voting rights available on an as-converted basis (after aggregating all shares into which shares of Preferred Stock held by each holder could be converted) shall be rounded to the nearest whole number (with one-half being rounded upward).

 

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(b) Directors .

(i) Election by Class . The directors shall be elected as follows:

(A) For so long as a minimum of 45,280,000 shares (as adjusted for stock splits, stock dividends, reclassification and the like) of Series B Preferred Stock are outstanding, one (1) director (the “ Series B Director ”) shall be elected by the holders of a majority of all of the outstanding shares of Series B Preferred Stock voting as a separate series.

(B) For so long as a minimum of 26,949,440 shares (as adjusted for stock splits, stock dividends, reclassification and the like) of Series A Preferred Stock are outstanding, one (1) director (the “ Series A Director ”) shall be elected by the holders of a majority of all of the outstanding shares of Series A Preferred Stock voting as a separate series.

(C) Three (3) directors (each a “ Common Director ” and collectively the “ Common Directors ”) shall be elected by the holders of a majority of the voting power of the outstanding shares of Class A Common Stock and Class B Common Stock, voting as a single class.

(D) Any remaining directors (each, an “ At-Large Director ” and collectively, the “ At-Large Directors ”) shall be elected by the holders of a majority of the voting power of the outstanding shares of Class A Common Stock, Class B Common Stock and Preferred Stock (on an as-converted to Class B Common Stock basis), voting as a single class.

(ii) Removal of Directors, Reduction of Number of Directors .

(A) If at any time there are fewer than 45,280,000 shares (as adjusted for stock splits, stock dividends, reclassification and the like) of Series B Preferred Stock outstanding (i) the right of the holders of the shares of Series B Preferred Stock to elect the Series B Director will terminate, (ii) a voting shift shall be effected, the Series B Director shall cease to be qualified and the term of office of the Series B Director will automatically terminate, and (iii) the authorized number of directors shall be reduced by one. In addition, the Series B Director may be removed by vote or written consent of a majority of the shares of Series B Preferred Stock then outstanding, voting as a separate series.

(B) If at any time there are fewer than 26,949,440 shares (as adjusted for stock splits, stock dividends, reclassification and the like) of Series A Preferred Stock outstanding (i) the right of the holders of the shares of Series A Preferred Stock to elect the Series A Director will terminate, (ii) a voting shift shall be effected, the Series A Director shall cease to be qualified and the term of office of the Series A Director will automatically terminate, and (iii) the authorized number of directors shall be reduced by one. In addition, the Series A Director may be removed by vote or written consent of a majority of the shares of Series A Preferred Stock then outstanding, voting as a separate series.

 

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(C) The Common Directors may be removed by vote or written consent of the holders of a majority of the voting power of the shares of Class A Common Stock and Class B Common Stock then outstanding, voting as a single class.

(D) The At-Large Directors may be removed by vote or written consent of the holders of a majority of the voting power of the shares of Class A Common Stock, Class B Common Stock and Preferred Stock (on an as-converted to Class B Common Stock basis) then outstanding, voting as a single class.

The foregoing provisions set forth in this Section 5(b)(ii) are subject to any limitations imposed by statute or applicable law.

(iii) Vacancies .

(A) In the event of a vacancy on the Board of Directors created by the resignation, death or removal of the Series B Director, such vacancy shall be filled exclusively: (i) by the Corporation’s Board of Directors upon receipt by the Board of Directors of, and in accordance with, written consents specifying the new director to fill such vacancy and signed by the holders of a majority of the shares of the Series B Preferred Stock then outstanding, voting as a separate series, or (ii) by vote or written consent of the holders of a majority of the Series B Preferred Stock then outstanding, voting as a separate series.

(B) In the event of a vacancy on the Board of Directors created by the resignation, death or removal of the Series A Director, such vacancy shall be filled exclusively: (i) by the Corporation’s Board of Directors upon receipt by the Board of Directors of, and in accordance with, written consents specifying the new director to fill such vacancy and signed by the holders of a majority of the shares of the Series A Preferred Stock then outstanding, voting as a separate series, or (ii) by vote or written consent of the holders of a majority of the Series A Preferred Stock then outstanding, voting as a separate series.

(C) In the event of a vacancy on the Board of Directors created by the resignation, death or removal of a Common Director, such vacancy shall be filled exclusively: (i) by the Corporation’s Board of Directors, or (ii) by vote or written consent of the holders of a majority of the voting power of the Class A Common Stock and Class B Common Stock then outstanding, voting together as a single class.

(D) In the event of a vacancy on the Board of Directors created by the resignation, death or removal of an At-Large Director, such vacancy shall be filled exclusively: (i) by the Corporation’s Board of Directors, or (ii) by vote or written consent of the holders of a majority of the voting power of the Class A Common Stock, Class B Common Stock and Preferred Stock (on an as-converted to Class B Common Stock basis) then outstanding, voting together as a single class.

 

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6. Protective Provisions . So long as at least 92,500,000 shares of Preferred Stock are outstanding (as adjusted for stock splits, stock dividends, reclassification and the like), the Corporation shall not (by amendment, merger, consolidation or otherwise) without first obtaining the approval (by vote or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Preferred Stock, voting together as a class on an as-converted basis:

(a) effect a Liquidation Transaction;

(b) alter or change the rights, preferences or privileges of the shares of a series of Preferred Stock so as to materially and adversely affect the shares of such series in a manner that does not similarly affect all series of Preferred Stock;

(c) increase or decrease (other than by conversion) the total number of authorized shares of the Preferred Stock;

(d) authorize or issue, any other equity security, including any security (other than Series A, Series B, Series C, Series D or Series E Preferred Stock) convertible into or exercisable for any equity security, having a preference over, or being on a parity with, any series of Preferred Stock with respect to voting (other than the pari passu voting rights of Class A Common Stock or Class B Common Stock), dividends, redemption, conversion or upon liquidation;

(e) amend, waive, or repeal any provision of, or add any provision to, the Corporation’s Certificate of Incorporation, as amended, or Bylaws; or

(f) redeem, purchase or otherwise acquire (or pay into or set aside for a sinking fund for such purpose) any share or shares of Preferred Stock, Class A Common Stock or Class B Common Stock; provided , however , that this restriction shall not apply to the repurchase of shares of Class A Common Stock or Class B Common Stock from employees, officers, directors, consultants or other persons performing services for the Corporation or any subsidiary pursuant to agreements under which the Corporation has the option to repurchase such shares at no greater than cost upon the occurrence of certain events, such as the termination of employment, or through the exercise of any right of first refusal.

7. Status of Converted Stock . In the event any shares of Preferred Stock shall be converted pursuant to Section 4 hereof, the shares so converted shall be cancelled and shall not be issuable by the Corporation. This Restated Certificate shall be appropriately amended to effect the corresponding reduction in the Corporation’s authorized capital stock.

8. California General Corporation Law . To the extent that Sections 502, 503 or 506 of the California General Corporation Law apply to the Corporation, the holders of Preferred Stock expressly waive their rights, if any, as described in Sections 502, 503 and 506 of the California General Corporation Law as they might apply to the Corporation. Notwithstanding the foregoing, the Corporation does not make any admission or concede in any way that such sections of the California General Corporations Law currently or in the future may apply to the Corporation.

(C) Rights, Powers and Restrictions of Class A Common Stock .

The rights, powers and restrictions granted to and imposed on the Class A Common Stock are as set forth below in this Article IV.

 

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1. Dividend Rights . Subject to the prior rights of holders of all classes of stock at the time outstanding having prior rights as to dividends, the holders of the Class A Common Stock shall be entitled to receive, when and as declared by the Board of Directors, such dividends as may be declared from time to time by the Board of Directors with respect to the Class B Common Stock out of any assets of the Corporation legally available therefor, and no dividend shall be declared or paid on shares of the Class B Common Stock unless the same dividend with the same record date and payment date shall be declared or paid on the shares of Class A Common Stock; provided , however , that dividends payable in shares of Class B Common Stock or rights to acquire Class B Common Stock may be declared and paid to the holders of the Class B Common Stock without the same dividend being declared and paid to the holders of the Class A Common Stock if and only if a dividend payable in shares of Class A Common Stock or rights to acquire Class A Common Stock (as the case may be) at the same rate and with the same record date and payment date as the dividend declared and paid to the holders of the Class B Common Stock shall be declared and paid to the holders of Class A Common Stock.

2. Liquidation Rights . Upon the liquidation, dissolution or winding up of the Corporation or the occurrence of a Liquidation Transaction, the assets of the Corporation shall be distributed as provided in Section 2 of Article IV(B).

3. Redemption . The Class A Common Stock is not redeemable.

4. Voting Rights . Each holder of Class A Common Stock shall have the right to one (1) vote per share of Class A Common Stock, and shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation, and shall be entitled to vote upon such matters and in such manner as may be provided by law. Except as expressly provided by this Restated Certificate or as provided by law, the holders of shares of Class A Common Stock shall at all times vote together with the holders of Class B Common Stock as a single class on all matters (including the election of directors) submitted to vote or for the consent of the stockholders of the Corporation. The number of authorized shares of Class A Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of shares of stock of the Corporation representing a majority of the votes represented by all outstanding shares of stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the Delaware General Corporation Law.

5. Subdivisions or Combinations . If the Corporation in any manner subdivides or combines the outstanding shares of Class B Common Stock, then the outstanding shares of Class A Common Stock will be subdivided or combined in the same proportion and manner.

6. Equal Status . Except as expressly set forth in this Article IV, Class A Common Stock shall have the same rights and powers of, rank equally to, share ratably with and be identical in all respects and as to all matters to Class B Common Stock.

(D) Rights, Powers and Restrictions of Class B Common Stock .

 

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The rights, powers and restrictions granted to and imposed on the Class B Common Stock are as set forth below in this Article IV.

1. Dividend Rights . Subject to the prior rights of holders of all classes of stock at the time outstanding having prior rights as to dividends, the holders of the Class B Common Stock shall be entitled to receive, when and as declared by the Board of Directors, such dividends as may be declared from time to time by the Board of Directors with respect to the Class A Common Stock out of assets or funds of the Corporation legally available therefor, and no dividend shall be declared or paid on shares of the Class A Common Stock unless the same dividend with the same record date and payment date shall be declared or paid on the shares of Class B Common Stock; provided , however , that dividends payable in shares of Class A Common Stock or rights to acquire Class A Common Stock may be declared and paid to the holders of the Class A Common Stock without the same dividend being declared and paid to the holders of the Class B Common Stock if and only if a dividend payable in shares of Class B Common Stock or rights to acquire Class B Common Stock (as the case may be) at the same rate and with the same record date and payment date as the dividend declared and paid to the holders of the Class A Common Stock shall be declared and paid to the holders of Class B Common Stock.

2. Liquidation Rights . Upon the liquidation, dissolution or winding up of the Corporation or the occurrence of a Liquidation Transaction, the assets of the Corporation shall be distributed as provided in Section 2 of Article IV(B).

3. Redemption . The Class B Common Stock is not redeemable.

4. Voting Rights . Each holder of Class B Common Stock shall be entitled to ten (10) votes per share of Class B Common Stock, and shall be entitled to notice of any stockholders’ meeting in accordance with the Bylaws of the Corporation, and shall be entitled to vote upon such matters and in such manner as may be provided by law. Except as expressly provided by this Restated Certificate or as provided by law, the holders of shares of Class B Common Stock shall at all times vote together with the holders of Class A Common Stock as a single class on all matters (including the election of directors) submitted to vote or for the consent of the stockholders of the Corporation. The number of authorized shares of Class B Common Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders or shares of stock of the Corporation representing a majority of the votes represented by all outstanding shares of stock of the Corporation entitled to vote, irrespective of the provisions of Section 242(b)(2) of the Delaware General Corporation Law of the State of Delaware.

5. Conversion .

(a) Each share of Class B Common Stock shall be convertible into one (1) fully paid and nonassessable share of Class A Common Stock at the option of the holder thereof at any time upon written notice to the Corporation. Before any holder of Class B Common Stock shall be entitled to convert any shares of such Class B Common Stock, such holder shall surrender the certificate or certificates therefor, duly endorsed, at the principal corporate office of the Corporation or of any transfer agent for the Class B Common Stock, and

 

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shall give written notice to the Corporation at its principal corporate office, of the election to convert the same and shall state therein the name or names in which the certificate or certificates for shares of Class A Common Stock are to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at such office to such holder of Class B Common Stock, or to the nominee or nominees or such holder, a certificate or certificates for the number of shares of Class A Common Stock to which such holder shall be entitled as aforesaid. Such conversion shall be deemed to have been made immediately prior the close of business on the date of such surrender of the shares of Class B Common Stock to be converted, and the person or persons entitled to receive the shares of Class A Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Class A Common Stock as of such date. Each share of Class B Common Stock that is converted pursuant to this Section 5(a) shall be retired by the Corporation and shall not be available for reissuance.

(b) This Section (B)(5)(b) of Article IV shall become effective immediately prior to the closing of a firm commitment underwritten public offering pursuant to a registration statement under the Securities Act in which all outstanding shares of Preferred Stock convert (or will convert within 180 days thereafter) into Class B Common Stock, provided that the Class B Common Stock is then a “covered security” pursuant to Section 18 of the Securities Act (the “ Covered Security Date ”). On or after the Covered Security Date, each share of Class B Common Stock shall be automatically, without further action by the holder thereof, converted into one (1) fully paid and nonassessable share of Class A Common Stock, upon the occurrence of a Transfer (as defined in Section (E)(4) of this Article IV), other than a Permitted Transfer (as defined in Section (E)(5) of this Article IV), of such share of Class B Common Stock. Each outstanding stock certificate that, immediately prior to such Transfer, represented one or more shares of Class B Common Stock subject to such Transfer shall, upon and after such Transfer, be deemed to represent an equal number of shares of Class A Common Stock, without the need for surrender or exchange thereof. The Corporation shall, upon the request of each such holder and upon receipt of such holder’s outstanding certificate, issue and deliver to such holder new certificates representing such holder’s shares of Class A Common Stock. Each share of Class B Common Stock that is converted pursuant to this Section (B)(5)(b) of Article IV shall be retired by the Corporation and shall not be available for reissuance.

(c) The Corporation may, from time to time, establish such policies and procedures, not in violation of applicable law or the other provisions of this Restated Certificate, relating to the conversion of the Class B Common Stock into Class A Common Stock and the dual class common stock structure contemplated this Restated Certificate, including without limitation the issuance of stock certificates in connection with any such conversion, as it may deem necessary or advisable. If the Corporation has reason to believe that a Transfer giving rise to a conversion of shares of Class B Common Stock into Class A Common Stock has occurred but has not theretofore been reflected on the books of the Corporation, the Corporation may request that the holder of such shares furnish affidavits or other evidence to the Corporation as it reasonably deems necessary to determine whether a conversion of shares of Class B Common Stock to Class A Common Stock has occurred, and if such holder does not within ten (10) days after the date of such request furnish sufficient evidence to the Corporation (in the manner provided in the request) to enable the Corporation to determine that no such conversion has occurred, any such shares of Class B Common Stock, to the extent not previously converted, shall be automatically converted into shares of Class A Common Stock and the same shall

 

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thereupon be registered on the books and records of the Corporation. In connection with any action of stockholders taken at a meeting or by written consent, the stock ledger of the Corporation shall be presumptive evidence as to who are the stockholders entitled to vote in person or by proxy at any meeting of stockholders or in connection with any written consent and the classes of shares held by each such stockholder and the number of shares of each class held by such stockholder.

6. Subdivisions or Combinations . If the Corporation in any manner subdivides or combines the outstanding shares of Class A Common Stock, then the outstanding shares of Class B Common Stock will be subdivided or combined in the same proportion and manner.

7. Equal Status . Except as expressly set forth in this Article IV, Class B Common Stock shall have the same rights and powers of, rank equally to, share ratably with and be identical in all respects and as to all matters to Class A Common Stock.

8. Reservation of Stock . The Corporation shall at all times reserve and keep available out of its authorized but unissued shares of Class A Common Stock, solely for the purpose of effecting the conversion of the shares of Class B Common Stock, such number of shares of Class A Common Stock as shall from time to time be sufficient to effect the conversion of all outstanding shares of Class B Common Stock into shares of Class A Common Stock

9. Protective Provision . The Corporation shall not, by amendment, merger, consolidation or otherwise, without first obtaining the approval (by vote at a stockholders meeting or written consent, as provided by law) of the holders of at least a majority of the then outstanding shares of Class B Common Stock, voting as a separate class, amend, alter, repeal or waive Sections (B)(2)(b), (B)(2)(d), (C), (D) or (E) of this Article IV.

10. Liquidation Event . On or after the Covered Security Date, the Corporation shall not consummate a Change in Control Transaction (as defined below) without first obtaining the approval (by vote at a stockholders meeting or written consent, as provided by law), of the holders of at least a majority of the then outstanding shares of Class B Common Stock, voting as a separate class. For the purposes of this section, a “ Change in Control Transaction ” means the occurrence of any of the following events:

(a) the sale, encumbrance or disposition (other than licenses that do not constitute an effective disposition of all or substantially all of the assets of the Corporation and its subsidiaries taken as a whole, and the grant of security interests in the ordinary course of business) by the Corporation of all or substantially all of the Corporation’s assets; or

(b) the merger or consolidation of the Corporation with or into any other corporation or entity, other than a merger or consolidation that would result in the Class B Common Stock of the Corporation outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) more than fifty percent (50%) of the total voting power represented by the voting securities of the Corporation or such surviving entity or its sole parent entity outstanding immediately after such merger or consolidation.

 

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(E) Definitions . For purposes of this Article IV:

1. “ Family Member ” shall mean with respect to any natural person who is a Qualified Stockholder, the spouse, parents, grandparents, lineal descendents, siblings and lineal descendants of siblings of such Qualified Stockholder.

2. “ Qualified Stockholder ” shall mean (a) the registered holder of a share of Class B Common Stock immediately following the Covered Security Date; (b) the initial registered holder of any shares of Class B Common Stock that are originally issued by the Corporation after the Covered Security Date pursuant to the exercise or conversion of options or warrants or settlement of restricted stock units (RSUs) that, in each case, are outstanding as of the Covered Security Date; (c) each natural person who Transferred shares of or equity awards for Class B Common Stock (including any option or warrant exercisable or convertible into or any RSU that can be settled in shares of Class B Common Stock) to a Permitted Entity that is or becomes a Qualified Stockholder pursuant to subclauses (a) or (b) of this Section (E)(2); and (d) a Permitted Transferee.

3. “ Permitted Entity ” shall mean with respect to a Qualified Stockholder (a) a Permitted Trust (as defined below) solely for the benefit of (i) such Qualified Stockholder, (ii) one or more Family Members of such Qualified Stockholder and/or (iii) any other Permitted Entity of such Qualified Stockholder, or (b) any general partnership, limited partnership, limited liability company, corporation or other entity exclusively owned by (i) such Qualified Stockholder, (ii) one or more Family Members of such Qualified Stockholder and/or (iii) any other Permitted Entity of such Qualified Stockholder.

4. “ Transfer ” of a share of Class B Common Stock shall mean any sale, assignment, transfer, conveyance, hypothecation or other transfer or disposition of such share or any legal or beneficial interest in such share, whether or not for value and whether voluntary or involuntary or by operation of law, including, without limitation, a transfer of a share of Class B Common Stock to a broker or other nominee (regardless of whether there is a corresponding change in beneficial ownership), or the transfer of, or entering into a binding agreement with respect to, Voting Control (as defined below) over such share by proxy or otherwise; provided , however , that the following shall not be considered a “ Transfer ” within the meaning of this Article IV:

(a) the granting of a revocable proxy to officers or directors of the Corporation at the request of the Board of Directors in connection with actions to be taken at an annual or special meeting of stockholders;

(b) entering into a voting trust, agreement or arrangement (with or without granting a proxy) solely with stockholders who are holders of Class B Common Stock that (i) is disclosed either in a Schedule 13D filed with the Securities and Exchange Commission or in writing to the Secretary of the Corporation, (ii) either has a term not exceeding one (1) year or is terminable by the holder of the shares subject thereto at any time and (iii) does not involve any payment of cash, securities, property or other consideration to the holder of the shares subject thereto other than the mutual promise to vote shares in a designated manner; or

 

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(c) the pledge of shares of Class B Common Stock by a stockholder that creates a mere security interest in such shares pursuant to a bona fide loan or indebtedness transaction for so long as such stockholder continues to exercise Voting Control over such pledged shares; provided, however, that a foreclosure on such shares or other similar action by the pledgee shall constitute a “Transfer” unless such foreclosure or similar action qualifies as a “Permitted Transfer”.

A “ Transfer ” shall also be deemed to have occurred with respect to a share of Class B Common Stock beneficially held by (i) an entity that is a Permitted Entity, if there occurs any act or circumstance that causes such entity to no longer be a Permitted Entity or (ii) an entity that is a Qualified Stockholder, if there occurs a Transfer on a cumulative basis, from and after the Covered Security Date, of a majority of the voting power of the voting securities of such entity or any direct or indirect Parent of such entity, other than a Transfer to parties that are, as of the Covered Security Date, holders of voting securities of any such entity or Parent of such entity. “Parent” of an entity shall mean any entity that directly or indirectly owns or controls a majority of the voting power of the voting securities of such entity.

5. “ Permitted Transfer ” shall mean, and be restricted to, any Transfer of a share of Class B Common Stock:

(a) by a Qualified Stockholder to (i) one or more Family Members of such Qualified Stockholder, or (ii) any Permitted Entity of such Qualified Stockholder; or

(b) by a Permitted Entity of a Qualified Stockholder to (i) such Qualified Stockholder or one or more Family Members of such Qualified Stockholder, or (ii) any other Permitted Entity of such Qualified Stockholder.

6. “ Permitted Transferee ” shall mean a transferee of shares of Class B Common Stock received in a Transfer that constitutes a Permitted Transfer.

7. “ Permitted Trust ” shall mean a bona fide trust where each trustee is (a) a Qualified Stockholder, (b) Family Member or (c) a professional in the business of providing trustee services, including private professional fiduciaries, trust companies and bank trust departments.

8. “ Voting Control ” shall mean, with respect to a share of Class B Common Stock, the power (whether exclusive or shared) to vote or direct the voting of such share by proxy, voting agreement or otherwise.

ARTICLE V

Subject to Article IV, Section (B)(6)(e), the Board of Directors of the Corporation is expressly authorized to make, alter or repeal the Bylaws of the Corporation.

 

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ARTICLE VI

Elections of directors need not be by written ballot unless a stockholder demands election by written ballot at the meeting and before voting begins or unless otherwise provided in the Bylaws of the Corporation.

ARTICLE VII

(A) To the fullest extent permitted by the Delaware General Corporation Law, as the same exists or as may hereafter be amended, a director of the Corporation shall not be personally liable to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director.

(B) The Corporation shall indemnify to the fullest extent permitted by law any person made or threatened to be made a party to an action or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that he, his testator or intestate is or was a director or officer of the Corporation or any predecessor of the Corporation, or serves or served at any other enterprise as a director or officer at the request of the Corporation or any predecessor to the Corporation.

(C) Neither any amendment nor repeal of this Article VII, nor the adoption of any provision of the Corporation’s Certificate of Incorporation inconsistent with this Article VII, shall eliminate or reduce the effect of this Article VII in respect of any matter occurring, or any action or proceeding accruing or arising or that, but for this Article VII, would accrue or arise, prior to such amendment, repeal or adoption of an inconsistent provision.”

* * *

 

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The foregoing Eleventh Amended and Restated Certificate of Incorporation has been duly adopted by this corporation’s Board of Directors and stockholders in accordance with the applicable provisions of Sections 228, 242 and 245 of the Delaware General Corporation Law.

Executed at Palo Alto, California, October 1, 2010.

 

/s/ Mark Zuckerberg

Mark Zuckerberg, President and Chief Executive Officer

[ELEVENTH AMENDED AND RESTATED CERTIFICATE OF INCORPORATION]

EXHIBIT 3.2

BYLAWS

OF

Facebook, Inc.,

As adopted on July 29, 2004 and

As amended on April 28, 2005, August 1, 2008, October 26, 2009 and March 4, 2010


TABLE OF CONTENTS

 

               Page  
ARTICLE I   

CORPORATE OFFICES

     1   
   1.1    Registered Office      1   
   1.2    Other Offices      1   
ARTICLE II   

MEETINGS OF STOCKHOLDERS

     1   
   2.1    Place Of Meetings      1   
   2.2    Annual Meeting      1   
   2.3    Special Meeting      1   
   2.4    Notice Of Stockholders’ Meetings      2   
   2.5    Manner Of Giving Notice; Affidavit Of Notice      2   
   2.6    Quorum      2   
   2.7    Adjourned Meeting; Notice      2   
   2.8    Organization; Conduct of Business      3   
   2.9    Voting      3   
   2.10    Waiver Of Notice      3   
   2.11    Stockholder Action By Written Consent Without A Meeting      4   
   2.12    Record Date For Stockholder Notice; Voting; Giving Consents      4   
   2.13    Proxies      5   
ARTICLE III   

DIRECTORS

     5   
   3.1    Powers      5   
   3.2    Number Of Directors      6   
   3.3    Election, Qualification And Term Of Office Of Directors      6   
   3.4    Resignation And Vacancies      6   
   3.5    Place Of Meetings; Meetings By Telephone      7   
   3.6    Regular Meetings      7   
   3.7    Special Meetings; Notice      7   
   3.8    Quorum      8   
   3.9    Waiver Of Notice      8   
   3.10    Board Action By Written Consent Without A Meeting      8   
   3.11    Fees And Compensation Of Directors      9   
   3.12    Approval Of Loans To Officers      9   

 

-i-


TABLE OF CONTENTS

(continued)

 

               Page  
   3.13    Removal Of Directors      9   
   3.14    Chairman Of The Board Of Directors      9   
ARTICLE IV   

COMMITTEES

     9   
   4.1    Committees Of Directors      9   
   4.2    Committee Minutes      10   
   4.3    Meetings And Action Of Committees      10   
ARTICLE V   

OFFICERS

     10   
   5.1    Officers      10   
   5.2    Appointment Of Officers      10   
   5.3    Subordinate Officers      11   
   5.4    Removal And Resignation Of Officers      11   
   5.5    Vacancies In Offices      11   
   5.6    Chief Executive Officer      11   
   5.7    President      11   
   5.8    Vice Presidents      12   
   5.9    Secretary      12   
   5.10    Chief Financial Officer      12   
   5.11    Representation Of Shares Of Other Corporations      13   
   5.12    Authority And Duties Of Officers      13   
ARTICLE VI   

INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES, AND OTHER AGENTS

     13   
   6.1    Indemnification Of Directors And Officers      13   
   6.2    Indemnification Of Others      13   
   6.3    Payment Of Expenses In Advance      14   
   6.4    Indemnity Not Exclusive      14   
   6.5    Insurance      14   
   6.6    Conflicts      14   
ARTICLE VII   

RECORDS AND REPORTS

     15   
   7.1    Maintenance And Inspection Of Records      15   
   7.2    Inspection By Directors      15   

 

-ii-


TABLE OF CONTENTS

(continued)

 

               Page  
ARTICLE VIII   

GENERAL MATTERS

     16   
   8.1    Checks      16   
   8.2    Execution Of Corporate Contracts And Instruments      16   
   8.3    Stock Certificates; Partly Paid Shares      16   
   8.4    Special Designation On Certificates      17   
   8.5    Lost Certificates      17   
   8.6    Construction; Definitions      17   
   8.7    Dividends      17   
   8.8    Fiscal Year      18   
   8.9    Seal      18   
   8.10    Transfer Of Stock      18   
   8.11    Stock Transfer Agreements      18   
   8.12    Registered Stockholders      18   
   8.13    Facsimile Signature      18   
   8.14    Restriction on Transfer      18   
   8.15    Right of First Refusal      19   
   8.16    Termination of Rights; Legend; Waiver.      21   
   8.17    Market Standoff Restriction      21   
ARTICLE IX   

AMENDMENTS

     22   

 

-iii-


BYLAWS

OF

Facebook, Inc.

ARTICLE I

CORPORATE OFFICES

 

  1.1 Registered Office .

The registered office of the corporation shall be in the City of Wilmington, County of New Castle, State of Delaware. The name of the registered agent of the corporation at such location is The Corporation Service Company.

 

  1.2 Other Offices .

The Board of Directors may at any time establish other offices at any place or places where the corporation is qualified to do business.

ARTICLE II

MEETINGS OF STOCKHOLDERS

 

  2.1 Place Of Meetings .

Meetings of stockholders shall be held at any place, within or outside the State of Delaware, designated by the Board of Directors. In the absence of any such designation, stockholders’ meetings shall be held at the registered office of the corporation.

 

  2.2 Annual Meeting .

The annual meeting of stockholders shall be held on such date, time and place, either within or without the State of Delaware, as may be designated by resolution of the Board of Directors each year. At the meeting, directors shall be elected and any other proper business may be transacted.

 

  2.3 Special Meeting .

A special meeting of the stockholders may be called at any time by the Board of Directors, the chairman of the board, the president or by one or more stockholders holding shares in the aggregate entitled to cast not less than ten percent of the votes at that meeting.

If a special meeting is called by any person or persons other than the Board of Directors, the president or the chairman of the board, the request shall be in writing, specifying the time of such meeting and the general nature of the business proposed to be transacted, and shall be delivered personally or sent by registered mail or by telegraphic or other facsimile

 

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transmission to the chairman of the board, the president, any vice president, or the secretary of the corporation. No business may be transacted at such special meeting otherwise than specified in such notice. The officer receiving the request shall cause notice to be promptly given to the stockholders entitled to vote, in accordance with the provisions of Sections 2.4 and 2.5 of this Article II, that a meeting will be held at the time requested by the person or persons calling the meeting, not less than thirty-five (35) nor more than sixty (60) days after the receipt of the request. If the notice is not given within twenty (20) days after the receipt of the request, the person or persons requesting the meeting may give the notice. Nothing contained in this paragraph of this Section 2.3 shall be construed as limiting, fixing, or affecting the time when a meeting of stockholders called by action of the Board of Directors may be held.

 

  2.4 Notice Of Stockholders’ Meetings .

All notices of meetings with stockholders shall be in writing and shall be sent or otherwise given in accordance with Section 2.5 of these Bylaws not less than ten (10) nor more than sixty (60) days before the date of the meeting to each stockholder entitled to vote at such meeting. The notice shall specify the place (if any), date and hour of the meeting, and in the case of a special meeting, the purpose or purposes for which the meeting is called.

 

  2.5 Manner Of Giving Notice; Affidavit Of Notice .

Written notice of any meeting of stockholders, if mailed, is given when deposited in the United States mail, postage prepaid, directed to the stockholder at his address as it appears on the records of the corporation. Without limiting the manner by which notice otherwise may be given effectively to stockholders, any notice to stockholders may be given by electronic mail or other electronic transmission, in the manner provided in Section 232 of the Delaware General Corporation Law. An affidavit of the secretary or an assistant secretary or of the transfer agent of the corporation that the notice has been given shall, in the absence of fraud, be prima facie evidence of the facts stated therein.

 

  2.6 Quorum .

The holders of a majority of the shares of stock issued and outstanding and entitled to vote thereat, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders for the transaction of business except as otherwise provided by statute or by the certificate of incorporation. If, however, such quorum is not present or represented at any meeting of the stockholders, then either (a) the chairman of the meeting or (b) holders of a majority of the shares of stock entitled to vote who are present, in person or by proxy, shall have power to adjourn the meeting to another place (if any), date or time.

 

  2.7 Adjourned Meeting; Notice .

When a meeting is adjourned to another place (if any), date or time, unless these Bylaws otherwise require, notice need not be given of the adjourned meeting if the time and place (if any), thereof and the means of remote communications, if any, by which stockholders and proxyholders may be deemed to be present and vote at such adjourned meeting, are announced at the meeting at which the adjournment is taken. At the adjourned meeting the corporation may transact any business that might have been transacted at the original meeting. If

 

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the adjournment is for more than 30 days, or if after the adjournment a new record date is fixed for the adjourned meeting, notice of the place (if any), date and time of the adjourned meeting and the means of remote communications, if any, by which stockholders and proxy holders may be deemed to be present in person and vote at such adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting.

 

  2.8 Organization; Conduct of Business .

(a) Such person as the Board of Directors may have designated or, in the absence of such a person, the President of the Corporation or, in his or her absence, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as Chairman of the meeting. In the absence of the Secretary of the Corporation, the Secretary of the meeting shall be such person as the Chairman of the meeting appoints.

(b) The Chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including the manner of voting and the conduct of business. The date and time of opening and closing of the polls for each matter upon which the stockholders will vote at the meeting shall be announced at the meeting.

 

  2.9 Voting .

The stockholders entitled to vote at any meeting of stockholders shall be determined in accordance with the provisions of Section 2.12 of these Bylaws, subject to the provisions of Sections 217 and 218 of the General Corporation Law of Delaware (relating to voting rights of fiduciaries, pledgors and joint owners of stock and to voting trusts and other voting agreements).

Except as may be otherwise provided in the certificate of incorporation, each stockholder shall be entitled to one vote for each share of capital stock held by such stockholder. All elections shall be determined by a plurality of the votes cast, and except as otherwise required by law, all other matters shall be determined by a majority of the votes cast affirmatively or negatively.

 

  2.10 Waiver Of Notice .

Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these Bylaws, a written waiver thereof, signed by the person entitled to notice, or waiver by electronic mail or other electronic transmission by such person, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice, or any waiver of notice by electronic transmission, unless so required by the certificate of incorporation or these Bylaws.

 

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  2.11 Stockholder Action By Written Consent Without A Meeting .

Unless otherwise provided in the certificate of incorporation, any action required to be taken at any annual or special meeting of stockholders of the corporation, or any action that may be taken at any annual or special meeting of such stockholders, may be taken without a meeting, without prior notice, and without a vote if a consent in writing, setting forth the action so taken, is (i) signed by the holders of outstanding stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting at which all shares entitled to vote thereon were present and voted, and (ii) delivered to the Corporation in accordance with Section 228(a) of the Delaware General Corporation Law.

Every written consent shall bear the date of signature of each stockholder who signs the consent and no written consent shall be effective to take the corporate action referred to therein unless, within 60 days of the date the earliest dated consent is delivered to the Corporation, a written consent or consents signed by a sufficient number of holders to take action are delivered to the Corporation in the manner prescribed in this Section. A telegram, cablegram, electronic mail or other electronic transmission consenting to an action to be taken and transmitted by a stockholder or proxyholder, or by a person or persons authorized to act for a stockholder or proxyholder, shall be deemed to be written, signed and dated for purposes of this Section to the extent permitted by law. Any such consent shall be delivered in accordance with Section 228(d)(1) of the Delaware General Corporation Law.

Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

Prompt notice of the taking of the corporate action without a meeting by less than unanimous written consent shall be given to those stockholders who have not consented in writing (including by electronic mail or other electronic transmission as permitted by law). If the action which is consented to is such as would have required the filing of a certificate under any section of the General Corporation Law of Delaware if such action had been voted on by stockholders at a meeting thereof, then the certificate filed under such section shall state, in lieu of any statement required by such section concerning any vote of stockholders, that written notice and written consent have been given as provided in Section 228 of the General Corporation Law of Delaware.

 

  2.12 Record Date For Stockholder Notice; Voting; Giving Consents .

In order that the corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to express consent to corporate action in writing without a meeting, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than 60 nor less than 10 days before the date of such meeting, nor more than 60 days prior to any other action.

 

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If the Board of Directors does not so fix a record date:

(a) The record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held.

(b) The record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent (including consent by electronic mail or other electronic transmission as permitted by law) is delivered to the corporation.

(c) The record date for determining stockholders for any other purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.

A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting, if such adjournment is for thirty (30) days or less; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting.

 

  2.13 Proxies .

Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by an instrument in writing or by an electronic transmission permitted by law filed with the secretary of the corporation, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A proxy shall be deemed signed if the stockholder’s name is placed on the proxy (whether by manual signature, typewriting, facsimile, electronic or telegraphic transmission or otherwise) by the stockholder or the stockholder’s attorney-in-fact. The revocability of a proxy that states on its face that it is irrevocable shall be governed by the provisions of Section 212(e) of the General Corporation Law of Delaware.

ARTICLE III

DIRECTORS

 

  3.1 Powers .

Subject to the provisions of the General Corporation Law of Delaware and any limitations in the certificate of incorporation or these Bylaws relating to action required to be approved by the stockholders 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.

 

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  3.2 Number Of Directors .

The number of directors constituting the entire Board of Directors shall be not fewer than five (5) and not more than eight (8), with the exact number of directors to be fixed from time to time within such limit by a duly adopted resolution of the Board of Directors or the stockholders. No reduction of the authorized number of directors shall have the effect of removing any director before such director’s term of office expires.

 

  3.3 Election, Qualification And Term Of Office Of Directors .

Except as provided in Section 3.4 of these Bylaws, and unless otherwise provided in the certificate of incorporation, directors shall be elected at each annual meeting of stockholders to hold office until the next annual meeting. Directors need not be stockholders unless so required by the certificate of incorporation or these Bylaws, wherein other qualifications for directors may be prescribed. Each director, including a director elected to fill a vacancy, shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal.

Unless otherwise specified in the certificate of incorporation, elections of directors need not be by written ballot.

 

  3.4 Resignation And Vacancies .

Any director may resign at any time upon written notice to the attention of the Secretary of the corporation. When one or more directors so resigns and the resignation is effective at a future date, a majority of the directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective, and each director so chosen shall hold office as provided in this section in the filling of other vacancies.

Unless otherwise provided in the certificate of incorporation or these Bylaws:

(a) Vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class may be filled (i) by a majority of the directors then in office, although less than a quorum, or by a sole remaining director, or (ii) by vote or written consent of the stockholders having the right to vote as a single class.

(b) Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the certificate of incorporation, vacancies and newly created directorships of such class or classes or series may be filled (i) by a majority of the directors elected by such class or classes or series thereof then in office, or by a sole remaining director so elected or (ii) by vote or written consent of the holders of a majority of such class or classes or series then outstanding on an as-converted to Common Stock basis.

If at any time, by reason of death or resignation or other cause, the corporation should have no directors in office, then any officer or any stockholder or an executor, administrator, trustee or guardian of a stockholder, or other fiduciary entrusted with like

 

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responsibility for the person or estate of a stockholder, may call a special meeting of stockholders in accordance with the provisions of the certificate of incorporation or these Bylaws, or may apply to the Court of Chancery for a decree summarily ordering an election as provided in Section 211 of the General Corporation Law of Delaware.

If, at the time of filling any vacancy or any newly created directorship, the directors then in office constitute less than a majority of the whole board (as constituted immediately prior to any such increase), then the Court of Chancery may, upon application of any stockholder or stockholders holding at least 10% of the total number of the shares at the time outstanding having the right to vote for such directors, summarily order an election to be held to fill any such vacancies or newly created directorships, or to replace the directors chosen by the directors then in office as aforesaid, which election shall be governed by the provisions of Section 211 of the General Corporation Law of Delaware as far as applicable.

 

  3.5 Place Of Meetings; Meetings By Telephone .

The Board of Directors of the corporation may hold meetings, both regular and special, either within or outside the State of Delaware.

Unless otherwise restricted by the certificate of incorporation or these Bylaws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors, or any committee, by means of conference telephone or other communications equipment by means of which all persons participating in the meeting can hear each other, and such participation in a meeting shall constitute presence in person at the meeting.

 

  3.6 Regular Meetings .

Regular meetings of the Board of Directors may be held without notice at such time and at such place as shall from time to time be determined by the board.

 

  3.7 Special Meetings; Notice .

Special meetings of the Board of Directors for any purpose or purposes may be called at any time by the chairman of the board, the president, any vice president, the secretary or any two directors.

Notice of the time and place of special meetings shall be delivered personally or by telephone to each director or sent by first-class mail, facsimile, electronic transmission, or telegram, charges prepaid, addressed to each director at that director’s address as it is shown on the records of the corporation. If the notice is mailed, it shall be deposited in the United States mail at least four days before the time of the holding of the meeting. If the notice is delivered personally or by facsimile, electronic transmission, telephone or telegram, it shall be delivered at least 48 hours before the time of the holding of the meeting. Any oral notice given personally or by telephone may be communicated either to the director or to a person at the office of the director who the person giving the notice has reason to believe will promptly communicate it to the director. The notice need not specify the purpose of the meeting. The notice need not specify the place of the meeting, if the meeting is to be held at the principal executive office of the corporation. Unless otherwise indicated in the notice thereof, any and all business may be transacted at a special meeting.

 

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  3.8 Quorum .

At all meetings of the Board of Directors, a majority of the total number of directors shall constitute a quorum for the transaction of business and the act of a majority of the directors present at any meeting at which there is a quorum shall be the act of the Board of Directors, except as may be otherwise specifically provided by statute or by the certificate of incorporation. If a quorum is not present at any meeting of the Board of Directors, then the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.

A meeting at which a quorum is initially present may continue to transact business notwithstanding the withdrawal of directors, if any action taken is approved by at least a majority of the required quorum for that meeting.

 

  3.9 Waiver Of Notice .

Whenever notice is required to be given under any provision of the General Corporation Law of Delaware or of the certificate of incorporation or these Bylaws, a written waiver thereof, signed by the person entitled to notice, or waiver by electronic mail or other electronic transmission by such person, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors, or members of a committee of directors, need be specified in any written waiver of notice unless so required by the certificate of incorporation or these Bylaws.

 

  3.10 Board Action By Written Consent Without A Meeting .

Unless otherwise restricted by the certificate of incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the board or committee, as the case may be, consent thereto in writing or by electronic transmission, and the writing or writings or electronic transmission or transmissions are filed with the minutes of proceedings of the board or committee. Such filing shall be in paper form if the minutes are maintained in paper form and shall be in electronic form if the minutes are maintained in electronic form.

Any copy, facsimile or other reliable reproduction of a consent in writing may be substituted or used in lieu of the original writing for any and all purposes for which the original writing could be used, provided that such copy, facsimile or other reproduction shall be a complete reproduction of the entire original writing.

 

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  3.11 Fees And Compensation Of Directors .

Unless otherwise restricted by the certificate of incorporation or these Bylaws, the Board of Directors shall have the authority to fix the compensation of directors. No such compensation shall preclude any director from serving the corporation in any other capacity and receiving compensation therefor.

 

  3.12 Approval Of Loans To Officers .

The corporation may lend money to, or guarantee any obligation of, or otherwise assist any officer or other employee of the corporation or of its subsidiary, including any officer or employee who is a director of the corporation or its subsidiary, whenever, in the judgment of the directors, such loan, guaranty or assistance may reasonably be expected to benefit the corporation. The loan, guaranty or other assistance may be with or without interest and may be unsecured, or secured in such manner as the Board of Directors shall approve, including, without limitation, a pledge of shares of stock of the corporation. Nothing in this section shall be deemed to deny, limit or restrict the powers of guaranty or warranty of the corporation at common law or under any statute.

 

  3.13 Removal Of Directors .

Unless otherwise restricted by statute, by the certificate of incorporation or by these Bylaws, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.

No reduction of the authorized number of directors shall have the effect of removing any director prior to the expiration of such director’s term of office.

 

  3.14 Chairman Of The Board Of Directors .

The corporation may also have, at the discretion of the Board of Directors, a chairman of the Board of Directors who shall not be considered an officer of the corporation.

ARTICLE IV

COMMITTEES

 

  4.1 Committees Of Directors .

The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the corporation. The Board may designate 1 or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board of Directors to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors, or in these Bylaws, shall have and may exercise all the powers and authority of the

 

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Board of Directors in the management of the business and affairs of the corporation, and may authorize the seal of the corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by the General Corporate Law of Delaware to be submitted to stockholders for approval or (ii) adopting, amending or repealing any Bylaw of the corporation.

 

  4.2 Committee Minutes .

Each committee shall keep regular minutes of its meetings and report the same to the Board of Directors when required.

 

  4.3 Meetings And Action Of Committees .

Meetings and actions of committees shall be governed by, and held and taken in accordance with, the provisions of Section 3.5 (place of meetings and meetings by telephone), Section 3.6 (regular meetings), Section 3.7 (special meetings and notice), Section 3.8 (quorum), Section 3.9 (waiver of notice), and Section 3.10 (action without a meeting) of these Bylaws, with such changes in the context of such provisions as are necessary to substitute the committee and its members for the Board of Directors and its members; provided, however, that the time of regular meetings of committees may be determined either by resolution of the Board of Directors or by resolution of the committee, that special meetings of committees may also be called by resolution of the Board of Directors and that notice of special meetings of committees shall also be given to all alternate members, who shall have the right to attend all meetings of the committee. The Board of Directors may adopt rules for the government of any committee not inconsistent with the provisions of these Bylaws.

ARTICLE V

OFFICERS

 

  5.1 Officers .

The officers of the corporation shall be a chief executive officer, a president, a secretary, and a chief financial officer. The corporation may also have, at the discretion of the Board of Directors, a chief executive officer, one or more vice presidents, one or more assistant secretaries, one or more assistant treasurers, and any such other officers as may be appointed in accordance with the provisions of Section 5.3 of these Bylaws. Any number of offices may be held by the same person.

 

  5.2 Appointment Of Officers .

The officers of the corporation, except such officers as may be appointed in accordance with the provisions of Sections 5.3 or 5.5 of these Bylaws, shall be appointed by the Board of Directors, subject to the rights, if any, of an officer under any contract of employment.

 

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  5.3 Subordinate Officers .

The Board of Directors may appoint, or empower the chief executive officer or the president to appoint, such other officers and agents as the business of the corporation may require, each of whom shall hold office for such period, have such authority, and perform such duties as are provided in these Bylaws or as the Board of Directors may from time to time determine.

 

  5.4 Removal And Resignation Of Officers .

Subject to the rights, if any, of an officer under any contract of employment, any officer may be removed, either with or without cause, by an affirmative vote of the majority of the Board of Directors at any regular or special meeting of the board or, except in the case of an officer chosen by the Board of Directors, by any officer upon whom the power of removal is conferred by the Board of Directors.

Any officer may resign at any time by giving written notice to the corporation. Any resignation shall take effect at the date of the receipt of that notice or at any later time specified in that notice; and, unless otherwise specified in that notice, the acceptance of the resignation shall not be necessary to make it effective. Any resignation is without prejudice to the rights, if any, of the corporation under any contract to which the officer is a party.

 

  5.5 Vacancies In Offices .

Any vacancy occurring in any office of the corporation shall be filled by the Board of Directors.

 

  5.6 Chief Executive Officer .

Subject to such supervisory powers, if any, as may be given by the Board of Directors to the chairman of the board, if any, the chief executive officer of the corporation (if such an officer is appointed) shall, subject to the control of the Board of Directors, have general supervision, direction, and control of the business and the officers of the corporation. He or she shall preside at all meetings of the stockholders and, in the absence or nonexistence of a chairman of the board, at all meetings of the Board of Directors and shall have the general powers and duties of management usually vested in the office of chief executive officer of a corporation and shall have such other powers and duties as may be prescribed by the Board of Directors or these Bylaws.

 

  5.7 President .

Subject to such supervisory powers, if any, as may be given by the Board of Directors to the chairman of the board (if any) or the chief executive officer, the president shall have general supervision, direction, and control of the business and other officers of the corporation. He or she shall have the general powers and duties of management usually vested in the office of president of a corporation and such other powers and duties as may be prescribed by the Board of Directors or these Bylaws.

 

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  5.8 Vice Presidents .

In the absence or disability of the chief executive officer and president, the vice presidents, if any, in order of their rank as fixed by the Board of Directors or, if not ranked, a vice president designated by the Board of Directors, shall perform all the duties of the president and when so acting shall have all the powers of, and be subject to all the restrictions upon, the president. The vice presidents shall have such other powers and perform such other duties as from time to time may be prescribed for them respectively by the Board of Directors, these Bylaws, the president or the chairman of the board.

 

  5.9 Secretary .

The secretary shall keep or cause to be kept, at the principal executive office of the corporation or such other place as the Board of Directors may direct, a book of minutes of all meetings and actions of directors, committees of directors, and stockholders. The minutes shall show the time and place of each meeting, the names of those present at directors’ meetings or committee meetings, the number of shares present or represented at stockholders’ meetings, and the proceedings thereof.

The secretary shall keep, or cause to be kept, at the principal executive office of the corporation or at the office of the corporation’s transfer agent or registrar, as determined by resolution of the Board of Directors, a share register, or a duplicate share register, showing the names of all stockholders and their addresses, the number and classes of shares held by each, the number and date of certificates evidencing such shares, and the number and date of cancellation of every certificate surrendered for cancellation.

The secretary shall give, or cause to be given, notice of all meetings of the stockholders and of the Board of Directors required to be given by law or by these Bylaws. He or she shall keep the seal of the corporation, if one be adopted, in safe custody and shall have such other powers and perform such other duties as may be prescribed by the Board of Directors or by these Bylaws.

 

  5.10 Chief Financial Officer .

The chief financial officer shall keep and maintain, or cause to be kept and maintained, adequate and correct books and records of accounts of the properties and business transactions of the corporation, including accounts of its assets, liabilities, receipts, disbursements, gains, losses, capital retained earnings, and shares. The books of account shall at all reasonable times be open to inspection by any director.

The chief financial officer shall deposit all moneys and other valuables in the name and to the credit of the corporation with such depositories as may be designated by the Board of Directors. He or she shall disburse the funds of the corporation as may be ordered by the Board of Directors, shall render to the president, the chief executive officer, or the directors, upon request, an account of all his or her transactions as chief financial officer and of the financial condition of the corporation, and shall have other powers and perform such other duties as may be prescribed by the Board of Directors or the bylaws.

 

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  5.11 Representation Of Shares Of Other Corporations .

The chairman of the board, the chief executive officer, the president, any vice president, the chief financial officer, the secretary or assistant secretary of this corporation, or any other person authorized by the Board of Directors or the chief executive officer or the president or a vice president, is authorized to vote, represent, and exercise on behalf of this corporation all rights incident to any and all shares of any other corporation or corporations standing in the name of this corporation. The authority granted herein may be exercised either by such person directly or by any other person authorized to do so by proxy or power of attorney duly executed by the person having such authority.

 

  5.12 Authority And Duties Of Officers .

In addition to the foregoing authority and duties, all officers of the corporation shall respectively have such authority and perform such duties in the management of the business of the corporation as may be designated from time to time by the Board of Directors or the stockholders.

ARTICLE VI

INDEMNIFICATION OF DIRECTORS, OFFICERS,

EMPLOYEES, AND OTHER AGENTS

 

  6.1 Indemnification Of Directors And Officers .

The corporation shall, to the maximum extent and in the manner permitted by the General Corporation Law of Delaware, indemnify each of its directors and officers against expenses (including attorneys’ fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 6.1, a “director” or “officer” of the corporation includes any person (a) who is or was a director or officer of the corporation, (b) who is or was serving at the request of the corporation as a director or officer of another corporation, partnership, joint venture, trust or other enterprise, or (c) who was a director or officer of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

 

  6.2 Indemnification Of Others .

The corporation shall have the power, to the maximum extent and in the manner permitted by the General Corporation Law of Delaware, to indemnify each of its employees and agents (other than directors and officers) against expenses (including attorneys’ fees), judgments, fines, settlements and other amounts actually and reasonably incurred in connection with any proceeding, arising by reason of the fact that such person is or was an agent of the corporation. For purposes of this Section 6.2, an “employee” or “agent” of the corporation (other than a director or officer) includes any person (a) who is or was an employee or agent of the corporation, (b) who is or was serving at the request of the corporation as an employee or agent of another corporation, partnership, joint venture, trust or other enterprise, or (c) who was an employee or agent of a corporation which was a predecessor corporation of the corporation or of another enterprise at the request of such predecessor corporation.

 

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  6.3 Payment Of Expenses In Advance .

Expenses incurred in defending any action or proceeding for which indemnification is required pursuant to Section 6.1 or for which indemnification is permitted pursuant to Section 6.2 following authorization thereof by the Board of Directors shall be paid by the corporation in advance of the final disposition of such action or proceeding upon receipt of an undertaking by or on behalf of the indemnified party to repay such amount if it shall ultimately be determined by final judicial decision from which there is no further right to appeal that the indemnified party is not entitled to be indemnified as authorized in this Article VI.

 

  6.4 Indemnity Not Exclusive .

The indemnification provided by this Article VI shall not be deemed exclusive of any other rights to which those seeking indemnification may be entitled under any bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in an official capacity and as to action in another capacity while holding such office, to the extent that such additional rights to indemnification are authorized in the certificate of incorporation

 

  6.5 Insurance .

The corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the corporation would have the power to indemnify him or her against such liability under the provisions of the General Corporation Law of Delaware.

 

  6.6 Conflicts .

No indemnification or advance shall be made under this Article VI, except where such indemnification or advance is mandated by law or the order, judgment or decree of any court of competent jurisdiction, in any circumstance where it appears:

(a) That it would be inconsistent with a provision of the certificate of incorporation, these Bylaws, a resolution of the stockholders or an agreement in effect at the time of the accrual of the alleged cause of the action asserted in the proceeding in which the expenses were incurred or other amounts were paid, which prohibits or otherwise limits indemnification; or

(b) That it would be inconsistent with any condition expressly imposed by a court in approving a settlement.

 

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ARTICLE VII

RECORDS AND REPORTS

 

  7.1 Maintenance And Inspection Of Records .

The corporation shall, either at its principal executive offices or at such place or places as designated by the Board of Directors, keep a record of its stockholders listing their names and addresses and the number and class of shares held by each stockholder, a copy of these Bylaws as amended to date, accounting books, and other records.

Any stockholder of record, in person or by attorney or other agent, shall, upon written demand under oath stating the purpose thereof, have the right during the usual hours for business to inspect for any proper purpose the corporation’s stock ledger, a list of its stockholders, and its other books and records and to make copies or extracts therefrom. A proper purpose shall mean a purpose reasonably related to such person’s interest as a stockholder. In every instance where an attorney or other agent is the person who seeks the right to inspection, the demand under oath shall be accompanied by a power of attorney or such other writing that authorizes the attorney or other agent to so act on behalf of the stockholder. The demand under oath shall be directed to the corporation at its registered office in Delaware or at its principal place of business.

A complete list of stockholders entitled to vote at any meeting of stockholders, arranged in alphabetical order for each class of stock and showing the address of each such stockholder and the number of shares registered in each such stockholder’s name, shall be open to the examination of any such stockholder for a period of at least ten (10) days prior to the meeting in the manner provided by law. The stock list shall also be open to the examination of any stockholder during the whole time of the meeting as provided by law. This list shall presumptively determine the identity of the stockholders entitled to vote at the meeting and the number of shares held by each of them.

 

  7.2 Inspection By Directors .

Any director shall have the right to examine the corporation’s stock ledger, a list of its stockholders, and its other books and records for a purpose reasonably related to his or her position as a director. The Court of Chancery is hereby vested with the exclusive jurisdiction to determine whether a director is entitled to the inspection sought. The Court may summarily order the corporation to permit the director to inspect any and all books and records, the stock ledger, and the stock list and to make copies or extracts therefrom. The Court may, in its discretion, prescribe any limitations or conditions with reference to the inspection, or award such other and further relief as the Court may deem just and proper.

 

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ARTICLE VIII

GENERAL MATTERS

 

  8.1 Checks .

From time to time, the Board of Directors shall determine by resolution which person or persons may sign or endorse all checks, drafts, other orders for payment of money, notes or other evidences of indebtedness that are issued in the name of or payable to the corporation, and only the persons so authorized shall sign or endorse those instruments.

 

  8.2 Execution Of Corporate Contracts And Instruments .

The Board of Directors, except as otherwise provided in these Bylaws, may authorize any officer or officers, or agent or agents, to enter into any contract or execute any instrument in the name of and on behalf of the corporation; such authority may be general or confined to specific instances. Unless so authorized or ratified by the Board of Directors or within the agency power of an officer, no officer, agent or employee shall have any power or authority to bind the corporation by any contract or engagement or to pledge its credit or to render it liable for any purpose or for any amount.

 

  8.3 Stock Certificates; Partly Paid Shares .

The shares of a corporation shall be represented by certificates, provided that the Board of Directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of its stock shall be uncertificated shares. Any such resolution shall not apply to shares represented by a certificate until such certificate is surrendered to the corporation. Notwithstanding the adoption of such a resolution by the Board of Directors, every holder of stock represented by certificates and upon request every holder of uncertificated shares shall be entitled to have a certificate signed by, or in the name of the corporation by the chairman or vice-chairman of the Board of Directors, or the president or vice-president, and by the treasurer or an assistant treasurer, or the secretary or an assistant secretary of such corporation representing the number of shares registered in certificate form. Any or all of the signatures on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate has ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he or she were such officer, transfer agent or registrar at the date of issue.

The corporation may issue the whole or any part of its shares as partly paid and subject to call for the remainder of the consideration to be paid therefor. Upon the face or back of each stock certificate issued to represent any such partly paid shares, upon the books and records of the corporation in the case of uncertificated partly paid shares, the total amount of the consideration to be paid therefor and the amount paid thereon shall be stated. Upon the declaration of any dividend on fully paid shares, the corporation shall declare a dividend upon partly paid shares of the same class, but only upon the basis of the percentage of the consideration actually paid thereon.

 

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  8.4 Special Designation On Certificates .

If the corporation is authorized to issue more than one class of stock or more than one series of any class, then the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights shall be set forth in full or summarized on the face or back of the certificate that the corporation shall issue to represent such class or series of stock; provided, however, that, except as otherwise provided in Section 202 of the General Corporation Law of Delaware, in lieu of the foregoing requirements there may be set forth on the face or back of the certificate that the corporation shall issue to represent such class or series of stock a statement that the corporation will furnish without charge to each stockholder who so requests the powers, the designations, the preferences, and the relative, participating, optional or other special rights of each class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or rights.

 

  8.5 Lost Certificates .

Except as provided in this Section 8.5, no new certificates for shares shall be issued to replace a previously issued certificate unless the latter is surrendered to the corporation and cancelled at the same time. The corporation may issue a new certificate of stock or uncertificated shares in the place of any certificate previously issued by it, alleged to have been lost, stolen or destroyed, and the corporation may require the owner of the lost, stolen or destroyed certificate, or the owner’s legal representative, to give the corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate or uncertificated shares.

 

  8.6 Construction; Definitions .

Unless the context requires otherwise, the general provisions, rules of construction, and definitions in the Delaware General Corporation Law shall govern the construction of these Bylaws. Without limiting the generality of this provision, the singular number includes the plural, the plural number includes the singular, and the term “person” includes both a corporation and a natural person.

 

  8.7 Dividends .

The directors of the corporation, subject to any restrictions contained in (a) the General Corporation Law of Delaware or (b) the certificate of incorporation, may declare and pay dividends upon the shares of its capital stock. Dividends may be paid in cash, in property, or in shares of the corporation’s capital stock.

The directors of the corporation may set apart out of any of the funds of the corporation available for dividends a reserve or reserves for any proper purpose and may abolish any such reserve. Such purposes shall include but not be limited to equalizing dividends, repairing or maintaining any property of the corporation, and meeting contingencies.

 

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  8.8 Fiscal Year .

The fiscal year of the corporation shall be fixed by resolution of the Board of Directors and may be changed by the Board of Directors.

 

  8.9 Seal .

The corporation may adopt a corporate seal, which may be altered at pleasure, and may use the same by causing it or a facsimile thereof, to be impressed or affixed or in any other manner reproduced.

 

  8.10 Transfer Of Stock .

Upon compliance with any restrictions on transfer contained in these Bylaws or in any other agreement and surrender to the corporation or the transfer agent of the corporation of a certificate for shares duly endorsed or accompanied by proper evidence of succession, assignation or authority to transfer, it shall be the duty of the corporation to issue a new certificate to the person entitled thereto, cancel the old certificate, and record the transaction in its books.

 

  8.11 Stock Transfer Agreements .

The corporation shall have power to enter into and perform any agreement with any number of stockholders of any one or more classes of stock of the corporation to restrict the transfer of shares of stock of the corporation of any one or more classes owned by such stockholders in any manner not prohibited by the General Corporation Law of Delaware.

 

  8.12 Registered Stockholders .

The corporation shall be entitled to recognize the exclusive right of a person registered on its books as the owner of shares to receive dividends and to vote as such owner, shall be entitled to hold liable for calls and assessments the person registered on its books as the owner of shares, and shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of another person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Delaware.

 

  8.13 Facsimile Signature .

In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.

 

  8.14 Restriction on Transfer .

(a) No holder (“ Stockholder ”) of shares of capital stock of the corporation (“ Shares ”) may transfer, assign, pledge, or otherwise dispose of or encumber Shares without the prior written consent of the corporation.

 

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(b) The restriction contained in subsection 8.14(a) shall not apply to the following transactions:

(i) the first transfer by a Stockholder of Shares acquired by such Stockholder upon exercise of options granted to such Stockholder pursuant to the corporation’s 2005 Stock Plan provided such options are outstanding as of August 1, 2008;

(ii) the transfer of any or all of the Shares during Stockholder’s lifetime or on Stockholder’s death by gift, will or intestacy to Stockholder’s Immediate Family or a trust for the benefit of Stockholder or Stockholder’s Immediate Family. “ Immediate Family ” as used herein shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister;

(iii) [intentionally omitted];

(iv) [intentionally omitted];

(v) [intentionally omitted]; and

(vi) the transfer by an Investor (as defined in the Second Amended and Restated Right of First Refusal and Co-Sale Agreement dated November 1, 2007, as amended, or any successor agreement (the “ Co-Sale Agreement ”)) exercising such Investor’s Co-Sale Right (as defined in the Co-Sale Agreement).

(c) In the case of any transfer consented to by the corporation or described in subsection (b) above, the transferee, assignee, or other recipient shall receive and hold the Shares subject to the provisions of this Section 8.14, and there shall be no further transfer of such stock except in accordance with this Section 8.14.

 

  8.15 Right of First Refusal .

In addition to any other limitation on transfer created by applicable securities laws, these Bylaws or contract, to the extent that the restriction in Section 8.14 above is not applicable for any reason, no Stockholder shall assign or dispose of any interest in any Shares except in compliance with the provisions below and applicable securities laws.

(a) Right of First Refusal . Before any Shares held by a Stockholder may be sold or otherwise transferred (including transfer by gift or operation of law), the corporation or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth herein (the “ Right of First Refusal ”).

(b) Notice of Proposed Transfer . The Stockholder shall deliver to the corporation a written notice (the “ Notice ”) stating: (i) the Stockholder’s bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed transferee (“ Proposed Transferee ”); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the terms and conditions of each proposed sale or transfer. The Stockholder shall offer the Shares at the same price (the “ Offered Price ”) and upon the same terms (or terms as similar as reasonably possible) to the corporation or its assignee(s).

 

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(c) Exercise of Right of First Refusal . At any time within thirty (30) days after receipt of the Notice, the corporation and/or its assignee(s) may, by giving written notice to the Stockholder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (d) below.

(d) Purchase Price . The purchase price (“ Purchase Price ”) for the Shares purchased by the corporation or its assignee(s) under this Section 8.15 shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the corporation in good faith.

(e) Payment . Payment of the Purchase Price shall be made, at the option of the corporation or its assignee(s), in cash (by check or wire transfer), by cancellation of all or a portion of any outstanding indebtedness, or by any combination thereof within thirty (30) days after receipt of the Notice or in the manner and at the times set forth in the Notice.

(f) Stockholder’s Right to Transfer . If all of the Shares proposed in the Notice to be transferred to the Proposed Transferee(s) are not purchased by the corporation and/or its assignee(s) as provided herein, then the Stockholder may sell or otherwise transfer such Shares to the Proposed Transferee(s) described in the Notice at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within sixty (60) days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws. If the Shares described in the Notice are not transferred to the Proposed Transferee(s) within such period, or if the Stockholder proposes to change the price or other terms to make them more favorable to the Proposed Transferee(s), a new Notice shall be given to the corporation, and the corporation and/or its assignees shall again be offered the right of first refusal provided herein before any Shares held by the Stockholder may be sold or otherwise transferred. The terms of this subsection (f) may be waived by the corporation or its assignee(s) in their sole discretion.

(g) Exception for Certain Transfers . Anything to the contrary contained herein notwithstanding, the following transfers shall be exempt from the Right of First Refusal:

(i) the transfer of any or all of the Shares during Stockholder’s lifetime or on Stockholder’s death by gift, will or intestacy to Stockholder’s Immediate Family or a trust for the benefit of Stockholder or Stockholder’s Immediate Family;

(ii) the transfer by an entity Stockholder to an affiliated person or entity, including an affiliated venture capital fund; and

(iii) the transfer by a Stockholder which is a limited or general partnership to any or all of its partners or former partners or a transfer by a stockholder which is a limited liability company to any or all of its members or former members;

(iv) the transfer for no consideration to an organization that is tax-exempt under Section 501(c)(3) of the Internal Revenue Code; and

 

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(v) the transfer by an Investor (as defined in the Co-Sale Agreement) exercising such Investor’s Co-Sale Right (as defined in the Co-Sale Agreement).

(h) In the case of any transfer effected in accordance with subsections (f) or (g) above, the transferee, assignee or other recipient shall receive and hold the Shares subject to the provisions of this Section 8.15, and there shall be no further transfer of such stock except in accordance with this Section 8.15.

 

  8.16 Termination of Rights; Legend; Waiver .

(a) The restrictions in Sections 8.14 and 8.15 shall terminate upon the earlier to occur of (i) the closing of a Liquidation Transaction (as such term is defined in the corporation’s Certificate of Incorporation, as amended, or amended and restated, from time to time); or (ii) the first sale of Common Stock of the corporation to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “ Securities Act ”). Upon termination of such restrictions, a new certificate or certificates representing the Shares not repurchased shall be issued, on request, without the legend referred to in subsection 8.16(b) below and delivered to each Stockholder.

(b) The certificate or certificates representing the Shares may bear the following legend (as well as any legends required by applicable state and federal corporate and securities laws):

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER CONTAINED IN THE BYLAWS OF THE COMPANY.

(c) The provisions of Sections 8.14 and 8.15 may be waived, with respect to any transaction subject thereto, by the corporation; provided , however , that such restrictions shall continue to apply to the Shares subsequent to such transaction.

 

  8.17 Market Standoff Restriction .

Each Stockholder shall not, to the extent requested by the corporation or an underwriter of securities of the corporation, sell or otherwise transfer or dispose of any Shares (other than (1) to donees pursuant to bona fide gifts or (2) distributions to partners, members or stockholders of the Stockholder, provided that in each of case (1) and (2) the recipient agrees to be similarly bound, and other than sales of shares acquired in open market transactions or purchased in the initial public offering) for a period ending up to one hundred eighty (180) days following the effective date of any registration statement of the corporation filed under the Securities Act plus such additional period to accommodate regulatory restrictions on (a) the publication or other distribution of research reports or (b) analyst recommendations and opinions, including (without limitation) the restrictions set forth in Rule 2711(f)(4) of the National Association of Securities Dealers and Rule 472(f)(4) of the New York Stock Exchange, as amended, or any similar successor rules in order to permit publication, recommendations and opinions without such restrictions in the event the corporation issues an earnings release or material news or a material event relating to the corporation occurs during the period; provided ,

 

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however , that such agreement shall be applicable only to the first such registration statement of the corporation which covers securities sold on its behalf to the public in an underwritten offering. For purposes of this Section 8.17, the term “corporation” shall include any wholly owned subsidiary of the corporation into which the corporation merges or consolidates. In order to enforce the foregoing covenant, the corporation shall have the right to place restrictive legends on the certificates representing the Shares subject to this Section 8.17 and to impose stop transfer instructions with respect to the Shares until the end of such period.

ARTICLE IX

AMENDMENTS

The Bylaws of the corporation may be adopted, amended or repealed by the stockholders entitled to vote; provided, however, that the corporation may, in its certificate of incorporation, confer the power to adopt, amend or repeal Bylaws upon the directors. The fact that such power has been so conferred upon the directors shall not divest the stockholders of the power, nor limit their power to adopt, amend or repeal Bylaws.

 

 

 

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CERTIFICATION OF BYLAWS

FACEBOOK, INC.

A Delaware Corporation

I, Theodore W. Ullyot, certify that I am Secretary of Facebook, Inc., a Delaware corporation (the “ Corporation ”), that I am duly authorized to make and deliver this certification, that the attached Bylaws are a true and complete copy of the Bylaws of the Corporation in effect as of the date of this certificate.

Dated: March 4, 2010

 

/s/ Theodore W. Ullyot

Theodore W. Ullyot, Secretary

EXHIBIT 4.1

 

LOGO


LOGO

FACEBOOK, INC.

THE COMPANY WILL FURNISH WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO REQUESTS, A SUMMARY OF THE POWERS, DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OF THE COMPANY AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS OF SUCH PREFERENCES AND RIGHTS, AND THE VARIATIONS IN RIGHTS, PREFERENCES AND

LIMITATIONS DETERMINED FOR EACH SERIES, WHICH ARE FIXED BY THE ARTICLES OF INCORPORATION OF THE COMPANY, AS AMENDED, AND THE RESOLUTIONS OF THE BOARD OF DIRECTORS OF THE COMPANY, AND THE AUTHORITY OF THE BOARD OF DIRECTORS TO DETERMINE VARIATIONS FOR FUTURE SERIES. SUCH REQUEST MAY BE MADE TO THE OFFICE OF THE SECRETARY OF THE COMPANY OR TO THE TRANSFER AGENT. THE

BOARD OF DIRECTORS MAY REQUIRE THE OWNER OF A LOST OR DESTROYED STOCK CERTIFICATE, OR HIS LEGAL REPRESENTATIVES, TO GIVE THE COMPANY A BOND TO INDEMNIFY IT AND ITS TRANSFER AGENTS AND REGISTRARS AGAINST ANY CLAIM THAT MAY BE MADE AGAINST THEM ON ACCOUNT OF THE ALLEGED LOSS OR DESTRUCTION OF ANY SUCH CERTIFICATE.

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian

(Cust) (Minor)

TEN ENT - as tenants by the entireties under Uniform Gifts to Minors Act

(State)

JT TEN - as joint tenants with right of survivorship UNIF TRF MIN ACT - Custodian (until age )

and not as tenants in common (Cust)

under Uniform Transfers to Minors Act

(Minor) (State)

Additional abbreviations may also be used though not in the above list.

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

For value received, hereby sell, assign and transfer unto

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE)

Shares

of the Class A Common Stock represented by the within Certificate, and do hereby irrevocably constitute and appoint

Attorney

to transfer the said stock on the books of the within-named Company with full power of substitution in the premises.

Dated: 20 Signature(s) Guaranteed: Medallion Guarantee Stamp

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (Banks,

Stockbrokers, Savings and Loan Associations and Credit Unions) WITH MEMBERSHIP IN AN APPROVED

SIGNATURE GUARANTEE MEDALLION PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15.

Signature:

Signature:

Notice: The signature to this assignment must correspond with the name as written upon the face of the certificate, in every particular,

without alteration or enlargement, or any change whatever.

The IRS requires that we report the cost basis of certain shares acquired after January 1, 2011. If your shares were covered by

the legislation and you have sold or transferred the shares and requested a specific cost basis calculation method, we have

processed as requested. If you did not specify a cost basis calculation method, we have defaulted to the first in, first out

(FIFO) method. Please visit our website or consult your tax advisor if you need additional information about cost basis. If you do not keep in contact with us or do not have any activity in your account for the time periods specified by state

law, your property could become subject to state unclaimed property laws and transferred to the appropriate state.

EXHIBIT 4.2

Execution Copy

FACEBOOK, INC.

SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT

This Sixth Amended and Restated Investors’ Rights Agreement (the “ Agreement ”) is made as of December 27, 2010 by and among Facebook, Inc., a Delaware corporation (the “ Company ”), the holders of the Company’s Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock, Series E Preferred Stock and other capital stock set forth on Exhibit A to this Agreement (the “ Investors ”).

RECITALS

A. The Company and certain of the Investors have previously entered into that certain Fifth Amended and Restated Investors’ Rights Agreement dated as of November 20, 2009 (the “ Prior Rights Agreement ”), pursuant to which the Company granted the Investors certain rights.

B. The undersigned Investors, holding a majority of the outstanding “Registrable Securities” (as defined in the Prior Rights Agreement), desire to amend and restate in its entirety the Prior Rights Agreement and to accept the rights and obligations created pursuant hereto in lieu of the rights and obligation under the Prior Rights Agreement.

AGREEMENT

The parties hereby agree as follows:

1. Amendments of Prior Rights Agreement . Effective and contingent upon execution of this Agreement by the Company and the holders of a majority of the Registrable Securities, the Prior Rights Agreement is hereby amended and restated in its entirety to read as set forth in this Agreement, and the Company and the Investors hereby agree to be bound by the provisions hereof as the sole agreement of the Company and the Investors with respect to registration rights of the Company’s securities and certain other rights, as set forth herein

2. Registration Rights . The Company and the Investors covenant and agree as follows:

2.1 Definitions . For purposes of this Section 2:

(a) The term “ Affiliated Fund ” means, with respect to a Holder that is a limited liability company or a limited liability partnership, a fund or entity managed by the same manager or managing member or general partner or management company or by an entity controlling, controlled by, or under common control with such manager or managing member or general partner or management company;

(b) The term “ Exchange Act ” means the Securities Exchange Act of 1934, as amended (and any successor thereto), and the rules and regulations promulgated thereunder;


(c) The term “ Form S-3 ” means such form under the Securities Act as in effect on the date hereof or any successor form under the Securities Act that permits significant incorporation by reference of the Company’s subsequent public filings under the Exchange Act;

(d) The term “ Holder ” means any person owning or having the right to acquire Registrable Securities or any assignee thereof in accordance with Section 2.12 of this Agreement;

(e) The term “ Major Investor ” means any person who holds at least 20% of the Series A Preferred Stock or Series B Preferred Stock, or the Class B Common Stock issued upon conversion thereof (or the Class A Common Stock issued upon conversion of such Class B Common Stock). A Major Investor includes any general partners, managing members and affiliates of a Major Investor, including Affiliated Funds;

(f) The term “ Qualified IPO ” means the closing of a firm commitment underwritten public offering by the Company of shares of its Class A Common Stock pursuant to a registration statement under the Securities Act of 1933, as amended, which results in aggregate cash proceeds to the Company of U.S.$100,000,000 (net of underwriting discounts and commissions);

(g) The terms “ register ,” “ registered ,” and “ registration ” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Securities Act, and the declaration or ordering of effectiveness of such registration statement or document;

(h) The term “ Registrable Securities ” means (i) the shares of Class A Common Stock issuable or issued upon conversion of the Class B Common Stock issuable or issued upon conversion of the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock or Series E Preferred Stock, other than shares for which registration rights have terminated pursuant to Section 2.15 hereof, (ii) with respect to Mail.ru Group Limited (f/k/a Digital Sky Technologies Limited), DST Global Limited or DST USA Limited (collectively, “ DST ”), “Registrable Securities” shall also include all other Class A Common Stock held by or shares of Class A Common Stock issuable upon conversion of shares of Class B Common Stock held by DST (other than the shares listed in (i) above), (iii) with respect to The Goldman Sachs Group, Inc., Goldman Sachs Investment Partners Private Opportunities Holdings, L.P., Goldman Sachs Investment Partners Master Fund, L.P. and the Additional Investors (as defined in that certain Class A Common Stock Purchase Agreement, dated as of December 27, 2010 (the “ Class A Common Purchase Agreement ”), between the Company and the Purchasers (as defined therein)) (such Purchasers collectively, other than DST, the “ Goldman Entities ”), “Registrable Securities” shall also include all shares of Class A Common Stock issued to the Goldman Entities pursuant to the Class A Common Purchase Agreement and all other shares of Class A Common Stock held by the Goldman Entities, and (iv) any other shares of Class A Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution with respect to, or in exchange for or in replacement of, the shares listed in (i), (ii) and (iii) above; provided , however , that the foregoing definition shall exclude (x) in all cases

 

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any Registrable Securities sold by a person in a transaction in which his, her or its rights under this Agreement are not assigned and (y) for purposes of Section 2.2(a) (Request for Registration), Section 2.13 (Limitations on Subsequent Registration Rights) and Section 4.4 (Amendments and Waivers), any of the shares listed in (ii) above and, to the extent the shares are attributable to (ii) above, the shares listed in (iv) above. Notwithstanding the foregoing, Class A Common Stock or other securities shall only be treated as Registrable Securities if and so long as (A) they have not been sold to or through a broker or dealer or underwriter in a public distribution or a public securities transaction, (B) they have not been sold in a transaction exempt from the registration and prospectus delivery requirements of the Securities Act under Section 4(1) thereof so that all transfer restrictions, and restrictive legends with respect thereto, if any, are removed upon the consummation of such sale, or (C) the Holder thereof is entitled to exercise any right provided in Section 2 in accordance with Section 2.15 below;

(i) The number of shares of “ Registrable Securities then outstanding ” shall be determined by the number of shares of Class A Common Stock outstanding which are, and the number of shares of Class A Common Stock issuable pursuant to then exercisable or convertible securities which are, Registrable Securities;

(j) The term “ SEC ” means the Securities and Exchange Commission; and

(k) The term “ Securities Act ” means the Securities Act of 1933, as amended (and any successor thereto), and the rules and regulations promulgated thereunder.

2.2 Request for Registration .

(a) If the Company shall receive at any time after the earlier of (i) April 17, 2013 or (ii) six months after the effective date of the Qualified IPO, a written request from the Holders of a majority of the Registrable Securities then outstanding (the “ Initiating Holders ”) that the Company file a registration statement under the Securities Act covering the registration of Registrable Securities with an anticipated aggregate offering price of at least U.S.$10 million, then the Company shall, within 20 days of receiving such request, give written notice of such request to all Holders and shall, subject to the limitations of subsection 2.2(b), use all commercially reasonable efforts to effect a registration statement under the Securities Act covering all Registrable Securities which the Holders request to be registered within 20 days of the mailing of such notice by the Company.

(b) If the Initiating Holders intend to distribute the Registrable Securities covered by their request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.2 and the Company shall include such information in the written notice referred to in subsection 2.2(a). The underwriter will be selected by the Company, which underwriter shall be reasonably acceptable to a majority in interest of the Holders whose Registrable Securities are to be included in the underwriting. In such event, the right of any Holder to include his Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. The

 

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Company and all Holders proposing to distribute their securities through such underwriting shall (together with the Company as provided in subsection 2.5(e)) enter into an underwriting agreement in customary form with the underwriter or underwriters selected for such underwriting. Notwithstanding any other provision of this Section 2.2, if the underwriter advises the Company in good faith that marketing factors require a limitation of the number of shares to be underwritten, then the Company shall so advise all Holders of Registrable Securities which would otherwise be underwritten pursuant hereto, and the number of shares of Registrable Securities that may be included in the underwriting shall be allocated among all participating Holders thereof, including the Initiating Holders, in proportion (as nearly as practicable) to the amount of Registrable Securities of the Company owned by each participating Holder. In no event shall any Registrable Securities be excluded from such underwriting unless all other securities are first excluded from such offering. Any Registrable Securities excluded from or withdrawn from such underwriting shall be withdrawn from registration.

(c) Notwithstanding the foregoing, if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 2.2, a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its stockholders for such registration statement to be filed, the Company shall have the right to defer such filing for a period of not more than 120 days after receipt of the request of the Initiating Holders; provided , however , that the Company may not utilize this right more than once in any twelve-month period, and provided, further , that the Company shall not register any securities for the account of itself or any other stockholder during such 120-day period (other than in a Qualified IPO, a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Securities Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of Registrable Securities or a registration in which the only Class A Common Stock being registered is Class A Common Stock issuable upon conversion of debt securities which are also being registered).

(d) In addition, the Company shall not be obligated to effect, or to take any action to effect, any registration pursuant to this Section 2.2:

(i) After the Company has effected 3 registrations pursuant to this Section 2.2 and such registrations have been declared or ordered effective;

(ii) During the period starting with the date 60 days prior to the Company’s good faith estimate of the date of filing of, and ending on a date 90 days after the effective date of, a registration subject to Section 2.3 hereof, unless such offering is the initial public offering of the Company’s securities, in which case, ending on a date 180 days after the effective date of such registration subject to Section 2.3 hereof; provided that the Company is actively employing in good faith all commercially reasonable efforts to cause such registration statement to become effective;

(iii) If the Initiating Holders propose to dispose of shares of Registrable Securities that may be immediately registered on Form S-3 pursuant to a request made pursuant to Section 2.4 below; or

 

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(iv) In any jurisdiction in which the Company would be required to qualify to do business or execute a general consent to service of process in effecting such registration, unless the Company is already qualified to do business or subject to service of process in such jurisdiction.

2.3 Company Registration .

(a) If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the Company for stockholders other than the Holders) any of its stock under the Securities Act in connection with the public offering of such securities solely for cash (other than a registration relating solely to the sale of securities to participants in a Company stock plan or a transaction covered by Rule 145 under the Securities Act, a registration in which the only stock being registered is Class A Common Stock issuable upon conversion of debt securities which are also being registered, or any registration on any form which does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities), the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder given within 20 days after mailing of such notice by the Company in accordance with Section 4.5, the Company shall, subject to the provisions of Section 2.8, use all commercially reasonable efforts to cause to be registered under the Securities Act all of the Registrable Securities that each such Holder has requested to be registered.

(b) The Company shall have the right to terminate or withdraw any registration initiated by it under this Section 2.3 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The expense of such registration shall be borne by the Company, in accordance with Section 2.7 hereof.

2.4 Form S-3 Registration . If the Company shall receive from any Holder or Holders of not less than 30% of the Registrable Securities then outstanding, a written request or requests that the Company effect a registration on Form S-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company will:

(a) promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders; and

(b) use all commercially reasonable efforts to effect, as soon as practicable, such registration and all such qualifications and compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holder’s or Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable Securities of any other Holder or Holders joining in such request as are specified in a written request given within 15 days after receipt of such written notice from the Company; provided , however , that the Company shall not be obligated to effect any such registration, qualification or compliance, pursuant to this Section 2.4: (i) if Form S-3 is not available for such offering by the Holders; (ii) if the Holders, together with the holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public of less

 

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than U.S.$2,000,000; (iii) if the Company shall furnish to the Holders a certificate signed by the President of the Company stating that in the good faith judgment of the Board of Directors of the Company, it would be seriously detrimental to the Company and its holders of capital stock for such Form S-3 Registration to be effected at such time, in which event the Company shall have the right to defer the filing of the Form S-3 registration statement for a period of not more than 120 days after receipt of the request of the Holder or Holders under this Section 2.4; provided , however , that the Company shall not utilize this right more than once in any 12-month period; and provided, further , that the Company shall not register any securities for the account of itself or any other stockholder during such 120-day period (other than in a Qualified IPO, a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Securities Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of Registrable Securities or a registration in which the only Class A Common Stock being registered is Class A Common Stock issuable upon conversion of debt securities which are also being registered); (iv) if the Company has, within the 12-month period preceding the date of such request, already effected two registrations on Form S-3 for the Holders pursuant to this Section 2.4; (v) in any jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance unless the Company is already qualified to do business or subject to service of process in that jurisdiction; (vi) during the period ending 180 days after the effective date of a registration statement subject to Section 2.3; or (vii) the Company has previously effected a total of 4 such S-3 registrations pursuant to this Section 2.4.

(c) Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so requested to be registered as soon as practicable after receipt of the request or requests of the Holders. Registrations effected pursuant to this Section 2.4 shall not be counted as demands for registration or registrations effected pursuant to Sections 2.2 or 2.3, respectively.

2.5 Obligations of the Company . Whenever required under this Section 2 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible:

(a) Prepare and file with the SEC a registration statement with respect to such Registrable Securities and use all commercially reasonable efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for up to 120 days, or until the distribution described in such registration statement is completed, if earlier.

(b) Prepare and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement for up to 120 days, or until the distribution described in such registration statement is completed, if earlier.

 

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(c) Furnish to the Holders such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the Securities Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them.

(d) Use all commercially reasonable efforts to register and qualify the securities covered by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to qualify to do business or to file a general consent to service of process in any such states or jurisdictions unless the Company is already qualified to do business or subject to service of process in that jurisdiction.

(e) In the event of any underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering. Each Holder participating in such underwriting shall also enter into and perform its obligations under such an agreement.

(f) Notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, such obligation to continue for 120 days, and following such notification, and subject to the provisions of this Agreement, promptly prepare and furnish to seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such shares, such prospectus shall not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or incomplete in light of the circumstances then existing.

(g) Cause all such Registrable Securities registered pursuant to this Section 2 to be listed on each national securities exchange or trading system on which similar securities issued by the Company are then listed.

(h) Provide a transfer agent and registrar for all Registrable Securities registered pursuant hereunder and a CUSIP number for all such Registrable Securities, in each case not later than the effective date of such registration.

(i) Use its commercially reasonable efforts to furnish, on the date that such Registrable Securities are delivered to the underwriters for sale, if such securities are being sold through underwriters, (i) an opinion, dated as of such date, of the counsel representing the Company for the purposes of such registration, in form and substance as is customarily given to underwriters in an underwritten public offering, addressed to the underwriters, if any, and (ii) a “comfort” letter dated as of such date, from the independent certified public accountants of the Company, in form and substance as is customarily given by independent certified public accountants to underwriters in an underwritten public offering, addressed to the underwriters.

 

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2.6 Information From Holders . It shall be a condition precedent to the obligations of the Company to take any action pursuant to this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of such securities as shall be required to effect the registration of such Holder’s Registrable Securities. The Company shall have no obligation with respect to any registration requested pursuant to Section 2.2 or Section 2.4 of this Agreement if, as a result of the application of the preceding sentence, the anticipated aggregate offering price of the Registrable Securities to be included in the registration does not equal or exceed the anticipated aggregate offering price required to originally trigger the Company’s obligation to initiate such registration as specified in subsection 2.2(a) or subsection 2.4(b)(ii), whichever is applicable.

2.7 Expenses of Registration . All expenses other than underwriting discounts and commissions incurred in connection with registrations, filings or qualifications pursuant to Sections 2.2, 2.3 and 2.4 including (without limitation) all registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company, and the reasonable fees and disbursements of one counsel for the selling Holders, not to exceed U.S.$25,000, selected by them with the approval of the Company, which approval shall not be unreasonably withheld, shall be borne by the Company; provided , however , that the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Sections 2.2 or 2.4 if the registration request is subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders shall bear such expenses), unless the Holders of a majority of the Registrable Securities agree to forfeit their right to one registration pursuant to Section 2.2 or Section 2.4, as applicable.

2.8 Underwriting Requirements . In connection with any offering involving an underwriting of shares of the Company’s capital stock, the Company shall not be required under Section 2.3 to include any of the Holders’ securities in such underwriting unless they accept the terms of the underwriting as agreed upon between the Company and the underwriters selected by the Company (or by other persons entitled to select the underwriters), and then only in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities requested by stockholders to be included in such offering under Section 2.3, exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only that number of such securities, including Registrable Securities, which the underwriters determine in their sole discretion will not jeopardize the success of the offering (the securities so included to be apportioned pro rata among the selling stockholders according to the total amount of securities entitled to be included therein owned by each selling stockholder or in such other proportions as shall mutually be agreed to by such selling stockholders) but in no event shall the amount of securities of the selling Holders included in the offering be reduced below 30% of the total amount of securities included in such offering, unless such offering is the initial public offering of the Company’s securities, in which case, the selling stockholders may be excluded if the underwriters make the

 

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determination described above and no other stockholder’s securities are included. For purposes of the preceding parenthetical concerning apportionment, for any selling stockholder which is a holder of Registrable Securities and which is a venture capital fund, or a partnership or corporation, the Affiliated Funds, partners, retired partners and stockholders of such holder, or the estates and family members of any such partners and retired partners and any trusts for the benefit of any of the foregoing persons shall be deemed to be a single “ selling stockholder ,” and any pro-rata reduction with respect to such “selling stockholder” shall be based upon the aggregate amount of shares carrying registration rights owned by all entities and individuals included in such “selling stockholder,” as defined in this sentence.

2.9 Delay of Registration . No Holder shall have any right to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2.

2.10 Indemnification . In the event any Registrable Securities are included in a registration statement under this Section 2:

(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, each of its officers, directors, members, partners, any underwriter (as defined in the Securities Act) for such Holder and each person, if any, who controls such Holder or underwriter within the meaning of the Securities Act or the Exchange Act, against any losses, claims, damages, liabilities or actions, as such expenses are incurred, (joint or several) to which they may become subject under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a “ Violation ”): (i) any untrue statement or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the Securities Act, the Exchange Act or any state securities law; and the Company will pay to each such Holder, underwriter or controlling person, as incurred, any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided , however , that the indemnity agreement contained in this subsection 2.10(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of the Company (which consent shall not be unreasonably withheld, delayed or conditioned), nor shall the Company be liable to any Holder, underwriter or controlling person for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a Violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by any such Holder, underwriter or controlling person.

(b) To the extent permitted by law, each selling Holder will indemnify and hold harmless the Company, each of its directors, each of its officers who has signed the registration statement, each person, if any, who controls the Company within the

 

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meaning of the Securities Act, any underwriter, any other Holder selling securities in such registration statement and any controlling person of any such underwriter or other Holder, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the Securities Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder expressly for use in connection with such registration; and each such Holder will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this subsection 2.10(b), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided , however , that the indemnity agreement contained in this subsection 2.10(b) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of the Holder, which consent shall not be unreasonably withheld, delayed or conditioned; provided , that in no event shall any indemnity under this subsection 2.10(b) exceed the net proceeds from the offering received by such Holder.

(c) Promptly after receipt by an indemnified party under this Section 2.10 of notice of the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 2.10, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided , however , that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel, with the reasonable fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 2.10, but the omission to deliver written notice to the indemnifying party will not relieve it of any liability that it may have to any indemnified party otherwise than under this Section 2.10.

(d) If the indemnification provided for in this Section 2.10 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage, or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and of the indemnified party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense as well as any other relevant equitable considerations; provided , that in no event shall any contribution by a Holder under this Subsection 2.10(d) exceed the net proceeds from the offering received by such Holder. The relative fault of the indemnifying party and of the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material

 

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fact or the omission or the alleged omission to state a material fact relates to information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or omission.

(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control.

(f) The obligations of the Company and Holders under this Section 2.10 shall survive the completion of any offering of Registrable Securities in a registration statement under this Section 2, and otherwise.

2.11 Reports Under the Exchange Act . With a view to making available to the Holders the benefits of Rule 144 promulgated under the Securities Act and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public without registration or pursuant to a registration on Form S-3, the Company agrees to:

(a) make and keep public information available, as those terms are understood and defined in SEC Rule 144, at all times after 90 days after the effective date of the Qualified IPO so long as the Company remains subject to the periodic reporting requirements under Sections 13 or 15(d) of the Exchange Act;

(b) take such action, including the voluntary registration of its Class A Common Stock under Section 12 of the Exchange Act, as is necessary to enable the Holders to utilize Form S-3 for the sale of their Registrable Securities, such action to be taken as soon as practicable after the end of the fiscal year in which the first registration statement filed by the Company for the offering of its securities to the general public is declared effective;

(c) file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and

(d) furnish to any Holder upon request, so long as the Holder owns any Registrable Securities, (i) a written statement by the Company that it has complied with the reporting requirements of SEC Rule 144 (at any time after 90 days after the effective date of the Qualified IPO), the Securities Act and the Exchange Act (at any time after it has become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested in availing any Holder of any rule or regulation of the SEC which permits the selling of any such securities without registration or pursuant to such form.

2.12 Assignment of Registration Rights . The rights to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of at least 20% of the Registrable Securities originally purchased by such Holder (or all of such Holder’s shares, if

 

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less), provided the Company is, within a reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; and provided , further , that such assignment shall be effective only if the transferee agrees to be bound by this Agreement and immediately following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Securities Act. For the purposes of determining the number of shares of Registrable Securities held by a transferee or assignee, the holdings of transferees and assignees of (x) a partnership who are partners or retired partners of such partnership or (y) a limited liability company who are members or retired members of such limited liability company (including Immediate Family Members of such partners or members who acquire Registrable Securities by gift, will or intestate succession) shall be aggregated together and with the partnership or limited liability company; provided that all assignees and transferees who would not qualify individually for assignment of registration rights shall have a single attorney-in-fact for the purpose of exercising any rights, receiving notices or taking any action under Section 2. Notwithstanding the foregoing, for the purpose of this Section 2.12, the transfer of registration rights to a partner or affiliate of the transferee will be without restrictions as to minimum shareholdings.

2.13 Limitations on Subsequent Registration Rights . From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders of a majority of the outstanding Registrable Securities, enter into any agreement with any holder or prospective holder of any securities of the Company giving such holder or prospective holder any registration rights, the terms of which are pari passu with or senior to the registration rights granted to the Holders hereunder.

2.14 Lock-Up Agreement .

(a) Lock-Up Period; Agreement . In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing such offering of the Company’s securities, each Holder agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company, however or whenever acquired (other than those included in the registration), without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days) from the effective date of such registration statement; provided however that, if during the last 17 days of the restricted period the Company issues an earnings release or material news or a material event relating to the Company occurs, or prior to the expiration of the restricted period the Company announces that it will release earnings results during the 16-day period beginning on the last day of the restricted period, and if the Company’s securities are listed on the Nasdaq Stock Market and Rule 2711 of thereof applies (or any applicable FINRA successor rule thereto), then the restrictions imposed by this Section 2.14(a) shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event. In no event will the restricted period extend beyond 215 days after the effective date of the registration statement. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply to all Holders subject to such agreements pro rata based on the number of shares subject to such agreements.

 

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(b) Limitations . The obligations described in Section 2.14(a) shall apply only if all officers and directors of the Company and all 1% or greater stockholders enter into similar agreements with periods of at least up to 180 days (subject to any extension described above), and shall not apply to a registration relating solely to employee benefit plans, or to a registration relating solely to a transaction pursuant to Rule 145 under the Securities Act.

(c) Stop-Transfer Instructions . In order to enforce the foregoing covenants, the Company may impose stop-transfer instructions with respect to the securities of each Holder (and the securities of every other person subject to the restrictions in Section 2.14(a)).

(d) Transferees Bound . Each Holder agrees that it will not transfer securities of the Company unless each transferee agrees in writing to be bound by all of the provisions of this Section 2.14.

2.15 Termination of Registration Rights . No Holder shall be entitled to exercise any right provided for in this Section 2 after the earlier of (i) 5 years following the consummation of a Qualified IPO, (ii) with respect to any Holder, at such time after the Qualified IPO as Rule 144 or another similar exemption under the Securities Act is available for the sale of all of such Holder’s shares during a three-month period without registration and if such shares then held by such Holder constitute less than one percent (1%) of the Company’s outstanding equity securities, or (iii) upon termination of the Agreement, as provided in Section 4.1.

3. Covenants of the Company .

3.1 Delivery of Financial Statements . Upon written request the Company shall deliver to each Major Investor (other than a Major Investor reasonably deemed by the Company to be a competitor of the Company):

(a) as soon as practicable, but in any event within 120 days after the end of each fiscal year of the Company, an income statement for such fiscal year, a balance sheet of the Company and statement of stockholder’s equity as of the end of such year, and a statement of cash flows for such year, such year-end financial reports to be in reasonable detail and audited and certified by an independent public accounting firm of nationally recognized standing when and if, in consultation with the Company’s Board of Directors, the Company otherwise engages an auditor to conduct such audits;

(b) as soon as practicable, but in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Company, a profit or loss statement, a statement of cash flows for such fiscal quarter and a balance sheet as of the end of such fiscal quarter, such quarterly reports will be audited when and if the Company otherwise engages an auditor to conduct such audits;

(c) within 30 days of the end of each month, an unaudited income statement and a statement of cash flows and balance sheet for and as of the end of such month, in reasonable detail; and

 

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(d) as soon as practicable, but in any event prior to the end of each fiscal year, a budget and business plan for the next fiscal year, prepared on a monthly basis, and, as soon as prepared, any other updated or revised budgets for such fiscal year prepared by the Company.

In addition, the Company shall make the deliveries set forth in Section 3.1(a) and (b) to Microsoft Corporation, DST and the Goldman Entities in the time set forth in such Sections if requested by either such party.

3.2 Inspection . The Company shall permit each Major Investor (except for a Major Investor reasonably deemed by the Company, in consultation with the Company’s Board of Directors, to be a competitor of the Company), at such Major Investor’s expense, to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at such reasonable times as may be requested by the Major Investor, provided , however , that the Company shall not be obligated pursuant to this Section 3.2 to provide access to any information which it reasonably considers to be a trade secret or similar confidential information.

3.3 Right of First Offer . Subject to the terms and conditions specified in this Section 3.3, the Company hereby grants to each Major Investor, DST and the Goldman Entities (each, a “ First Offeree ”) a right of first offer with respect to future sales by the Company of its Shares (as hereinafter defined). For purposes of this Section 3.3, First Offeree includes any general partners, managing members and affiliates of a First Offeree, including Affiliated Funds. A First Offeree who chooses to exercise the right of first offer may designate as purchasers under such right itself or its partners or affiliates, including Affiliated Funds, in such proportions as it deems appropriate; provided , however , that neither DST nor any of the Goldman Entities may assign such right to any other party, including its affiliates, stockholders, partners, former partners, members or former members, without the Company’s prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned. For clarification purposes, the assignment of the right of first offer described in this Section 3.3 by DST to a Person (as defined below) reasonably deemed by the Company to be under the Control (as defined below) of Yuri Milner and/or Gregory Finger. Each time the Company proposes to offer any shares of, or securities convertible into or exercisable for any shares of, any class of its capital stock (“ Shares ”), the Company shall first make an offering of such Shares to each First Offeree in accordance with the following provisions:

(a) The Company shall deliver a notice (the “ RFO Notice ”) to each First Offeree stating (i) its bona fide intention to offer such Shares, (ii) the number of such Shares to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such Shares.

(b) Within 15 calendar days after delivery of the RFO Notice, each First Offeree may elect to purchase or obtain, at the price and on the terms specified in the RFO Notice, up to that portion of such Shares which equals the proportion that the number of shares of Class A Common Stock issued and held, or issuable upon conversion and exercise of all convertible or exercisable securities then held, by such First Offeree bears to the total number of shares of Class A Common Stock outstanding immediately prior to the issuance of the Shares (assuming full conversion of the Shares and exercise of all outstanding convertible securities,

 

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rights, options and warrants). Such purchase shall be completed at the same closing as that of any third party purchasers or at an additional closing thereunder. The Company shall promptly, in writing, inform each First Offeree that purchases all the shares available to it (each, a “ Fully-Exercising Investor ”) of any other First Offeree’s failure to do likewise. During the 10-day period commencing after receipt of such information, each Fully-Exercising Investor shall be entitled to obtain that portion of the Shares for which First Offerees were entitled to subscribe but which were not subscribed for by the First Offerees that is equal to the proportion that the number of shares of Class A Common Stock issued and held, or issuable upon conversion and exercise of all convertible or exercisable securities then held, by such Fully-Exercising Investor bears to the total number of shares of Class A Common Stock then held by all Fully-Exercising Investors (assuming full conversion and exercise of all convertible or exercisable securities).

(c) The Company may, during the 45-day period following the expiration of the period provided in subsection 3.3(b) hereof, offer the remaining unsubscribed portion of the Shares to any person or persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the RFO Notice. If the Company does not enter into an agreement for the sale of the Shares within such period, or if such agreement is not consummated within 60 days of the execution thereof, the right provided hereunder shall be deemed to be revived and such Shares shall not be offered unless first reoffered to the First Offerees in accordance herewith.

(d) The right of first offer in this Section 3.3 shall not be applicable to Exempted Securities (as defined in the Company’s certificate of incorporation, as may be amended from time to time (the “ Restated Certificate ”)). In addition to the foregoing, the right of first offer in this Section 3.3 shall not be applicable with respect to any First Offeree and any subsequent securities issuance, if (i) at the time of such subsequent securities issuance, the First Offeree is not an “accredited investor,” as that term is then defined in Rule 501(a) under the Securities Act, and (ii) such subsequent securities issuance is otherwise being offered only to accredited investors.

(e) For purposes of this Section 3.3:

(i) “ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the policies, whether through the ownership or possession of voting securities, the right to nominate the majority of the senior executive management, by contract or otherwise.

(ii) “ Person ” means any company, corporation, limited liability company, general partnership, limited partnership, limited liability partnership, trust, estate, proprietorship, joint venture, or business organization.

3.4 Termination of Covenants .

(a) The covenants set forth in Sections 3.1, 3.2 and 3.3 shall terminate as to each Holder and be of no further force or effect (i) immediately prior to the consummation of a Qualified IPO, or (ii) upon termination of the Agreement, as provided in Section 4.1.

 

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(b) The covenants set forth in Sections 3.1 and 3.2 shall terminate as to each Holder and be of no further force or effect when the Company first becomes subject to the periodic reporting requirements of Sections 13 or 15(d) of the Exchange Act, if this occurs earlier than the events described in Section 3.4(a) above.

4. Miscellaneous .

4.1 Termination . This Agreement shall terminate, and have no further force and effect, when the Company shall consummate a transaction or series of related transactions deemed to be a Liquidation Transaction (as defined in Restated Certificate).

4.2 Entire Agreement . This Agreement constitutes the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to the subject matter hereof existing between the parties hereto are expressly canceled.

4.3 Successors and Assigns . Except as otherwise provided in this Agreement, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective permitted successors and assigns of the parties (including transferees of any Registrable Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

4.4 Amendments and Waivers . Any term of this Agreement may be amended or waived only with the written consent of (1) the Company and (2) the holders of at least a majority of the Registrable Securities then outstanding; provided that any amendment or waiver of (a) Section 2.1(h)(iii), (b) Section 3.1 that affects the Goldman Entities, (c) the proviso in the third sentence of the introductory paragraph in Section 3.3 that affects the Goldman Entities, (d) Section 4.4 that affects the Goldman Entities, (e) Section 4.12(iv) that affects the Goldman Entities or (f) Section 4.12(v) shall in each case also require the consent of each of the Goldman Entities with respect to the shares of Class A Common Stock issued pursuant to the Class A Common Purchase Agreement and then held by each such entity; provided further that any waiver of Section 3.3 that adversely and disproportionately affects the Goldman Entities as compared to the other First Offerees shall also require the consent of each of the Goldman Entities with respect to the shares of Class A Common Stock issued pursuant to the Class A Common Purchase Agreement and then held by each such entity. Notwithstanding the foregoing, this Agreement may be amended with only the written consent of the Company for the sole purpose of (x) including as “Investors” (1) any permitted transferees pursuant to Sections 2.12, 2.14(d) and/or 4.3 of this Agreement, provided that such permitted transferees become signatories to this Agreement and (2) any additional holders of the Company’s Class A Common Stock issued pursuant to the Class A Common Purchase Agreement or (y) updating the Exhibit A to this Agreement to reflect changes in the composition of the Investors. Any amendment or waiver effected in accordance with this paragraph shall be binding upon each party to the Agreement, whether or not such party has signed such amendment or waiver, each future holder of all such Registrable Securities, and the Company.

 

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4.5 Notices . Unless otherwise provided, any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient upon delivery, when delivered personally or by overnight courier or sent by facsimile, or 48 hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address or facsimile number as set forth on Exhibit A hereto or as subsequently modified by written notice delivered in accordance with this Section 4.5.

4.6 Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement, and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.

4.7 Governing Law . This Agreement and all acts and transactions pursuant hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of laws.

4.8 Dispute Resolution . The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the federal or state courts located in the Northern District of California for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the federal or state courts located in the Northern District of California, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

4.9 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

4.10 Titles and Subtitles . The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

4.11 Aggregation of Stock . All shares of the Preferred Stock or Common Stock held or acquired by affiliated entities or persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement.

4.12 Confidentiality . Each Investor agrees that it will keep confidential and will not disclose or use for any purpose any information about the terms of the Agreement and the transactions contemplated hereby, unless any such information (a) is known or becomes known to the public in general (other than as a result of a breach of the Agreement by the disclosing party) or (b) is or has been made known or disclosed to the disclosing party by a third party without breach of any confidentiality obligations by such third party; provided , however , that an Investor may disclose such information (i) to its attorneys, accountants,

 

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consultants, and other professionals to the extent necessary to obtain their services in connection with the ownership of shares of capital stock of the Company; (ii) to any affiliate in the ordinary course of business, provided that such affiliate agrees to maintain the confidentiality of such information in accordance herewith; (iii) as reasonably required to fulfill its obligations hereunder; (iv) as permitted under that certain Side Letter, dated as of December 27, 2010, by and among the Company, Goldman Sachs & Co. and Goldman Sachs International or (v) as may be required by law or regulation, provided that with respect to clause (v) above, to the extent permissible, the disclosing party promptly notifies the Company in advance of such disclosure and agrees to cooperate to take reasonable steps to minimize the extent of any such required disclosure.

[Signature Pages Follow]

 

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The parties have executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

COMPANY:
FACEBOOK, INC.
By:  

/s/ David Ebersman

  David Ebersman, Chief Financial Officer

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The parties have executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

INVESTORS

Accel IX L.P.

By: Accel IX Associates L.L.C.

Its General Partner

By:

 

/s/ Richard Zamboldi

Attorney in Fact

 

Accel IX Strategic Partners L.P.

By: Accel IX Associates L.L.C.
Its General Partner
By:  

/s/ Richard Zamboldi

Attorney in Fact

 

Accel Investors 2005 L.L.C.
By:  

/s/ Richard Zamboldi

Attorney in Fact

/s/ James W. Breyer

James W. Breyer, Trustee of James W. Breyer

2005 Trust dated March 25, 2005

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The parties have executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

INVESTORS

Accel Growth Fund L.P.

By: Accel Growth Fund Associates L.L.C.

Its General Partner

By:

 

/s/ Richard Zamboldi

Attorney in Fact

 

Accel Growth Fund Strategic Partners L.P.
By: Accel Growth Fund Associates L.L.C.

Its General Partner

By:  

/s/ Richard Zamboldi

Attorney in Fact

 

Accel Growth Fund Investors 2009 L.L.C.
By:  

/s/ Richard Zamboldi

Attorney in Fact

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The parties have executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

INVESTORS

Rivendell One LLC

By:  

/s/ Nathan Linn

Name:   Nathan Linn
Title:   Manager

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The parties have executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

INVESTOR
Mail.ru Group Limited (f/k/a Digital Sky Technologies Limited)
By:  

/s/ Alexander Tamas

Name:   Alexander Tamas
Title:   Managing Director

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The parties have executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

INVESTOR
DST Global Limited
By:  

/s/ Sean Hogan

Name:   Sean Hogan
Title:   Director

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The parties have executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

INVESTOR
DST USA Limited
By:  

/s/ Sean Hogan

Name:   Sean Hogan
Title:   Director

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The parties have executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date first above written.

 

INVESTORS

The Goldman Sachs Group, Inc.

By:  

/s/ Liz Robinson

Name:   Liz Robinson

Title:

  Treasurer

 

Goldman Sachs Investment Partners Private
Opportunities Holdings, L.P.

By:

  Goldman Sachs Investment Partners Private Opportunities Holdings Advisors, Inc., its General Partner

By:

 

/s/ Raanan A. Agus

Name:

  Raanan A. Agus

Title:

  Authorized Signatory

 

Goldman Sachs Investment Partners Master

Fund, L.P.

By:   Goldman Sachs Investment Partners GP, LLC, its General Partner
By:  

/s/ Raanan A. Agus

Name:   Raanan A. Agus
Title:   Authorized Signatory

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The Investor below has executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date set forth below:

 

INVESTOR:
KPCB Holdings, Inc., as nominee
By:  

/s/ Eric Keller

Its:   President

 

Date of Execution:  

January 19, 2011

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The Investor below has executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date set forth below.

 

INVESTOR:

FBDC Investors Offshore Holdings, L.P.
By:   FBDC Advisors Offshore, Inc.
By:  

/s/ Kenneth M. Eberts III

Name:   Kenneth M. Eberts III
Title:   Authorized Signatory

 

Date of Execution:  

January 21, 2011

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The investor below has executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date set forth below:

 

INVESTOR:
GA-FB Holdings LLC
By:  

/s/ Thomas J. Murphy

Name:   Thomas J. Murphy
Title:   Managing Director

 

Date of Execution:  

March 17, 2011

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The investor below has executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date set forth below:

 

INVESTOR:
MARK PINCUS, as an individual

/s/ Mark Pincus

 

Date of Execution:  

April 18, 2011

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The Investor below has executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date set forth below.

 

INVESTOR:

DST Global II. L.P.

By:   DST Managers Limited, its general partner
By:  

/s/ Sean Hogan

  Its Authorized Signatory
 

Sean Hogan, Director

  Print Name and Title

 

Effective as of:  

April 27, 2011

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The investor below has executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date set forth below:

 

INVESTOR:

T. ROWE PRICE ASSOCIATES, INC.

In its capacity as registered investment adviser

to certain Investors listed on Exhibit A attached hereto

By:

 

/s/ Darrell N. Braman

Name:

  Darrell N. Braman

Title:

  VP, Managing Counsel

 

Date of Execution:  

October 4, 2011

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The Investor below has executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date set forth below.

 

INVESTOR:

DST USA II Limited

By:  

/s/ Sean Hogan

  Its Authorized Signatory
 

Sean Hogan, Director

 

Print Name and Title

 

Effective as of:  

November 2, 2011

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The Investor below has executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date set forth below.

 

INVESTOR:

DST GLOBAL III, L.P.

By:   DST Managers Limited, its general partner
By:  

/s/ Sean Hogan

  Its Authorized Signatory
  Sean Hogan, Director
  Print Name and Title

 

Effective as of:  

December 20, 2011

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


The parties have executed this Sixth Amended and Restated Investors’ Rights Agreement as of the date written below.

 

INVESTORS

OGDEN ENTERPRISES LLC, a Delaware

limited liability company

By:  

/s/ Mark J. Pincus

Name:   Mark J. Pincus
Title:   Manager
Date:   January 30, 2012

SIGNATURE PAGE TO SIXTH AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT


EXHIBIT A

INVESTORS

 

Accel IX L.P.

Accel IX Strategic Partners L.P.

Accel Investors 2005 L.L.C.

Accel Growth Fund Investors 2009, L.L.C

Accel Growth Fund L.P.

Accel Growth Fund Strategic Partners L.P.

Andreessen Horowitz Fund II, L.P.

Aufklarung LLC

James W. Breyer, Trustee of James W. Breyer 2005

Trust dated March 25, 2005

DST Global Limited

DST Global II, L.P.

DST Global III, L.P.

DST USA Limited

DST USA II Limited

Elevation Partners, L.P.

Elevation Employee Side Fund, LLC

FBDC Investors Offshore Holdings, L.P.

Felarmon Group Limited

The Founders Fund, LP

GA-FB Holdings LLC


 

Glynn Partners, L.P.

The Goldman Sachs Group, Inc.

Goldman Sachs Investment Partners Private Opportunities Holdings, L.P.

Goldman Sachs Investment Partners Master Fund, L.P.

Greylock XII Limited Partnership

Greylock XII-A Limited Partnership

Greylock XII Principals LLC

Reid Hoffman, Trustee of The Reid Hoffman 2011

Annuity Trust u/a/d 6/7/2011

The Interpublic Group of Companies, Inc.

KPCB Holdings, Inc., as nominee

Li Ka Shing (Canada) Foundation

Mail.ru Group Limited (f/k/a Digital Sky

Technologies Limited)

Meritech Capital Partners III L.P.

Meritech Capital Affiliates III L.P.

Microsoft Corporation

Montecito Ventures VI, LLC

Ogden Enterprises LLC

Orrick Investments 2005 LLC

Partner Investments, LP

PFM Select Offshore Fund, Ltd.

Mark Pincus


Anand Rajaraman Revocable Trust of 1998

Rivendell One LLC

William H. Shea, Jr.

TCV Member Fund, L.P.

TCV VII (A), L.P.

TCV VII, L.P.

TCV VI, L.P.

Tiger Global FB Holdings, LLC

Valiant Capital Opportunities, LLC

Venkatesh Harinarayan

Venture Lending & Leasing IV, LLC

Michelle Yee, Trustee of The Michelle Yee 2011

Annuity Trust u/a/d 6/7/2011

EXHIBIT 4.3

FORM OF “TYPE 1” HOLDER VOTING AGREEMENT

This Holder Voting Agreement (the “ Agreement ”) is made as of the    day of                    ,         , by and among Facebook, Inc., a Delaware corporation (f/k/a TheFacebook, Inc., the “ Company ”),                     (the “ Stockholder ”) and Mark Zuckerberg (the “ Proxyholder ”).

RECITALS

The Stockholder holds shares of Common Stock of the Company. This Agreement, among other things, requires the Stockholder to vote all such shares of Common Stock and all shares of capital stock of the Company which such Stockholder currently owns or hereafter acquires or as to which he otherwise exercises voting or dispositive authority (together all such shares referred to in this sentence and any securities of the Company issued with respect to, upon conversion of, or in exchange or substitution of such shares, and any other voting securities of the Company subsequently acquired by the Stockholder, the “ Shares ”) in the manner set forth herein. This agreement is being entered into in exchange for a payment of $100 in cash from the Proxyholder to Stockholder and for other good and valuable consideration, the sufficiency of which is hereby acknowledged and agreed.

AGREEMENT

The parties agree as follows:

1. Voting for the Election of Directors . At each annual meeting of the stockholders of the Company, or at any meeting of the stockholders of the Company at which members of the Board of Directors of the Company are to be elected, or whenever members of the Board of Directors are to be elected by written consent, the Stockholder agrees to vote (in person, by proxy or by action by written consent, as applicable) with respect to all Shares so as to elect the members of the Board of Directors designated in writing by the Proxyholder. At any meeting of the stockholders of the Company at which members of the Board of Directors of the Company are to be removed, or whenever members of the Board of Directors are to be removed by written consent, the Stockholder agrees to vote or act with respect to his Shares so as to remove any director designated in writing by Proxyholder. Notwithstanding the foregoing or anything to the contrary contained herein, to the extent that Stockholder and Proxyholder are both parties (or become parties) to the Voting Agreement between the Company, certain stockholders and investors of the Company, dated as of April 29, 2005, as amended from time to time (the “ Investor Voting Agreement ”), Stockholder agrees to continue to be bound by the Investor Voting Agreement and, to the extent that any provisions of this Agreement conflict with the provisions of the Investor Voting Agreement regarding the election or removal of directors (the “ Director Provisions ”), the Director Provisions (including without limitation any proxies given with respect thereto) shall govern the election and removal of directors under this Agreement. Proxyholder agrees to continue to be bound by the Investor Voting Agreement and shall vote (to the extent Proxyholder holds a proxy) and otherwise act with respect to any Shares as and if required under the Investor Voting Agreement.


2. Voting Agreement On All Matters . Stockholder hereby agrees with respect to all Shares:

(a) In the event that the Proxyholder instructs (or otherwise requests) that Stockholder vote in favor of any Acquisition (an “ Approved Sale ”), any Certificate Amendment and/or any Other Matter, then the Stockholder shall (i) after receiving proper notice of any meeting of stockholders of the Company to vote on the approval of an Approved Sale, a Certificate Amendment and/or Other Matter (or, if no notice is required or such notice is properly waived, after notice from the Proxyholder is given), be present, in person or by proxy, as a holder of Shares at all such meetings and be counted for the purposes of determining the presence of a quorum at such meetings and (ii) vote (in person, by proxy or by action by written consent, as applicable) all Shares as to which the Stockholder has beneficial ownership or as to which he otherwise exercises voting or dispositive authority (A) in favor of such Approved Sale or Certificate Amendment, (B) in the case of an Approved Sale, in opposition of any and all other Acquisitions for which a vote is taken while an Approved Sale is still pending that would reasonably be expected to delay or impair the ability of the Company to consummate such Approved Sale, and (C) in the case of an Other Matter, in the manner directed by the Proxyholder. Notwithstanding the foregoing, in the case of an Approved Sale, the Stockholder shall not be required to assume personal liability greater than the liability assumed by the Proxyholder that continues after the transaction closing for breach of representations, warranties or other obligations except (x) to the extent of the consideration received in the transaction or (y) for liability attributable to fraud or willful misconduct on the part of the Stockholder. The Stockholder shall refrain from exercising any dissenters’ rights, appraisal rights or similar rights under applicable law at any time in connection with such Approved Sale. If the Approved Sale is structured as a sale of the stock of the Company, then the Stockholder hereby agrees to sell and shall sell all of his Shares on the terms and conditions approved by the Proxyholder. Subject to applicable laws, the Stockholder shall take all necessary and desirable actions approved by the Proxyholder in connection with the consummation of the Approved Sale, including the execution of such agreements and such instruments and other actions reasonably necessary to (i) provide the representations, warranties, indemnities, covenants, conditions, escrow agreements and other provisions and agreements relating to such Approved Sale, and (ii) effectuate the allocation and distribution of the aggregate consideration upon consummation of the Approved Sale.

(b) In the event that the Proxyholder instructs (or otherwise requests) that Stockholder vote against any Acquisition (a “ Rejected Sale ”), any Certificate Amendment and/or any Other Matter, then the Stockholder shall (i) after receiving proper notice of any meeting of stockholders of the Company to vote on the Rejected Sale, such Certificate Amendment and/or Other Matter (or, if no notice is required or such notice is properly waived, after notice from the Proxyholder is given), be present, in person or by proxy, as a holder of Shares at all such meetings and be counted for the purposes of determining the presence of a quorum at such meetings and (ii) vote (in person, by proxy or by action by written consent, as applicable) all Shares as to which the Stockholder has beneficial ownership or as to which he otherwise exercises voting or dispositive authority (A) against such Rejected Sale or Certificate Amendment, and (B) in the case of an Other Matter, in the manner directed by the Proxyholder. If the Rejected Sale is structured as a sale of the stock of the Company, then the Stockholder shall not sell any of his Shares unless permitted to sell in writing by the Proxyholder.

(c) Stockholder agrees that, unless Proxyholder provides explicit written instruction to vote Stockholder’s Shares under this Agreement or Proxyholder provides explicit written notice that Stockholder shall be permitted by Proxyholder to vote in a manner other than as Proxyholder instructs, Stockholder shall abstain from voting any of his Shares (in person, by proxy or by action by written consent, as applicable) on all matters.

 

2


(d) In the event of any Transfer by the Stockholder, (i) the Stockholder shall inform the Company and the Proxyholder of such Transfer and (ii) the pledgee, transferee or donee shall furnish the Proxyholder and the Company with a written agreement to be bound by the provisions of this Agreement. Such Transfer shall not be valid unless and until the Company and the Proxyholder receive such written agreement. In the event of any Transfer by the Stockholder, the Stockholder shall inform the Company and the Proxyholder of such Transfer no less than 5 business days prior to such Transfer. Such pledgee, transferee or donee shall be treated as a “Stockholder” for purposes of this Agreement. For avoidance of doubt, the Company shall not permit the transfer of any of the Shares on its books or issue new certificates representing any such Shares unless and until the person(s) to whom such Shares are to be transferred shall have executed the written agreement referred to in this Section 2 and any additional agreement required under any other applicable agreements between the parties hereto.

For purposes of this Section 2:

Acquisition ” shall mean any (i) event that results in a liquidation, dissolution or winding up, or is deemed to be a liquidation, dissolution or winding up of the Company under the Company’s Certificate of Incorporation, as the same may be amended from time to time (the “ Certificate ”) or any (ii) reorganization, consolidation, merger, stock sale, or asset sale of the Company.

Certificate Amendment ” shall mean any amendment of the Certificate.

Other Matter ” shall mean any matter, action, ratification or other event other than an Acquisition or Certificate Amendment for which approval of the holders of the Company’s stock is sought (either by vote or written consent) or upon which such holders are otherwise entitled to vote or consent.

Transfer ” shall mean and include any sale, assignment, encumbrance, hypothecation, pledge, conveyance in trust, gift, transfer by bequest, devise or descent, or other transfer or disposition of any kind, including, but not limited to, transfers to receivers, levying creditors, trustees or receivers in bankruptcy proceedings or general assignees for the benefit of creditors, whether voluntary or by operation of law, directly or indirectly, of any of the Shares.

3. Irrevocable Proxy and Power of Attorney . To secure the Stockholder’s obligations to vote the Shares in accordance with this Agreement and to comply with the other terms hereof, the Stockholder hereby appoints the Proxyholder, or his designees, as such Stockholder’s true and lawful proxy and attorney, with the power to act alone and with full power of substitution, to vote or act by written consent with respect to all of such Stockholder’s Shares in accordance with the provisions set forth in this Agreement, and to execute all appropriate instruments consistent with this Agreement on behalf of such Stockholder. The proxy and power granted by the Stockholder pursuant to this Section are coupled with an interest and are given to secure the performance of such party’s duties under this Agreement. Each such

 

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proxy and power will be irrevocable for the term hereof. The proxy and power, so long as any party hereto is an individual, will survive the death, incompetency and disability of such party or any other individual holder of the Shares and, so long as any party hereto is an entity, will survive the merger, consolidation, conversion or reorganization of such party or any other entity holding any Shares.

4. Additional Representations, Covenants and Agreements .

4.1 No Revocation . The voting agreements contained herein are coupled with an interest and may not be revoked during the term of this Agreement.

4.2 Legends . The Company shall cause each certificate representing shares of the Company’s capital stock held by the Stockholder or any assignee of the Stockholder to bear the following legend:

“THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A VOTING AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY (A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY) WHICH INCLUDES PROVISIONS POTENTIALLY RESTRICTING THE STOCKHOLDER’S RIGHT TO VOTE OR TRANSFER HIS OR ITS ENTIRE INTEREST IN THE SHARES EVIDENCED HEREBY, AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID VOTING AGREEMENT.”

4.3 Stock Splits, Dividends, Etc . In the event of any issuance of Shares of the Company’s voting securities hereafter to any of the parties hereto (including, without limitation, in connection with any stock split, stock dividend, recapitalization, reorganization, or the like), such shares shall automatically become subject to this Agreement and shall be endorsed with the legend set forth in Section 4.2.

4.4 Specific Enforcement . It is agreed and understood that monetary damages would not adequately compensate an injured party for the breach of this Agreement by any party, that this Agreement shall be specifically enforceable, and that any breach or threatened breach of this Agreement shall be the proper subject of a temporary or permanent injunction or restraining order. Further, each party hereto waives any claim or defense that there is an adequate remedy at law for such breach or threatened breach.

4.5 Securities Rules & Relations . The Stockholder agrees and understands that the Stockholder, the Company and/or the Proxyholder may become subject to the registration and/or reporting requirements, rules and regulations of the Exchange Act of 1934, as amended, the Securities Act of 1933, as amended, and/or any state and federal securities laws (collectively, the “ Securities Laws ”). Stockholder agrees to use his best efforts to comply with the Securities Laws and to assist Proxyholder in complying with the Securities Laws in a timely and prompt manner. Such compliance may include, for example and without limiting the foregoing, the filing and updating and maintaining of Form 13G and/or Form 13D under the Exchange Act of 1934, as amended.

 

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4.6 Proxyholder’s Liability . The Proxyholder shall not be liable for any error of judgment nor for any act done or omitted, nor for any mistake of fact or law nor for anything which the Proxyholder may do or refrain from doing in good faith, nor shall the Proxyholder have any accountability hereunder, except for his own bad faith, gross negligence or willful misconduct. Furthermore, upon any judicial or other inquiry or investigation of or concerning the Proxyholder’s acts pursuant to his rights and powers as Proxyholder, such acts shall be deemed reasonable and in the best interests of the Stockholders unless proved to the contrary by clear and convincing evidence.

4.7 Consideration . In connection with this Agreement and as partial consideration for the obligations of Stockholder hereunder, Proxyholder shall pay (by check, cash or other valid consideration) to Stockholder the sum of $100.

4.8 Not In Connection With Employment . Stockholder, the Company and the Proxyholder agree, acknowledge and reiterate that: (a) this Agreement is not being entered into as a condition of or in connection with Stockholder’s employment or consulting relationship with the Company; (b) this Agreement is being entered into at the request of the Proxyholder in his individual capacity as a stockholder of the Company, and is not being entered into at the request of the Company or the Company’s Chief Executive Officer or any member of its Board of Directors; and (c) Stockholder is entering into this Agreement with the express understanding that Stockholder is not being required to enter into this Agreement and that, if Stockholder had declined to enter into this Agreement, Stockholder would not suffer any negative employment or consulting relationship consequences.

5. Termination .

5.1 Termination Events . This Agreement shall terminate upon the earlier of:

(a) The liquidation, dissolution or winding up of the business operations of the Company;

(b) The execution by the Company of a general assignment for the benefit of creditors or the appointment of a receiver or trustee to take possession of the property and assets of the Company;

(c) In the sole discretion of the Proxyholder, with the express written consent of the Proxyholder (which he shall be under no obligation to provide); or

(d) The death of the Proxyholder.

5.2 Removal of Legend . At any time after the termination of this Agreement in accordance with Section 5.1, any holder of a stock certificate legended pursuant to this Agreement may surrender such certificate to the Company for removal of the legend, and the Company will duly reissue a new certificate without the legend.

 

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6. Miscellaneous .

6.1 Successors and Assigns . The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. Except for an assignment by the Company by operation of law or in connection with an Acquisition (which shall be permitted with only the written consent and notice of the Company), this Agreement may not be assigned by the parties without the written consent of the Proxyholder, the Company and the Stockholder.

6.2 Amendments and Waivers . Any term hereof may be amended or waived only with the written consent of the Stockholder and the Proxyholder, except where such amendment or waiver shall materially negatively alter the rights or obligations of the Company hereunder, in which case any such amendment or waiver shall also require the written consent of the Company. Any amendment or waiver effected in accordance with this Section 6.2 shall be binding upon the Company, the Proxyholder and the Stockholder, and each of their respective successors and assigns.

6.3 Notices . Notwithstanding anything to the contrary contained herein, any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient and received on the earlier of (a) the date of delivery, when delivered personally, by overnight mail, courier or sent by electronic mail (e-mail), telegram or fax, or (b) forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address or fax number as set forth on the signature page or on Exhibit A hereto, or as subsequently modified by written notice. Any electronic mail (e-mail) communication shall be deemed to be “in writing” for purposes of this Agreement.

6.4 Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded and (c) the balance of the Agreement shall be enforceable in accordance with its terms.

6.5 Governing Law; Jurisdiction; Venue . This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to principles of conflicts of law. In addition, each of the parties hereto (a) consents to submit itself to the exclusive personal jurisdiction of the Court of Chancery or other courts of the State of Delaware in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement, (b) agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from such court, (c) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the Court of Chancery or other courts of

 

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the State of Delaware and (d) to the fullest extent permitted by law, consents to service being made through the notice procedures set forth in Section 6.3. Each party hereto hereby agrees that, to the fullest extent permitted by law, service of any process, summons, notice or document by U.S. registered mail to the respective addresses set forth in Section 6.3 shall be effective service of process for any suit or proceeding in connection with this Agreement or the transactions contemplated hereby.

6.6 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

6.7 Titles and Subtitles . The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

6.8 Counsel to the Company . Each party to this Agreement acknowledges and agrees that Orrick, Herrington & Sutcliffe LLP is acting as counsel solely to the Company and does not represent either the Stockholder or the Proxyholder in connection with this Agreement or any other agreement. Each party to this agreement has had the opportunity and has been encouraged to consult with their own independent counsel.

[Signature Page(s) Follow(s)]

 

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The parties hereto have executed this Voting Agreement as of the date first written above.

 

COMPANY:     STOCKHOLDER:

Facebook, Inc.

(f/k/a TheFacebook, Inc.)

   
By:         By:    
  Mark Zuckerberg     Name:    
  Chief Executive Officer     Address:    
      E-Mail:    
      Fax:    
PROXYHOLDER:       PLEASE FILL IN ALL BLANKS ABOVE, AS APPLICABLE

 

Mark Zuckerberg

     

SIGNATURE PAGE TO

VOTING AGREEMENT

EXHIBIT 4.4

FORM OF “TYPE 2” HOLDER VOTING AGREEMENT

This Holder Voting Agreement (this “ Agreement ”) is made as of the    day of                    , 20    , by and among Facebook, Inc., a Delaware corporation (the “ Company ”),                     (together with its successors, “ Stockholder ”), and Mark Zuckerberg (“ Proxyholder ”).

RECITALS

A. Stockholder is purchasing and will hold shares of                                        of the Company and is party to that certain Fourth Amended and Restated Voting Agreement by and among the Company, the Founders (as defined therein), Peter Thiel and the Investors (as defined therein), dated as of even date herewith (the “ Investor Voting Agreement ”).

B. This Agreement, among other things, requires Stockholder to vote all such shares of                                        and all shares of capital stock of the Company which Stockholder hereafter acquires or as to which Stockholder otherwise exercises voting or dispositive authority (together, all such shares referred to in this sentence and any securities of the Company issued with respect to, upon conversion of, or in exchange or substitution of such shares, the “ Shares ”) in the manner set forth herein.

C. This Agreement is being entered into in exchange for a payment of U.S. $100 in cash from Proxyholder to Stockholder and for other good and valuable consideration, the sufficiency of which is hereby acknowledged and agreed.

AGREEMENT

The parties agree as follows:

1. No Conflict with Investor Voting Agreement . In the event of a conflict between the terms and provisions of this Agreement and the terms and provisions of the Investor Voting Agreement, the terms and provisions of the Investor Voting Agreement will prevail, and Proxyholder or Stockholder, as the case may be, shall be obligated to vote the Shares in accordance with the Investor Voting Agreement.

2. Voting Arrangements . Stockholder hereby agrees that Proxyholder shall have the right to vote all the Shares, in his sole discretion, on all matters submitted to a vote of stockholders of the Company at a meeting of stockholders or through the solicitation of a written consent of stockholders (whether of any individual class of stock or of multiple classes of stock voting together) except for:

2.1 Any issuance, or series of related issuances, of capital stock in a capital raising transaction by the Company that is submitted for stockholder approval in which the number of shares of capital stock so issued will exceed 20% of the total number of shares of capital stock of the Company outstanding immediately prior to such issuance; and

2.2 Any matter, the outcome of the vote on which would disproportionately, materially and adversely affect Stockholder, as compared to other holders of the same class(es)


of capital stock of Company, provided that, subject to Section 2.1, increases in the authorized number of shares of preferred stock generally, or the authorized number of any class of preferred stock of the Company or the issuance of securities of the Company senior to such class of preferred stock will not be viewed as having such an adverse effect).

With respect to the excepted matters described in Sections 2.1 and 2.2 above, Stockholder shall have the right to (i) instruct Proxyholder in writing as to the manner in which the Shares shall be voted or (ii) vote the Shares in person or by action by written consent, as applicable, in which case Stockholder shall notify Proxyholder in writing that it intends to so vote. In addition, Proxyholder shall not have any right to waive notice by the Company to Stockholder. Such instruction or notice shall be provided to Proxyholder at least five (5) days prior to the date of any meeting of stockholders at which such matter is to be voted upon or as promptly as reasonably practicable upon Stockholder becoming aware that such matter is to be acted upon by written consent. In the event that Stockholder does not so instruct Proxyholder or notify Proxyholder of its intention to so vote or act by written consent, Proxyholder shall abstain from voting the Shares in respect of such matters.

3. Illustrative Examples . Matters on which Proxyholder shall be entitled to vote, pursuant to Section 2 include, but are not limited to, the following, which are presented here solely by way of example:

3.1 Election, replacement or removal of directors of the Company (each, a “ Director ”);

3.2 Sale or other disposition of all or substantially all of the Company’s assets, provided , that any distribution to Company stockholders of the proceeds of such sale or disposition are made in accordance with the Company’s certificate of incorporation, as then in effect;

3.3 Mergers of, or acquisitions by, the Company or its subsidiaries that are submitted for stockholder approval;

3.4 Adoption by the Company of a rights plan or similar takeover defensive arrangements, or amendments thereof, which plan provides that a triggering event will occur only upon the acquisition by a stockholder of 15% or more of the Company’s shares of voting capital stock; and

3.5 Adoption by the Company of a two-class capital stock structure (a “ Dual Class Structure ”) in which one class of capital stock has, among other things, enhanced voting rights, including but not necessarily limited to multiple votes per share (“ Heavy Vote Stock ”), and the other class of capital stock does not (“ Low Vote Stock ”), provided , that, the shares of capital stock held by Stockholder at the time of adoption of such structure are entitled to be converted into Heavy Vote Stock.

4. Stockholder to Abstain from Voting . Stockholder agrees that, unless Proxyholder provides explicit written instruction to vote the Shares under this Agreement or Proxyholder provides explicit written notice that Stockholder shall be permitted by Proxyholder to vote in a manner other than as Proxyholder instructs, Stockholder shall abstain from voting any of the Shares (in person, by proxy or by action by written consent, as applicable) on all matters other than with respect to the matters set forth in Section 2.1 and 2.2.

 

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5. Irrevocable Proxy and Power of Attorney . To secure Stockholder’s obligations to vote the Shares in accordance with this Agreement and to comply with the other terms hereof, Stockholder hereby appoints Proxyholder, or his designees, as Stockholder’s true and lawful proxy and attorney, with the power to act alone and with full power of substitution, to vote or act by written consent with respect to all the Shares in accordance with the provisions set forth in this Agreement, and to execute all appropriate instruments consistent with this Agreement on behalf of Stockholder. The proxy and power granted by Stockholder pursuant to this Section are coupled with an interest and are given to secure the performance of Stockholder’s duties under this Agreement. The proxy and power will be irrevocable for the term hereof. The proxy and power will survive the merger, consolidation, conversion or reorganization of Stockholder or any other entity holding the Shares.

6. Additional Representations, Covenants and Agreements .

6.1 Transfers by Stockholder.

(a) Stockholder hereby acknowledges that Proxyholder is an intended third-party beneficiary of the Third Amended and Restated Right of First Refusal and Co-Sale Agreement by and among the Founders (as defined therein), the Company and the Investors (as defined therein) dated as of even date herewith (the “ ROFR Agreement ”).

(b) Pursuant to Section 5 of the ROFR Agreement, Stockholder may not transfer, assign, pledge or otherwise dispose of or encumber the Shares (collectively, a “ Transfer ”) without the prior written consent of the Company, unless otherwise permitted by the ROFR Agreement.

(c) If Stockholder’s Transfer of Shares is permitted under the terms of the ROFR Agreement or is otherwise consented to by the Company pursuant to the ROFR Agreement, such Transfer shall not take effect until the pledgee, transferee or donee of such Shares (the “ Transferee ”) furnishes Proxyholder and the Company with a written agreement to be bound by the terms of this Agreement (an “ Assumption Agreement ”) and any additional agreement required under any other applicable agreements between the parties hereto, it being understood and agreed that the Company shall be entitled to issue stop transfer instructions in respect of such Shares to preclude any transfer of Shares in contravention of the foregoing. Notwithstanding the foregoing, following the completion of a firm commitment underwritten public offering by the Company under the Securities Act of 1933, as amended (the “ Securities Act ”) the Transferee shall not be required to enter into an Assumption Agreement if:

(i) at the time of such Transfer the Company has a Dual Class Structure and Stockholder is transferring (x) High Vote Stock that, upon completion of such Transfer, shall automatically become Low Vote Stock, or (y) Low Vote Stock; or

 

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(ii) the shares of capital stock being transferred, in either a single transaction or series of related transactions, represent less than 3.17% of the aggregate number of shares of the Company’s voting capital stock then outstanding.

Upon satisfaction of the provisions of this Section 6.2, such pledgee, transferee or donee shall be treated as a “Stockholder” for purposes of this Agreement.

6.2 Legends . The Company shall cause each certificate representing the Shares to bear the following legend:

“THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A HOLDER VOTING AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY (A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY) WHICH INCLUDES PROVISIONS POTENTIALLY RESTRICTING THE STOCKHOLDER’S RIGHT TO VOTE OR TRANSFER HIS OR ITS ENTIRE INTEREST IN THE SHARES EVIDENCED HEREBY, AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID HOLDER VOTING AGREEMENT.”

6.3 Stock Splits, Dividends, Etc . In the event of any issuance of shares of the Company’s voting securities hereafter to Stockholder (including, without limitation, in connection with any stock split, stock dividend, recapitalization, reorganization, or the like), such shares shall automatically become subject to this Agreement and shall be endorsed with the legend set forth in Section 6.2.

6.4 Specific Enforcement . It is agreed and understood that monetary damages would not adequately compensate an injured party for the breach of this Agreement by any party, that this Agreement shall be specifically enforceable, and that any breach or threatened breach of this Agreement shall be the proper subject of a temporary or permanent injunction or restraining order. Further, each party hereto waives any claim or defense that there is an adequate remedy at law for such breach or threatened breach.

6.5 Securities Laws, Rules and Regulations . Stockholder, the Company and Proxyholder agree and understand that Stockholder, the Company and/or Proxyholder may become subject to the registration and/or reporting requirements, rules and regulations of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), the Securities Act and/or any state and federal securities laws (collectively with the Exchange Act and the Securities Act, the “ Securities Laws ”). Stockholder, the Company and Proxyholder agree to use their respective commercially reasonable efforts to comply with the Securities Laws and to reasonably assist each other in complying with the Securities Laws in a timely and prompt manner. Such compliance may include, for example and without limiting the foregoing, the filing and updating and maintaining of Form 13G and/or Form 13D under the Exchange Act.

 

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6.6 Other Arrangements . During the term of this Agreement Stockholder will not, without Proxyholder’s written consent:

(a) offer, seek or propose to acquire or cause to be acquired, any ownership of any assets or business of the Company or any of its subsidiaries, or seek to propose or propose, whether alone or in concert with other persons, any tender offer (other than as contemplated by the Transaction Agreements, as defined in the Series E Preferred Stock Purchase Agreement, dated as of May 16, 2009, by and between the Company and Stockholder), exchange offer, merger, business combination, restructuring, liquidation, recapitalization or similar transaction involving the Company or any of its subsidiaries;

(b) make, or in any way participate in, any “solicitation” of “proxies” (as such terms are defined in Rule 14a-1 under the Exchange Act with respect to the voting of any securities of the Company or any of its subsidiaries or seek to advise or influence other stockholders the Company with regard to the voting of their securities of the Company;

(c) form, join, or in any way become a member of a 13D Group with respect to any voting securities of the Company or any of its subsidiaries (where “ 13D Group ” means any “group”, within the meaning of Section 13(d) of the Exchange Act, formed for the purpose of acquiring, holding, voting or disposing of voting securities of the Company other than Stockholder and its “affiliates”, as such term is defined in the Exchange Act);

(d) nominate any person as a director of the Company who is not nominated by the then incumbent directors, propose any matter to be voted upon by the stockholders of the Company or initiate or vote in favor of a call for a special meeting of stockholders of the Company; or

(e) publicly announce or disclose any intention, plan or arrangement inconsistent with the foregoing.

In addition, during the term of this Agreement, Stockholder shall promptly, but in any event within three (3) days, notify the Company and Proxyholder in writing of any acquisition by Stockholder of shares of capital stock of the Company.

6.7 Proxyholder’s Liability . In voting the Shares in accordance with Section 2 hereof, Proxyholder shall not be liable for any error of judgment nor for any act done or omitted, nor for any mistake of fact or law nor for anything which Proxyholder may do or refrain from doing in good faith, nor shall Proxyholder have any accountability hereunder, except for his own bad faith, gross negligence or willful misconduct. Furthermore, upon any judicial or other inquiry or investigation of or concerning Proxyholder’s acts pursuant to his rights and powers as Proxyholder, such acts shall be deemed reasonable and in the best interests of Stockholder unless proved to the contrary by clear and convincing evidence.

6.8 Consideration . In connection with this Agreement and as partial consideration for the obligations of Stockholder hereunder, Proxyholder shall pay (by check, cash or other valid consideration) to Stockholder the sum of U.S.$100 in the aggregate.

 

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6.9 Series E Transaction Agreements . Unless related to a vote submitted to the stockholders of the Company at a meeting of stockholders or through the solicitation of a written consent of stockholders, Proxyholder acknowledges and agrees that Proxyholder shall not have any right to exercise or waive any of Stockholder’s rights provided for in the Transaction Agreements.

7. Termination .

7.1 Termination Events . This Agreement shall terminate:

(a) upon the liquidation, dissolution or winding up of the business operations of the Company;

(b) upon the execution by the Company of a general assignment for the benefit of creditors or the appointment of a receiver or trustee to take possession of the property and assets of the Company;

(c) in the sole discretion of Proxyholder, upon the express written consent of Proxyholder (which he shall be under no obligation to provide);

(d) upon the death or permanent and substantial incapacity of Proxyholder, as determined in good faith by the Company’s board of directors, unless Proxyholder is actively contesting such determination of incapacity; or

(e) Six (6) months after the later of the date on which Proxyholder (i) ceases to be Chief Executive Officer (“ CEO ”) of the Company, and (ii) is no longer Actively Engaged in the management of the Company, where “ Actively Engaged ” is defined as Proxyholder (I) being a Director, (II) devoting substantially all of his business efforts to the Company, and (III) owning at least 50% (the “ Threshold Amount ”) of the shares of capital stock of the Company owned by him as of the date of this Agreement (as adjusted for any stock split, stock dividend, recapitalization, reorganization or the like). Notwithstanding the foregoing, the date of termination of this Agreement pursuant to this Section 7.1(e) will be 12 (twelve) months after such later date if (x) Proxyholder is actively contesting his removal as CEO or Director, or (y) has ceased to be Actively Engaged due to having taken a leave of absence for medical reasons, provided, however, that if at any time Proxyholder is not CEO (and he is not actively contesting his removal as CEO) and he ceases to be Actively Engaged due to his owning less than the Threshold Amount, this Agreement shall terminate immediately upon the date as of which he ceases to own less than the Threshold Amount.

7.2 Removal of Legend . At any time after the termination of this Agreement in accordance with Section 7.1, any holder of a stock certificate legended pursuant to this Agreement may surrender such certificate to the Company for removal of the legend, and the Company shall, as promptly as reasonably practicable, reissue a new certificate without the legend.

 

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8. Miscellaneous .

8.1 Successors and Assigns . The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the Company, Stockholder and Proxyholder. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or the respective successors and assigns of the Company, Stockholder and Proxyholder any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. Except for an assignment by the Company (i) by operation of law, or (ii) in connection with an acquisition, consolidation or merger of the Company or sale of all or substantially all of the Company’s assets (which shall be permitted with only the written consent and notice of the Company), this Agreement may not be assigned without the written consent of Proxyholder, the Company and Stockholder.

8.2 Amendments and Waivers . Any term hereof may be amended or waived only with the written consent of Stockholder and Proxyholder, except where such amendment or waiver shall materially negatively alter the rights or obligations of the Company hereunder, in which case any such amendment or waiver shall also require the written consent of the Company. Any amendment or waiver effected in accordance with this Section 8.2 shall be binding upon the Company, Proxyholder and Stockholder, and each of the respective successors and assigns to the Company or Proxyholder.

8.3 Notices . Notwithstanding anything to the contrary contained herein, any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient and received on the earlier of (a) the date of delivery, when delivered personally, by overnight mail, courier or sent by electronic mail (e-mail) or fax, or (b) forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address, e-mail address or fax number as set forth on the signature page hereto, or as subsequently modified by written notice. Any electronic mail (e-mail) communication shall be deemed to be “in writing” for purposes of this Agreement.

8.4 Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded, and (c) the balance of the Agreement shall be enforceable in accordance with its terms.

8.5 Governing Law; Jurisdiction; Venue .

(a) This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to conflict of law principles. In addition, each of the parties hereto (i) consents to submit itself to the exclusive jurisdiction of the Court of Chancery or other courts of the State of Delaware in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement, (ii) agrees that it will not attempt to deny or defeat such jurisdiction by motion or other request for leave from such court, (iii) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the Court of

 

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Chancery or other courts of the State of Delaware, and (iv) hereby waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

(b) Stockholder hereby appoints CT Corporation System, with offices on the date hereof at 1209 Orange Street, Wilmington, Delaware 19801, as its authorized agent for service of process as its authorized agent (the “ Authorized Agent ”), upon whom process may be served in any suit, action or proceeding arising out of or relating to this Agreement or the transactions contemplated by this Agreement. Service of process upon the Authorized Agent shall be deemed, in every respect, effective service of process upon Stockholder.

(c) Each party hereto, other than Stockholder, hereby consents to service of process being made through the notice procedures set forth in Section 8.3 and agrees that, to the fullest extent permitted by law, service of any process, summons, notice or document by U.S. registered mail to the parties’ respective addresses set forth on the signature page hereto shall be effective service of process for any suit or proceeding in connection with this Agreement or the transactions contemplated hereby.

8.6 Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

8.7 Titles and Subtitles . The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

8.8 Confidentiality . Prior to the filing of a registration statement with respect to a firm commitment underwritten public offering by the Company under the Securities Act, the parties shall keep this Agreement and the terms hereof confidential and not disclose the foregoing to any third party, except as required by applicable law and as the parties hereto may otherwise agree.

[Signature page follows]

 

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IN WITNESS WHEREOF, the parties have executed this Holder Voting Agreement as of the date first set forth above.

 

THE COMPANY   STOCKHOLDER  
Facebook, Inc.    

 

   

 

 
By:  

Theodore W. Ullyot

Vice President and General Counsel

   

By:

Title:

Address:

 
PROXYHOLDER    

 

     

Mark Zuckerberg

   

SIGNATURE PAGE TO HOLDER VOTING AGREEMENT

EXHIBIT 4.5

FORM OF “TYPE 3” HOLDER VOTING AGREEMENT

This Holder Voting Agreement (this “ Agreement ”) is made as of the          day of                     , 20    , by and among Facebook, Inc., a Delaware corporation (the “ Company ”),                     (each, together with its successors, a “ Stockholder ” and collectively, “ Stockholders ”), and Mark Zuckerberg (“ Proxyholder ”).

RECITALS

A. Stockholders are expected to purchase shares of Class B Common Stock of the Company from             (the “ Common Holder Shares ”) and are party to that certain Sixth Amended and Restated Voting Agreement by and among the Company, the Founders (as defined therein), Peter Thiel and the Investors (as defined therein), dated as of November 20, 2009 (the “ Investor Voting Agreement ”). Any acquisition of the Common Holder Shares shall occur pursuant to the Stock Transfer Agreements to be identified on Exhibit A hereto (each a “ Stock Transfer Agreement ” and, together, the “ Stock Transfer Agreements ”) which agreements shall be in form and substance satisfactory to the Company and Proxyholder. As any Common Holder Shares are acquired pursuant to a Stock Transfer Agreement, such agreement will be identified on Exhibit A hereto, as updated by the Company.

B. This Agreement, among other things, requires Stockholders to vote all Common Holder Shares and all shares of capital stock of the Company that a Stockholder hereafter acquires or as to which a Stockholder hereafter acquires the right to exercise voting or dispositive authority (together, all such shares referred to in this sentence and any securities of the Company issued with respect to, upon conversion of, or in exchange or substitution of such shares, the “Shares”) in the manner set forth herein. For the avoidance of doubt, the term “ Shares ” shall not include any shares of capital stock of the Company that (i) a Stockholder or any affiliate of a Stockholder holds, or as to which a Stockholder or any affiliate of a Stockholder exercises voting or dispositive authority over, as of the date hereof, including, without limitation, shares of             , or (ii) any securities of the Company issued as dividends, with respect to stock splits or the like, upon conversion of, or in exchange or substitution of such shares (collectively, the “ Excluded Stock ”).

C. This Agreement is being entered into in exchange for a payment of U.S. $100 in cash from Proxyholder to each Stockholder and for other good and valuable consideration, the sufficiency of which is hereby acknowledged and agreed.


AGREEMENT

The parties agree as follows:

1. No Conflict with Investor Voting Agreement . In the event of a conflict between the terms and provisions of this Agreement and the terms and provisions of the Investor Voting Agreement, the terms and provisions of the Investor Voting Agreement will prevail, and Proxyholder or Stockholders, as the case may be, shall be obligated to vote the Shares in accordance with the Investor Voting Agreement.

2. Voting Arrangements . Stockholders hereby agree that Proxyholder shall have the right to vote all the Shares, in his sole discretion, on all matters submitted to a vote of stockholders of the Company at a meeting of stockholders or through the solicitation of a written consent of stockholders (whether of any individual class of stock or of multiple classes of stock voting together) except for:

2.1. Any issuance, or series of related issuances, of capital stock in a capital raising transaction by the Company that is submitted for stockholder approval in which the number of shares of capital stock so issued will exceed 20% of the total number of shares of capital stock of the Company outstanding immediately prior to such issuance; and

2.2. Any matter, the outcome of the vote on which would disproportionately, materially and adversely affect a Stockholder, as compared to other holders of the same class(es) of capital stock of Company, provided that, subject to Section 2.1, increases in the authorized number of shares of preferred stock generally, or the authorized number of any class of preferred stock of the Company or the issuance of securities of the Company senior to such class of preferred stock will not be viewed as having such an adverse effect.

With respect to the excepted matters described in Sections 2.1 and 2.2 above, such Stockholder shall have the right to (i) instruct Proxyholder in writing as to the manner in which the Shares shall be voted or (ii) vote the Shares in person or by action by written consent, as applicable, in which case such Stockholder shall notify Proxyholder in writing that it intends to so vote. In addition, Proxyholder shall not have any right to waive notice by the Company to such Stockholder. Such instruction or notice shall be provided to Proxyholder at least five (5) days prior to the date of any meeting of stockholders at which such matter is to be voted upon or as promptly as reasonably practicable upon such Stockholder becoming aware that such matter is to be acted upon by written consent. In the event that such Stockholder does not so instruct Proxyholder or notify Proxyholder of its intention to so vote or act by written consent, Proxyholder shall abstain from voting the Shares in respect of such matters.

3. Illustrative Examples . Matters on which Proxyholder shall be entitled to vote, pursuant to Section 2 include, but are not limited to, the following, which are presented here solely by way of example:

3.1. Election, replacement or removal of directors of the Company (each, a “ Director ”);

 

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3.2. Sale or other disposition of all or substantially all of the Company’s assets, provided , that any distribution to Company stockholders of the proceeds of such sale or disposition are made in accordance with the Company’s certificate of incorporation, as then in effect;

3.3. Mergers of, or acquisitions by, the Company or its subsidiaries that are submitted for stockholder approval;

3.4. Adoption by the Company of a rights plan or similar takeover defensive arrangements, or amendments thereof, which plan provides that a triggering event will occur only upon the acquisition by a stockholder of 15% or more of the Company’s shares of voting capital stock; and

3.5. Adoption by the Company of a two-class capital stock structure (a “ Dual Class Structure ”) in which one class of capital stock has, among other things, enhanced voting rights, including but not necessarily limited to multiple votes per share (“ Heavy Vote Stock ”), and the other class of capital stock does not (“ Low Vote Stock ”), provided, that, the shares of capital stock held by Stockholders at the time of adoption of such structure are entitled to be converted into Heavy Vote Stock.

4. Stockholders to Abstain from Voting . Stockholders agree that, unless Proxyholder provides explicit written instruction to vote the Shares under this Agreement or Proxyholder provides explicit written notice that a Stockholder shall be permitted by Proxyholder to vote in a manner other than as Proxyholder instructs, Stockholders shall abstain from voting any of the Shares (in person, by proxy or by action by written consent, as applicable) on all matters other than with respect to the matters set forth in Section 2.1 and 2.2.

5. Irrevocable Proxy and Power of Attorney . To secure Stockholders’ obligations to vote the Shares in accordance with this Agreement and to comply with the other terms hereof, Stockholders hereby appoint Proxyholder, or his designees, as Stockholders’ true and lawful proxy and attorney, with the power to act alone and with full power of substitution, to vote or act by written consent with respect to all the Shares in accordance with the provisions set forth in this Agreement, and to execute all appropriate instruments consistent with this Agreement on behalf of Stockholders. The proxy and power granted by Stockholders pursuant to this Section 5 are coupled with an interest and are given to secure the performance of Stockholders’ duties under this Agreement. The proxy and power will be irrevocable for the term hereof. The proxy and power will survive the merger, consolidation, conversion or reorganization of a Stockholder or any other entity holding the Shares.

6. Additional Representations, Covenants and Agreements .

6.1. Transfers by Stockholders .

(a) Stockholders hereby acknowledge that Proxyholder is an intended third-party beneficiary of the Fourth Amended and Restated Right of First Refusal and Co-Sale Agreement by and among the Founders (as defined therein), the Company and the Investors (as defined therein) dated as of November 20, 2009, as amended from time to time (the “ ROFR Agreement ”) and the Stock Transfer Agreements.

 

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(b) Stockholders further acknowledge that the Common Holder Shares are subject to voting agreements, as identified on Exhibit B hereto (the “ Original Voting Agreements ”), in favor of Proxyholder regarding the voting or transfer of such shares. Stockholders agree that the Original Voting Agreements shall remain in full force and effect, except as set forth herein; provided, however, that the terms of the Original Voting Agreements shall be suspended and not apply to the Common Holder Shares (or to Stockholders with respect to the Shares) for so long as this Agreement remains in effect. Except as otherwise expressly provided in this Agreement, in the event that this Agreement is terminated for any reason (other than pursuant to Section 7.1 (c)), the suspension of the terms of the Original Voting Agreements shall cease and such Original Voting Agreements shall again apply to the Common Holder Shares (and to Stockholders with respect to the Shares and not to any Excluded Stock). In the event that this Agreement is terminated pursuant to Section 7.1(c), neither this Agreement nor any Original Voting Agreement shall apply to any Shares or Stockholders. In the event of a conflict between the terms and provisions of either or both of this Agreement or any Original Voting Agreement and the Investor Voting Agreement, the terms and provisions of the Investor Voting Agreement shall prevail.

(c) Pursuant to the Stock Transfer Agreements and Section 6 of the ROFR Agreement, a Stockholder may not transfer, assign, pledge or otherwise dispose of or encumber the Shares (collectively, a “ Transfer ”) without the prior written consent of the Company, unless otherwise permitted by the Stock Transfer Agreements and the ROFR Agreement.

(d) If a Stockholder’s Transfer of Shares is permitted under the terms of the Stock Transfer Agreements and the ROFR Agreement or is otherwise consented to by the Company pursuant to the Stock Transfer Agreements and the ROFR Agreement, such Transfer shall not take effect until the pledgee, transferee or donee of such Shares (the “ Transferee ”) furnishes Proxyholder and the Company with a written agreement to be bound by the terms of this Agreement (an “ Assumption Agreement ”) and any additional agreement required under any other applicable agreements between the parties hereto, it being understood and agreed that the Company shall be entitled to issue stop transfer instructions in respect of such Shares to preclude any transfer of Shares in contravention of the foregoing. Notwithstanding the foregoing, following the completion of a firm commitment underwritten public offering by the Company (the “ Initial Public Offering ”) under the Securities Act of 1933, as amended (the “ Securities Act ”), the Transferee shall not be required to enter into an Assumption Agreement (and the Shares shall no longer be subject to the restrictions of this Agreement or any Original Voting Agreement) if:

(i) at the time of such Transfer the Company has a Dual Class Structure and a Stockholder is transferring (x) Heavy Vote Stock that, upon completion of such Transfer, shall automatically become Low Vote Stock, or (y) Low Vote Stock; or

(ii) the Shares of capital stock being transferred by a Stockholder, in either a single transaction or series of related transactions, represent less than 3.17% of the aggregate number of shares of the Company’s voting capital stock then outstanding.

 

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For clarification purposes, Shares Transferred after an Initial Public Offering and in accordance with Section 6.1 (d) shall no longer be subject to this Agreement or any Original Voting Agreement and the Transferee shall not be treated as a “Stockholder” for purposes of this Agreement. Except as set forth in the prior sentence, upon satisfaction of the provisions of this Section 6.1, such pledgee, transferee or donee shall be treated as a “Stockholder” for purposes of this Agreement.

6.2. Priority of Transfer . Stockholders acknowledge and agree that in the event that a Stockholder proposes to Transfer Shares to a third party at a time when such Stockholder holds Shares of the Company’s capital stock that are subject to this Agreement, but not the Original Voting Agreements (the “ Single Agreement Shares ”) and shares that are subject to both this Agreement and the Original Voting Agreements (the “ Dual Agreement Shares ”), it will only Transfer a portion of the Dual Agreement Shares it then holds that is no greater than the fraction represented by the number of Single Agreement Shares being transferred divided by the total number of Single Agreement Shares held by such Stockholder immediately prior to such Transfer.

6.3. Legends . The Company shall cause each certificate representing the Shares to bear the following legend, in addition to any legends that may be required by state or federal securities laws or the terms of any voting or other agreements that apply:

THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A HOLDER VOTING AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY, DATED AS OF                     , 20    (A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY) WHICH INCLUDES PROVISIONS POTENTIALLY RESTRICTING THE STOCKHOLDER’S RIGHT TO VOTE OR TRANSFER AN INTEREST IN THE SHARES EVIDENCED HEREBY, AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID HOLDER VOTING AGREEMENT.

6.4. Stock Splits, Dividends, Etc . In the event of any issuance of shares of the Company’s voting securities hereafter to a Stockholder as a result of such Stockholder’s ownership of Shares (including, without limitation, in connection with any stock split, stock dividend, recapitalization, reorganization, or the like), such shares shall automatically be deemed “Shares” hereunder and shall be endorsed with the legend set forth in Section 6.3. Section     of the Original Voting Agreement entered into with                      provides that any of the Company’s voting securities issued in connection with a stock split, dividend, recapitalization, reorganization or the like with respect to securities subject to such Original Voting Agreement shall automatically become subject to the restrictions set forth in the Original Voting Agreement (the “ Stock Split Provisions ”). For the avoidance of doubt, the Stock Split Provisions shall apply only to the Shares and not to Excluded Stock and shall not in any manner encumber the Excluded Stock or any securities issued as a stock split, stock dividend, recapitalization, reorganization or the like on Excluded Stock.

 

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6.5. Specific Enforcement . It is agreed and understood that monetary damages would not adequately compensate an injured party for the breach of this Agreement by any party, that this Agreement shall be specifically enforceable, and that any breach or threatened breach of this Agreement shall be the proper subject of a temporary or permanent injunction or restraining order. Further, each party hereto waives any claim or defense that there is an adequate remedy at law for such breach or threatened breach.

6.6. Securities Laws, Rules and Regulations . Stockholders, the Company and Proxyholder agree and understand that Stockholders, the Company and/or Proxyholder may become subject to the registration and/or reporting requirements, rules and regulations of the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), the Securities Act and/or any state and federal securities laws (collectively with the Exchange Act and the Securities Act, the “ Securities Laws ”). Stockholders, the Company and Proxyholder agree to use their respective commercially reasonable efforts to comply with the Securities Laws and to reasonably assist each other in complying with the Securities Laws in a timely and prompt manner. Such compliance may include, for example and without limiting the foregoing, the filing and updating and maintaining of Form 13G and/or Form 13D under the Exchange Act.

6.7. Other Arrangements . During the term of this Agreement a Stockholder will not, in its capacity as a holder of the Shares only (and not as a holder of Excluded Stock), without Proxyholder’s written consent:

(a) offer, seek or propose to acquire or cause to be acquired, any ownership of any assets or business of the Company or any of its subsidiaries, or seek to propose or propose, whether alone or in concert with other persons, any tender offer, exchange offer, merger, business combination, restructuring, liquidation, recapitalization or similar transaction involving the Company or any of its subsidiaries;

(b) make, or in any way participate in, any “solicitation” of “proxies” (as such terms are defined in Rule 14a-1 under the Exchange Act) with respect to the voting of any securities of the Company or any of its subsidiaries or seek to advise or influence other stockholders the Company with regard to the voting of their securities of the Company;

(c) form, join, or in any way become a member of a 13D Group with respect to any voting securities of the Company or any of its subsidiaries (where “ 13D Group ” means any “group”, within the meaning of Section 13(d) of the Exchange Act, formed for the purpose of acquiring, holding, voting or disposing of voting securities of the Company other than a Stockholder and its “affiliates”, as such term is defined in the Exchange Act);

(d) nominate any person as a director of the Company who is not nominated by the then incumbent directors, propose any matter to be voted upon by the stockholders of the Company or initiate or vote in favor of a call for a special meeting of stockholders of the Company; or

 

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(e) publicly announce or disclose any intention, plan or arrangement inconsistent with the foregoing.

In addition, during the term of this Agreement, a Stockholder shall promptly, but in any event within three (3) days, notify the Company and Proxyholder in writing of any acquisition by such Stockholder of shares of capital stock of the Company (other than the acquisition of shares of capital stock of the company issued in relation to Excluded Stock or with respect to, upon conversion of, or in exchange or substitution of shares of capital stock of the Company held by such Stockholder).

6.8. Proxyholder’s Liability . In voting the Shares in accordance with Section 2 hereof, Proxyholder shall not be liable for any error of judgment nor for any act done or omitted, nor for any mistake of fact or law nor for anything which Proxyholder may do or refrain from doing in good faith, nor shall Proxyholder have any accountability hereunder, except for his own bad faith, gross negligence or willful misconduct. Furthermore, upon any judicial or other inquiry or investigation of or concerning Proxyholder’s acts pursuant to his rights and powers as Proxyholder, such acts shall be deemed reasonable and in the best interests of Stockholders unless proved to the contrary by clear and convincing evidence.

6.9. Consideration . In connection with this Agreement and as partial consideration for the obligations of Stockholders hereunder, Proxyholder shall pay (by check, cash or other valid consideration) to each Stockholder the sum of U.S. $100 in the aggregate.

6.10. Notice Waiver . Pursuant to Section 2(d) of the Original Voting Agreements, Proxyholder has a right to 5 business days notice prior to the Transfer of shares subject to the Original Voting Agreements. Proxyholder hereby waives such notice with respect to Common Holder Shares purchased on or before December 21, 2009.

7. Termination .

7.1. Termination Events . This Agreement shall terminate:

(a) upon the liquidation, dissolution or winding up of the business operations of the Company;

(b) upon the execution by the Company of a general assignment for the benefit of creditors or the appointment of a receiver or trustee to take possession of the property and assets of the Company;

(c) in the sole discretion of Proxyholder, upon the express written consent of Proxyholder (which he shall be under no obligation to provide);

(d) upon the death or permanent and substantial incapacity of Proxyholder, as determined in good faith by the Company’s board of directors, unless Proxyholder is actively contesting such determination of incapacity; or

(e) Six (6) months after the later of the date on which Proxyholder (i) ceases to be Chief Executive Officer (“ CEO ”) of the Company, and (ii) is no longer Actively

 

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Engaged in the management of the Company, where “ Actively Engaged ” is defined as Proxyholder (I) being a Director, (II) devoting substantially all of his business efforts to the Company, and (III) being the beneficial owner of at least 50% (the “ Threshold Amount ”) of the shares of capital stock of the Company beneficially owned by him as of May 26, 2009 (as adjusted for any stock split, stock dividend, recapitalization, reorganization or the like). For the purposes of the foregoing definition of Threshold Amount, the term beneficial owner shall have the meaning set forth in Rule 16a-1(a)(2) under the Exchange Act. Notwithstanding the foregoing, the date of termination of this Agreement pursuant to this Section 7.1 (e) will be 12 (twelve) months after such later date if (x) Proxyholder is actively contesting his removal as CEO or Director, or (y) has ceased to be Actively Engaged due to having taken a leave of absence for medical reasons, provided, however, that if at any time Proxyholder is not CEO (and he is not actively contesting his removal as CEO) and he ceases to be Actively Engaged due to his owning less than the Threshold Amount, this Agreement shall terminate immediately upon the date as of which he ceases to own less than the Threshold Amount.

7.2. Original Voting Agreement Transfer Restrictions . Only Shares (as defined above) purchased by Stockholders pursuant to Stock Transfer Agreements shall be subject to the restrictions of the Original Voting Agreements, and no Excluded Stock (as defined above) shall be subject to the Original Voting Agreements. In addition, notwithstanding the provisions contained in the Original Voting Agreements, Shares Transferred after an Initial Public Offering and in accordance with Section 6.1(d) of this Agreement shall no longer be subject to this Agreement or any Original Voting Agreement, if: (i) at the time of such Transfer the Company has in place (x) a Dual Class Structure and (y) the Stockholder is transferring either Heavy Vote Stock that upon completion of such Transfer shall automatically become Low Vote Stock, or Low Vote Stock, or (ii) the Shares being Transferred by Stockholder, in either a single transaction or series of transactions, represent less than 3.17% of the aggregate number of shares of the Company’s voting capital stock then outstanding. For clarification purposes, the Original Voting Agreements shall not apply and be terminated with respect to any Shares Transferred in accordance with the immediately preceding sentence and any Transferee shall receive such Shares without the restrictions of the Original Voting Agreements.

7.3. Legends Following Termination of Agreement . At any time after termination of any of the Investor Voting Agreement, Holder Voting Agreement or the Original Voting Agreements, any holder of a stock certificate may surrender such certificate to the Company for appropriate modifications to the legend, and the Company shall, as promptly as reasonably practicable, reissue a new certificate with any legends that may be required by state or federal securities laws or the terms of any voting or other agreements that remain applicable.

7.4. Survival . Sections 6.1(b), 6.l(c), 6.1(d), 6.4, 7.2 and 7.3 shall survive the termination of this Agreement.

8. Miscellaneous .

8.1. Successors and Assigns . The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the Company, Stockholders and Proxyholder. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or the respective successors and

 

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assigns of the Company, Stockholders and Proxyholder any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. Except for an assignment by the Company (i) by operation of law, or (ii) in connection with an acquisition, consolidation or merger of the Company or sale of all or substantially all of the Company’s assets (which shall be permitted with only the written consent and notice of the Company), this Agreement may not be assigned without the written consent of Proxy holder, the Company and Stockholders.

8.2. Amendments and Waivers . Any term hereof may be amended or waived only with the written consent of Stockholders and Proxyholder, except where such amendment or waiver shall materially negatively alter the rights or obligations of the Company hereunder, in which case any such amendment or waiver shall also require the written consent of the Company. Any amendment or waiver effected in accordance with this Section 8.2 shall be binding upon the Company, Proxyholder and Stockholders, and each of the respective successors and assigns to the Company or Proxyholder.

8.3. Notices . Notwithstanding anything to the contrary contained herein, any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient and received on the earlier of (a) the date of delivery, when delivered personally, by overnight mail, courier or sent by electronic mail (e-mail) or fax, or (b) forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address, e-mail address or fax number as set forth on the signature page hereto, or as subsequently modified by written notice. Any electronic mail (email) communication shall be deemed to be “in writing” for purposes of this Agreement.

8.4. Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded, and (c) the balance of the Agreement shall be enforceable in accordance with its terms.

8.5. Governing Law; Jurisdiction; Venue .

(a) This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of Delaware, without giving effect to conflict of law principles. In addition, each of the parties hereto (i) consents to submit itself to the exclusive jurisdiction of the Court of Chancery or other courts of the State of Delaware in the event any dispute arises out of this Agreement or any of the transactions contemplated by this Agreement, (ii) agrees that it will not attempt to deny or defeat such jurisdiction by motion or other request for leave from such court, (iii) agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the Court of Chancery or other courts of the State of Delaware, and (iv) hereby waives, and agrees not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court.

 

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(b) Each party hereto, other than Stockholders, hereby consents to service of process being made through the notice procedures set forth in Section 8.3 and agrees that, to the fullest extent permitted by law, service of any process, summons, notice or document by U.S. registered mail to the parties’ respective addresses set forth on the signature page hereto shall be effective service of process for any suit or proceeding in connection with this Agreement or the transactions contemplated hereby.

8.6. Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

8.7. Titles and Subtitles . The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

8.8. Confidentiality . Prior to the filing of a registration statement with respect to a firm commitment underwritten public offering by the Company under the Securities Act, the parties shall keep this Agreement and the terms hereof confidential and not disclose the foregoing to any third party, except as required by applicable law, to fulfill the terms of this Agreement or as the parties hereto may otherwise agree.

[ Signature page follows ]

 

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IN WITNESS WHEREOF, the parties have executed this Holder Voting Agreement as of the date first set forth above.

 

THE COMPANY     STOCKHOLDER
Facebook, Inc.      

 

    By:  

 

By:  

Theodore W. Ullyot

Vice President and General Counsel

     
PROXYHOLDER      

 

     

Mark Zuckerberg

     


Exhibit A

Stock Transfer Agreements


Exhibit B

Original Voting Agreements

EXHIBIT 10.1

FACEBOOK, INC.

FORM OF INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is effective as of                      , by and between Facebook, Inc., a Delaware corporation (the “Company” or “Facebook”), and                      (“Indemnitee”). For purposes of this Agreement, the “Company” shall be deemed to include Facebook and its subsidiaries, as appropriate.

WHEREAS, in order to induce Indemnitee to provide, or continue to provide, services to the Company, the Company wishes to provide for the indemnification of, and advancement of expenses to, Indemnitee to the maximum extent permitted by law;

WHEREAS, Indemnitee does not regard the current protection available as adequate under the present circumstances, and the Indemnitee and other directors, officers, employees, agents and fiduciaries of the Company may not be willing to continue to serve in such capacities without additional protection;

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, Indemnitee to the fullest extent permitted by applicable law so that Indemnitee will serve or continue to serve the Company free from undue concern that he or she will not be so indemnified.

NOW, THEREFORE, in consideration of the foregoing and Indemnitee’s agreement to provide, or continue to provide, services to the Company, the Company and Indemnitee hereby agree as set forth below.

1. Certain Definitions .

(a) “Claim” shall mean any threatened, pending or completed action, suit, proceeding or alternative dispute resolution mechanism, or any hearing, inquiry or investigation that Indemnitee in good faith believes might lead to the institution of any such action, suit, proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, whether formal or informal, investigative or other.

(b) References to the “Company” shall include, in addition to Facebook, any constituent corporation (including any constituent of a constituent) absorbed in a consolidation or merger to which Facebook (or any of its wholly owned subsidiaries) is a party which, if its separate existence had continued, would have had power and authority to indemnify its directors, officers, employees, agents or fiduciaries, so that if Indemnitee is or was a director, officer, employee, agent or fiduciary of such constituent corporation, or is or was serving at the request of such constituent corporation as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the resulting or surviving corporation as Indemnitee would have with respect to such constituent corporation if its separate existence had continued.


(c) “Expenses” shall mean any and all expenses (including attorneys’ fees and all other costs, expenses and obligations) incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, to be a witness in or to participate in, any action, suit, proceeding, alternative dispute resolution mechanism, hearing, inquiry or investigation, whether formal or informal.

(d) “Expense Advance” shall mean an advance payment of Expenses to Indemnitee pursuant to Section 3(a).

(e) “Indemnifiable Event” shall mean any event or occurrence related to the fact that Indemnitee is or was a director, officer, employee, agent or fiduciary of the Company, or any subsidiary of the Company, or is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary of another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action or inaction on the part of Indemnitee while serving in such capacity.

(f) “Independent Directors” shall mean those members of the Board consisting of directors who are not parties to the Claim.

(g) “Independent Legal Counsel” shall mean an attorney or firm of attorneys, selected in accordance with the provisions of Section 3(e) hereof, who shall not have otherwise performed services for the Company or Indemnitee within the last three years (other than with respect to matters concerning the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity agreements).

(h) “Other Liabilities” shall mean judgments, fines, penalties and amounts paid in settlement (if such settlement is approved in advance by the Company, which approval shall not be unreasonably withheld) of any Claim regarding any Indemnifiable Event and any federal, state, local or foreign taxes imposed on the Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement.

(i) References to “other enterprises” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on Indemnitee with respect to an employee benefit plan; and references to “serving at the request of the Company” shall include any service as a director, officer, employee, agent or fiduciary of the Company which imposes duties on, or involves services by, such director, officer, employee, agent or fiduciary with respect to an employee benefit plan, its participants or its beneficiaries; and if Indemnitee acted in good faith and in a manner Indemnitee reasonably believed to be in the interest of the participants and beneficiaries of an employee benefit plan, Indemnitee shall be deemed to have acted in a manner “not opposed to the best interests of the Company” as referred to in this Agreement.

(j) “Reviewing Party” shall mean an election made from among the following: (i) those members of the Board who are Independent Directors even though less than a quorum; (ii) a committee of Independent Directors designated by a majority of the Independent Directors, even though less than a quorum; or (iii) Independent Legal Counsel selected by the Indemnitee and approved by the Company (which approval shall not be unreasonably withheld).

 

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2. Indemnification .

(a) Indemnification of Expenses and Other Liabilities. The Company shall indemnify Indemnitee to the fullest extent permitted by law if Indemnitee was or is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, any Claim by reason of (or arising in part out of) any Indemnifiable Event against Expenses and Other Liabilities, including all interest, assessments and other charges paid or payable in connection with or in respect of such Expenses. Indemnitee hereby agrees to repay to the Company all amounts advanced to Indemnitee hereunder if it is ultimately determined that Indemnitee is not entitled to indemnification hereunder. Other than in respect of Expense Advances paid in accordance with Section 3(a) hereof, such payment of Expenses shall be made by the Company as soon as practicable but in any event no later than five (5) business days after written demand by Indemnitee therefor is presented to the Company.

(b) Determination of Right to Indemnification. Unless otherwise provided in Section 11 hereof, the Company shall indemnify Indemnitee pursuant to Section 2(a) if Indemnitee has not failed to meet the applicable standard of conduct for indemnification. With respect to all matters arising concerning whether or not the Indemnitee has met the applicable standard of conduct, the Indemnitee shall be entitled to select the Reviewing Party. The Reviewing Party shall determine whether and to what extent Indemnitee would be permitted to be indemnified under applicable law and the Company and Idemnitee agree to abide by such determination, which, if made by Independent Legal Counsel shall be made in a written opinion.

(c) Mandatory Payment of Expenses. Notwithstanding any other provision of this Agreement other than Section 11 hereof, to the extent that Indemnitee has been successful on the merits or otherwise, including, without limitation, the dismissal of an action without prejudice, in defense of any Claim regarding any Indemnifiable Event, Indemnitee shall be indemnified against all Expenses incurred by Indemnitee in connection therewith.

3. Expenses; Indemnification Procedure .

(a) Advancement of Expenses. The Company shall advance all Expenses incurred by Indemnitee. The advances to be made hereunder shall be paid by the Company to Indemnitee as soon as practicable but in any event no later than 30 days after written demand by Indemnitee therefor to the Company. Indemnitee hereby agrees to repay to the Company all amounts advanced to Indemnitee hereunder if it is ultimately determined that Indemnitee is not entitled to indemnification hereunder. The Company’s obligation to advance Expenses shall terminate with respect to any Claim as to which the Indemnitee shall have entered a plea of guilty or nolo contendere, or an equivalent plea acknowledging guilt.

 

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(b) Notice/Cooperation by Indemnitee. Indemnitee shall, as a condition precedent to Indemnitee’s right to be indemnified under this Agreement, give the Company notice in writing as soon as practicable of any Claim made against Indemnitee for which indemnification will or could be sought under this Agreement; provided however that the failure to so provide notice to the Company shall not relieve the Company from any liability that it may have to Indemnitee hereunder unless the Company’s ability to participate in the defense of such claim was materially and adversely affected by such failure. Notice to the Company shall be directed to the Chief Executive Officer of the Company at the address shown on the signature page of this Agreement (or such other address as the Company shall designate in writing to Indemnitee). In addition, Indemnitee shall give the Company such information and cooperation as it may reasonably require and as shall be within Indemnitee’s power, to the extent that doing so is consistent with the exercise of the Indemnitee’s rights under the federal and state Constitutions. Company shall provide Indemnitee with such information and cooperation as Indemnitee may reasonably require, to the extent that doing so is consistent with the Company’s obligation to cooperate with regulatory or law enforcement agencies.

(c) No Presumptions; Burden of Proof. For purposes of this Agreement, the termination of any Claim by judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law.

(d) Notice to Insurers. If, at the time of the receipt by the Company of a notice of a Claim pursuant to Section 3(b) hereof, the Company has liability insurance in effect which may cover such Claim, the Company shall give prompt notice of the commencement of such Claim to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Claim in accordance with the terms of such policies. The Company shall keep Indemnitee reasonably informed as to the status of all relevant insurance matters.

(e) Selection of Counsel. In the event the Company shall be obligated hereunder to pay the Expenses of any Claim the Company, if appropriate, shall be entitled to assume the defense of such Claim with counsel approved by Indemnitee (not to be unreasonably withheld) upon the delivery to Indemnitee of written notice of the Company’s election so to do. After delivery of such notice, approval of such counsel by Indemnitee and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees of counsel subsequently incurred by Indemnitee with respect to the same Claim; provided that, (i) Indemnitee shall have the right to employ Indemnitee’s separate counsel in any such Claim at Indemnitee’s own expense and (ii) if (A) the employment of separate counsel by Indemnitee has been previously authorized by the Company, (B) Indemnitee shall have reasonably concluded that there may be a conflict of interest between the Company and Indemnitee in the conduct of any such defense, or (C) the Company shall not continue to retain such counsel to defend such Claim, then the fees and expenses of Indemnitee’s separate counsel shall be considered an Expense.

 

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4. Additional Indemnification Rights; Nonexclusivity; Company Obligations Primary .

(a) Scope. The Company hereby agrees to indemnify the Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Company’s Certificate of Incorporation, the Company’s Bylaws (as now or hereafter in effect) or by statute. In the event of any change after the date of this Agreement in any applicable law, statute or rule which expands the right of a Delaware corporation to indemnify a member of its board of directors or an officer, employee, agent or fiduciary, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits afforded by such change. In the event of any change in any applicable law, statute or rule which narrows the right of a Delaware corporation to indemnify a member of its board of directors or an officer, employee, agent or fiduciary, such change, to the extent not otherwise required by such law, statute or rule to be applied to this Agreement, shall have no effect on this Agreement or the parties’ rights and obligations hereunder except as set forth in Section 11(a) hereof.

(b) Nonexclusivity. The indemnification provided by this Agreement shall be in addition to any rights to which Indemnitee may be entitled under the Company’s Certificate of Incorporation, its Bylaws (as now hereafter in effect), any other agreement, any vote of stockholders or disinterested directors, the General Corporation Law of the State of Delaware, or otherwise. The indemnification provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though Indemnitee may have ceased to serve in such capacity.

(c) Company Obligations Primary. The Company hereby acknowledges that Indemnitee may have rights to indemnification for Expenses and Other Liabilities provided by [name of VC or other sponsoring organization (“Other Indemnitor”)]. The Company agrees with Indemnitee that the Company is the indemnitor of first resort of Indemnitee with respect to matters for which indemnification is provided under this Agreement and that the Company will be obligated to make all payments due to or for the benefit of Indemnitee under this Agreement without regard to any rights that Indemnitee may have against the Other Indemnitor. The Company hereby waives any equitable rights to contribution or indemnification from the Other Indemnitor in respect of any amounts paid to Indemnitee hereunder. The Company further agrees that no payment of Expenses or Other Liabilities by the Other Indemnitor to or for the benefit of Indemnitee shall affect the obligations of the Company hereunder, and that the Company shall be obligated to repay the Other Indemnitor for all amounts so paid or reimbursed to the extent that the Company has an obligation to indemnify Indemnitee for such Expenses or Other Liabilities hereunder.

 

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5. Contribution .

(a) Whether or not the indemnification provided in Section 2 hereof is available, in respect of any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall, unless indemnification would not be available as a result of Section 11 hereof, pay, in the first instance, the entire amount of any judgment or settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such payment and the Company hereby waives and relinquishes any right of contribution it may have against Indemnitee. The Company shall not enter into any settlement of any action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding) unless such settlement provides for a full and final release of all claims asserted against Indemnitee.

(b) Without diminishing or impairing the obligations of the Company set forth in the preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any portion of any judgment or settlement in any threatened, pending or completed action, suit or proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), the Company shall contribute to the amount of expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits received by the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, from the transaction from which such action, suit or proceeding arose; provided, however, that the proportion determined on the basis of relative benefit may, to the extent necessary to conform to law, be further adjusted by reference to the relative fault of the Company and all officers, directors or employees of the Company other than Indemnitee who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in such expenses, judgments, fines or settlement amounts, as well as any other equitable considerations which the Law may require to be considered. The relative fault of the Company and all officers, directors or employees of the Company, other than Indemnitee, who are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree to which their actions were motivated by intent to gain personal profit or advantage, the degree to which their liability is primary or secondary and the degree to which their conduct is active or passive.

(c) The Company hereby agrees to fully indemnify and hold Indemnitee harmless from any claims of contribution which may be brought by officers, directors or employees of the Company, other than Indemnitee, who may be jointly liable with Indemnitee.

(d) To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever other than the reasons set forth in Section 11 hereof, the Company, in

 

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lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses and Other Liabilities, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such proceeding; and/or (ii) the relative fault of the Company (and its directors (other than Indemnitee) officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

6. Settlement . The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration) it shall be presumed that Indemnitee has been successful on the merits or otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall have the burden of proof.

7. No Duplication of Payments . The Company shall not be liable under this Agreement to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee has otherwise actually received payment (under any insurance policy, provision of the Company’s Certificate of Incorporation, Bylaw (as now or hereafter in effect) or otherwise) of the amounts otherwise indemnifiable hereunder.

8. Partial Indemnification . If Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of Expenses or Other Liabilities incurred in connection with any Claim, but not, however, for all of the total amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion of such Expenses and Other Liabilities to which Indemnitee is entitled.

9. No Imputation . The knowledge or actions, or failure to act, of any director, officer, agent or employee of the Company or the Company itself shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

10. Liability Insurance . For the duration of Indemnitee’s service as a director or officer or other agent of the Company, and thereafter for so long as Indemnitee shall be subject to any pending or possible Claim by reason of any Indemnifiable Event, the Company shall use commercially reasonable efforts (taking into account the scope and amount of coverage available relative to the cost thereof) to cause to be maintained in effect policies of liability insurance providing coverage for directors and officers of the Company that are at least substantially comparable in scope and amount to that provided by the Company’s current policies of directors’ and officers’ liability insurance. To the extent the Company maintains liability insurance applicable to directors, officers, employees, agents or fiduciaries, Indemnitee shall be covered by such policies in such a manner as to provide Indemnitee the same rights and benefits as are provided to the most favorably insured of the Company’s directors, if Indemnitee is a director; or of the Company’s officers, if Indemnitee is not a director of the Company but is an officer; or of the Company’s key employees, agents or fiduciaries, if Indemnitee is not an officer or director but is a key employee, agent or fiduciary.

 

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11. Exceptions . Notwithstanding any other provision of this Agreement, the Company shall not be obligated pursuant to the terms of this Agreement:

(a) Excluded Action or Omissions. To indemnify Indemnitee for acts, omissions or transactions if a final decision by a court having jurisdiction in the matter shall determine that such indemnification is prohibited by applicable law.

(b) Claims Initiated by Indemnitee. To indemnify Expenses or Other Liabilities or advance Expenses to Indemnitee with respect to Claims initiated or brought voluntarily by Indemnitee and not by way of defense, except (i) with respect to actions or proceedings brought to establish or enforce a right to indemnification under this Agreement or any other agreement or insurance policy or under the Company’s Certificate of Incorporation or Bylaws now or hereafter in effect relating to Claims for Indemnifiable Events, (ii) in specific cases if the Board of Directors has approved the initiation or bringing of such Claim, or (iii) as otherwise required under Section 145 of the Delaware General Corporation Law, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advance Expense payment or insurance recovery, as the case may be.

(c) Lack of Good Faith. To indemnify Indemnitee for any Expenses or Other Liabilities incurred by the Indemnitee with respect to any proceeding instituted by Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by the Indemnitee in such proceeding was not made in good faith or was frivolous.

(d) Claims Under Section 16(b). To indemnify Indemnitee for the payment of profits arising from the purchase and sale by Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute; provided that the Company shall advance Expenses in connection with Indemnitee’s defense of a claim under Section 16(b), which advances shall be repaid to the Company if it is ultimately determined that Indemnitee is not entitled to indemnification of such Expenses.

12. Period of Limitations . No legal action shall be brought and no cause of action shall be asserted by or in the right of the Company against Indemnitee, Indemnitee’s estate, spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, that if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern.

13. Counterparts . This Agreement may be executed in one or more counterparts, each of which shall constitute an original.

 

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14. Binding Effect; Successors and Assigns . This Agreement shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective successors, assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), spouses, heirs and personal and legal representatives. The Company shall require and cause any successor (whether direct or indirect, and whether by purchase, merger, consolidation or otherwise) to all, substantially all, or a substantial part, of the business or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as a director, officer, employee, agent or fiduciary (as applicable) of the Company or of any other enterprise at the Company’s request.

15. Attorneys’ Fees . In the event that any action is instituted by Indemnitee under this Agreement or under any liability insurance policies maintained by the Company to enforce or interpret any of the terms hereof or thereof, Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee with respect to such action, regardless of whether Indemnitee is ultimately successful in such action, and shall be entitled to the advancement of Expenses with respect to such action, unless as a part of such action a court of competent jurisdiction over such action determines that each of the material assertions made by Indemnitee as a basis for such action was not made in good faith or was frivolous. In the event of an action instituted by or in the name of the Company under this Agreement to enforce or interpret any of the terms of this Agreement, Indemnitee shall be entitled to be paid all Expenses incurred by Indemnitee in defense of such action (including costs and Expenses incurred with respect to Indemnitee’s counterclaims and cross-claims made in such action), and shall be entitled to the advancement of Expenses with respect to such action.

16. Notice . All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed duly given (i) if delivered by hand and signed for by the party addressed, on the date of such delivery, or (ii) if mailed by domestic certified or registered mail with postage prepaid, on the third business day after the date postmarked. Addresses for notice to either party are as shown on the signature page of this Agreement, or as subsequently modified by written notice.

17. Consent to Jurisdiction . The Company and Indemnitee each hereby irrevocably consent to the jurisdiction of the courts of the State of Delaware for all purposes in connection with any action or proceeding which arises out of or relates to this Agreement and agree that any action instituted under this Agreement shall be commenced, prosecuted and continued only in the Court of Chancery of the State of Delaware in and for New Castle County, which shall be the exclusive and only proper forum for adjudicating such a claim.

18. Severability . The provisions of this Agreement shall be severable in the event that any of the provisions hereof (including any provision within a single section, paragraph or sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law. Furthermore, to the fullest extent possible, the provisions of this Agreement (including, without limitations, each portion of this Agreement containing any provision held to be invalid, void or otherwise unenforceable, that is not itself invalid, void or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

 

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19. Choice of Law . This Agreement shall be governed by and its provisions construed and enforced in accordance with the laws of the State of Delaware as applied to contracts between Delaware residents entered into and to be performed entirely within the State of Delaware.

20. Subrogation . In the event of payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all documents required and shall do all acts that may be necessary to secure such rights and to enable the Company effectively to bring suit to enforce such rights.

21. Amendment and Termination . Due to the uncertain application of any statutes of limitations that may govern any Claim, this Agreement shall be of indefinite duration. No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by both the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed to be or shall constitute a waiver of any other provisions hereof (whether or not similar), nor shall such waiver constitute a continuing waiver.

22. Integration and Entire Agreement . This Agreement sets forth the entire understanding between the parties hereto and supersedes and merges all previous written and oral negotiations, commitments, understandings and agreements relating to the subject matter hereof between the parties hereto. If the Company and Indemnitee have previously entered into an indemnification agreement providing for indemnification of Indemnitee by the Company, the parties’ entry into this Indemnification Agreement shall be deemed to amend and restate such Indemnification Agreement to read in its entirety as, and to be superseded by, this Indemnification Agreement.

23. No Construction as Employment Agreement . Nothing contained in this Agreement shall be construed as giving Indemnitee any right to be retained in the employ of the Company or any of its subsidiaries or affiliated entities.

[Signature Page Next]

 

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IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement as of the date first above written.

 

FACEBOOK, INC.
By:    

 

AGREED TO AND ACCEPTED

INDEMNITEE:

 

(signature)

 
 
 
(address)

EXHIBIT 10.2

FACEBOOK, INC.

2005 STOCK PLAN

(as amended April 2006)

(as amended July 2006)

(as amended April 2007)

(as amended May 2007)

(as amended July 2007)

(as amended September 2007)

(as amended October 2007)

(as amended December 2007)

(as amended twice in August 2008)

(as amended January 2009)

(as amended March 2009)

(as amended June 2009)

(as amended August 2009)

(as amended in October 2009)

(as amended in November 2009)

(as amended in December 2009)

(as amended in October 2010)

(as amended in December 2010)

(as amended in December 2011)

(as amended in January 2012)

1. Purposes of the Plan . The purposes of this 2005 Stock Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees and Consultants and to promote the success of the Company’s business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant of an option and subject to the applicable provisions of Section 422 of the Code and the regulations and interpretations promulgated thereunder. Stock Purchase Rights and Restricted Stock Units may also be granted under the Plan.

2. Definitions . As used herein, the following definitions shall apply:

a. “ Administrator means the Board or its Committee appointed pursuant to Section 4 of the Plan.

b. Affiliate means an entity other than a Subsidiary (as defined below) which, together with the Company, is under common control of a third person or entity.


c. Applicable Laws means the legal requirements relating to the administration of stock option and restricted stock purchase plans, including under applicable U.S. state corporate laws, U.S. federal and applicable state securities laws, other U.S. federal and state laws, the Code, any Stock Exchange rules or regulations and the applicable laws, rules and regulations of any other country or jurisdiction where Awards are granted under the Plan, as such laws, rules, regulations and requirements shall be in place from time to time.

d. “ Award ” means any grant made under this Plan, including any Option, Stock Purchase Right or Restricted Stock Unit.

e. Board means the Board of Directors of the Company.

f. Cause for termination of a Participant’s Continuous Service Status will exist if the Participant is terminated by the Company for any of the following reasons: (i) Participant’s willful failure substantially to perform his or her duties and responsibilities to the Company or deliberate violation of a Company policy; (ii) Participant’s commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in material injury to the Company; (iii) unauthorized use or disclosure by Participant of any proprietary information or trade secrets of the Company or any other party to whom the Participant owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (iv) Participant’s willful breach of any of his or her obligations under any written agreement or covenant with the Company. The determination as to whether a Participant is being terminated for Cause shall be made in good faith by the Company and shall be final and binding on the Participant. The foregoing definition does not in any way limit the Company’s ability to terminate a Participant’s employment or consulting relationship at any time as provided in Section 5(d) below, and the term “Company” will be interpreted to include any Subsidiary, Parent or Affiliate, as appropriate.

g. Change of Control means (1) a sale of all or substantially all of the Company’s assets or (2) any merger, consolidation or other business combination transaction of the Company with or into another corporation, entity or person, other than a transaction in which the holders of at least a majority of the shares of voting capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by such shares remaining outstanding or by their being converted into shares of voting capital stock of the surviving entity) a majority of the total voting power represented by the shares of voting capital stock of the Company (or the surviving entity) outstanding immediately after such transaction; provided , however , that none of the following shall be considered a Change of Control: (a) a merger effected exclusively for the purpose of changing the domicile of the Company, (b) an equity financing in which the Company is the surviving corporation, or (c) a transaction in which the stockholders of the Company immediately prior to the transaction own 50% or more of the voting power of the surviving corporation following the transaction.

h. Code means the Internal Revenue Code of 1986, as amended.

i. Committee means one or more committees or subcommittees of the Board appointed by the Board to administer the Plan in accordance with Section 4 below.

 

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j. Common Stock means the Class B Common Stock of the Company.

k. Company means Facebook, Inc., a Delaware corporation.

l. Consultant means any person, including an advisor, who is engaged by the Company or any Parent, Subsidiary or Affiliate to render services and is compensated for such services, and any director of the Company whether compensated for such services or not.

m. Continuous Service Status means the absence of any interruption or termination of service as an Employee or Consultant. Continuous Service Status as an Employee or Consultant shall not be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Administrator, provided that such leave is for a period of not more than ninety (90) days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; or (iv) in the case of transfers between locations of the Company or between the Company, its Parents, Subsidiaries, Affiliates or their respective successors. A change in status from an Employee to a Consultant or from a Consultant to an Employee will not constitute an interruption of Continuous Service Status.

n. Corporate Transaction means a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other capital reorganization or business combination transaction of the Company with or into another corporation, entity or person, or the direct or indirect acquisition (including by way of a tender or exchange offer) by any person, or persons acting as a group, of beneficial ownership or a right to acquire beneficial ownership of shares representing a majority of the voting power of the then outstanding shares of capital stock of the Company.

o. Director means a member of the Board.

p. Employee means any person employed by the Company or any Parent, Subsidiary or Affiliate, with the status of employment determined based upon such factors as are deemed appropriate by the Administrator in its discretion, subject to any requirements of the Code or the Applicable Laws. The payment by the Company of a director’s fee to a Director shall not be sufficient to constitute “employment” of such Director by the Company.

q. Exchange Act means the Securities Exchange Act of 1934, as amended.

r. Fair Market Value means, as of any date, the fair market value of the Common Stock, as determined by the Administrator in good faith on such basis as it deems appropriate and applied consistently with respect to Participants. Whenever possible, the determination of Fair Market Value shall be based upon the closing price for the Shares as reported in the Wall Street Journal or such other source as the Administrator deems reliable for the applicable date.

 

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s. Incentive Stock Option means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code, as designated in the applicable Option Agreement.

t. “ Listed Security ” means any security of the Company that is listed or approved for listing on a national securities exchange or designated or approved for designation as a national market system security on an interdealer quotation system by the Financial Industry Regulatory Authority.

u. Named Executive means any individual who, on the last day of the Company’s fiscal year, is the chief executive officer of the Company (or is acting in such capacity) or among the four most highly compensated officers of the Company (other than the chief executive officer). Such officer status shall be determined pursuant to the executive compensation disclosure rules under the Exchange Act.

v. Nonstatutory Stock Option means an Option not intended to qualify as an Incentive Stock Option, as designated in the applicable Option Agreement.

w. Option means a stock option granted pursuant to the Plan.

x. Option Agreement means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of an Option granted under the Plan and includes any documents attached to or incorporated into such Option Agreement, including, but not limited to, a notice of stock option grant and a form of exercise notice.

y. Option Exchange Program means a program approved by the Administrator whereby outstanding Options are exchanged for Options with a lower exercise price or are amended to decrease the exercise price as a result of a decline in the Fair Market Value of the Common Stock.

z. Optioned Stock means the Common Stock subject to an Option.

aa. Optionee means an Employee or Consultant who receives an Option.

bb. Parent means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code, or any successor provision.

cc. Participant means any holder of one or more Awards, or the Shares issuable or issued upon exercise of such Awards, under the Plan.

dd. Plan means this 2005 Stock Plan, as amended from time to time.

ee. Reporting Person means an officer, Director, or greater than ten percent stockholder of the Company within the meaning of Rule 16a-2 under the Exchange Act, who is required to file reports pursuant to Rule 16a-3 under the Exchange Act.

 

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ff. Restricted Stock means Shares of Common Stock acquired pursuant to a grant of a Stock Purchase Right under Section 11 below.

gg. Restricted Stock Purchase Agreement means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of a Stock Purchase Right granted under the Plan and includes any documents attached to such agreement.

hh. Restricted Stock Unit means the grant of a right to have Shares of Common Stock issued pursuant to an Award made under Section 12 below.

ii. Restricted Stock Unit Agreement means a written document, the form(s) of which shall be approved from time to time by the Administrator, reflecting the terms of a Restricted Stock Unit and includes any documents attached to such agreement.

jj. Rule 16b-3 means Rule 16b-3 promulgated under the Exchange Act, as amended from time to time, or any successor provision.

kk. Share means a share of the Common Stock, as adjusted in accordance with Section 15 of the Plan.

ll. Stock Exchange means any stock exchange or consolidated stock price reporting system on which prices for the Common Stock are quoted at any given time.

mm. Stock Purchase Right means the right to purchase Common Stock pursuant to Section 11 below.

nn. Subsidiary means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code, or any successor provision.

oo. Ten Percent Holder means a person who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary.

3. Stock Subject to the Plan . Subject to the provisions of Section 15 of the Plan, the maximum aggregate number of Shares that may be sold under the Plan is 971,314,985 Shares of Common Stock. The Shares may be authorized, but unissued, or reacquired Common Stock. If an award should expire or become unexercisable for any reason without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares that were subject thereto shall, unless the Plan shall have been terminated, become available for future grant under the Plan. In addition, any Shares of Common Stock which are retained by the Company upon exercise of an award in order to satisfy the exercise or purchase price for such award or any withholding taxes due with respect to such exercise or purchase shall be treated as not issued and shall continue to be available under the Plan. Shares issued under the Plan and later repurchased by the Company pursuant to any repurchase right which the Company may have shall be available for future grant under the Plan; provided, however, that no more than 971,314,985 shares may be granted under the Plan pursuant to Incentive Stock Options.

 

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4. Administration of the Plan .

a. General . The Plan shall be administered by the Board or a Committee, or a combination thereof, as determined by the Board. The Plan may be administered by different administrative bodies with respect to different classes of Participants and, if permitted by the Applicable Laws, the Board may authorize one or more officers to make awards under the Plan.

b. Committee Composition . If a Committee has been appointed pursuant to this Section 4, such Committee shall continue to serve in its designated capacity until otherwise directed by the Board. From time to time the Board may increase the size of any Committee and appoint additional members thereof, remove members (with or without cause) and appoint new members in substitution therefor, fill vacancies (however caused) and remove all members of a Committee and thereafter directly administer the Plan, all to the extent permitted by the Applicable Laws and, in the case of a Committee administering the Plan in accordance with the requirements of Rule 16b-3 or Section 162(m) of the Code, to the extent permitted or required by such provisions. The Committee shall in all events conform to any requirements of the Applicable Laws.

c. Powers of the Administrator . Subject to the provisions of the Plan and in the case of a Committee, the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion:

(i) to determine the Fair Market Value of the Common Stock (which determination shall be final, binding and conclusive for all purposes), in accordance with Section 2.r. of the Plan and to interpret 2.r of the Plan in connection with circumstances that impact the Fair Market Value, provided that such determination and interpretation shall be applied consistently with respect to Participants under the Plan;

(ii) to select the Employees and Consultants to whom Plan awards may from time to time be granted;

(iii) to determine whether and to what extent Plan awards are granted;

(iv) to determine the number of Shares of Common Stock to be covered by each award granted;

(v) to approve the form(s) of agreement(s) used under the Plan;

(vi) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any award granted hereunder, which terms and conditions include but are not limited to the exercise or purchase price, the time or times when awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, any pro rata adjustment to vesting as a result of a Participant’s transitioning from full- to part-time service (or vice versa), and any restriction or limitation regarding any Optioned Stock or Award, based in each case on such factors as the Administrator, in its sole discretion, shall determine;

 

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(vii) to determine whether and under what circumstances an Award may be settled in cash under Section 10(c) instead of Common Stock;

(viii) to implement an Option Exchange Program on such terms and conditions as the Administrator in its discretion deems appropriate, provided that no amendment or adjustment to an Option that would materially and adversely affect the rights of any Optionee shall be made without the prior written consent of the Optionee;

(ix) to adjust the vesting of an Award held by an Employee or Consultant as a result of a change in the terms or conditions under which such person is providing services to the Company;

(x) to construe and interpret the terms of the Plan and Awards, which constructions, interpretations and decisions shall be final and binding on all Participants; and

(xi) in order to fulfill the purposes of the Plan and without amending the Plan, to modify Awards to Participants who are foreign nationals or employed outside of the United States in order to recognize differences in local law, tax policies or customs.

5. Eligibility .

(a) Recipients of Grants . Employees and Consultants may be granted any of the types of Awards provided under the Plan, provided however that Incentive Stock Options may be granted only to Employees (excepting Employees of Affiliates).

(b) Type of Option . Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.

(c) ISO $100,000 Limitation . Notwithstanding any designation under Section 5(b), to the extent that the aggregate Fair Market Value of Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by any Optionee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 5(c), Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of the Shares subject to an Incentive Stock Option shall be determined as of the date of the grant of such Option.

(d) No Employment Rights . The Plan shall not confer upon any Participant any right with respect to continuation of an employment or consulting relationship with the Company, nor shall it interfere in any way with such Participant’s right or the Company’s right to terminate the employment or consulting relationship at any time for any reason.

6. Term of Plan . The Plan shall become effective upon its adoption by the Board of Directors. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 17 of the Plan.

 

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7. Term of Option . The term of each Option shall be the term stated in the Option Agreement; provided that the term shall be no more than ten years from the date of grant thereof or such shorter term as may be provided in the Option Agreement and provided further that, in the case of an Incentive Stock Option granted to a person who at the time of such grant is a Ten Percent Holder, the term of the Option shall be five (5) years from the date of grant thereof or such shorter term as may be provided in the Option Agreement.

8. [ Reserved .]

9. Option Exercise Price and Consideration .

(a) Exercise Price . The per Share exercise price for the Shares to be issued pursuant to exercise of an Option shall be such price as is determined by the Administrator and set forth in the Option Agreement, but shall be subject to the following:

(i) In the case of an Incentive Stock Option

(A) granted to an Employee who at the time of grant is a Ten Percent Holder, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant; or

(B) granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant.

(ii) In the case of a Nonstatutory Stock Option the per share Exercise Price shall be such price as determined by the Administrator, but shall not be less than 100% of the Fair Market Value on the date of grant unless expressly determined by the Administrator.

(iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a merger or other corporate transaction.

(b) Permissible Consideration . The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant) and may consist entirely of (1) cash; (2) check; (3) subject to any requirements of the Applicable Laws (including without limitation Section 153 of the Delaware General Corporation Law), delivery of Optionee’s promissory note having such recourse, interest, security and redemption provisions as the Administrator determines to be appropriate after taking into account the potential accounting consequences of permitting an Optionee to deliver a promissory note; (4) cancellation of indebtedness; (5) other Shares that have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which the Option is exercised; (6) if, as of the date of exercise of an Option the Company then is permitting employees to engage in a cashless exercise program involving one or more brokers, through such a program that complies with the Applicable Laws (including without limitation the requirements of Regulation T and other applicable regulations promulgated by the Federal Reserve Board) and that ensures prompt delivery to the Company of the amount required to pay

 

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the exercise price and any applicable withholding taxes; or (7) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company and the Administrator may, in its sole discretion, refuse to accept a particular form of consideration at the time of any Option exercise.

10. Exercise of Option .

(a) General .

(i) Exercisability . Any Option granted hereunder shall be exercisable at such times and under such conditions as determined by the Administrator, consistent with the term of the Plan and reflected in the Option Agreement, including vesting requirements and/or performance criteria with respect to the Company and/or the Optionee.

(ii) Leave of Absence . The Administrator shall have the discretion to determine whether and to what extent the vesting of Options shall be tolled during any unpaid leave of absence; provided, however, that in the absence of such determination, vesting of Options shall be tolled during any such unpaid leave (unless otherwise required by the Applicable Laws). In the event of military leave, if required by Applicable Laws, vesting shall continue for the longest period that vesting continues under any other statutory or Company approved leave of absence and, upon a Participant’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and Reemployment Rights Act), he or she shall be given vesting credit with respect to Options to the same extent as would have applied had the Participant continued to provide services to the Company throughout the leave on the same terms as he or she was providing services immediately prior to such leave.

(iii) Minimum Exercise Requirements . An Option may not be exercised for a fraction of a Share. The Administrator may require that an Option be exercised as to a minimum number of Shares, provided that such requirement shall not prevent an Optionee from exercising the full number of Shares as to which the Option is then exercisable.

(iv) Procedures for and Results of Exercise . An Option shall be deemed exercised when written notice of such exercise has been given to the Company in accordance with the terms of the Option by the person entitled to exercise the Option and the Company has received full payment for the Shares with respect to which the Option is exercised. Full payment may, as authorized by the Administrator, consist of any consideration and method of payment allowable under Section 9(b) of the Plan, provided that the Administrator may, in its sole discretion, refuse to accept any form of consideration at the time of any Option exercise.

Exercise of an Option in any manner shall result in a decrease in the number of Shares that thereafter may be available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised.

(v) Rights as Stockholder . Until the issuance of the Shares (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer

 

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agent of the Company), no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. No adjustment will be made for a dividend or other right for which the record date is prior to the date the stock certificate is issued, except as provided in Section 15 of the Plan.

(b) Termination of Employment or Consulting Relationship . Except as otherwise set forth in this Section 10(b), the Administrator shall establish and set forth in the applicable Option Agreement the terms and conditions upon which an Option shall remain exercisable, if at all, following termination of an Optionee’s Continuous Service Status, which provisions may be waived or modified by the Administrator at any time. Unless the Administrator otherwise provides in the Option Agreement, to the extent that the Optionee is not vested in Optioned Stock at the date of termination of his or her Continuous Service Status, or if the Optionee (or other person entitled to exercise the Option) does not exercise the Option to the extent so entitled within the time specified in the Option Agreement or below (as applicable), the Option shall terminate and the Optioned Stock underlying the unexercised portion of the Option shall revert to the Plan. In no event may any Option be exercised after the expiration of the Option term as set forth in the Option Agreement (and subject to Section 7).

The following provisions (1) shall apply to the extent an Option Agreement does not specify the terms and conditions upon which an Option shall terminate upon termination of an Optionee’s Continuous Service Status, and (2) establish the minimum post-termination exercise periods that may be set forth in an Option Agreement:

(i) Termination other than Upon Disability or Death or for Cause . In the event of termination of Optionee’s Continuous Service Status other than under the circumstances set forth in subsections (ii) through (iv) below, such Optionee may exercise an Option for 30 days following such termination to the extent the Optionee was vested in the Optioned Stock as of the date of such termination. No termination shall be deemed to occur and this Section 10(b)(i) shall not apply if (i) the Optionee is a Consultant who becomes an Employee, or (ii) the Optionee is an Employee who becomes a Consultant.

(ii) Disability of Optionee . In the event of termination of an Optionee’s Continuous Service Status as a result of his or her disability (including a disability within the meaning of Section 22(e)(3) of the Code), such Optionee may exercise an Option at any time within six months following such termination to the extent the Optionee was vested in the Optioned Stock as of the date of such termination.

(iii) Death of Optionee . In the event of the death of an Optionee during the period of Continuous Service Status since the date of grant of the Option, or within thirty days following termination of Optionee’s Continuous Service Status, the Option may be exercised by Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance at any time within twelve months following the date of death, but only to the extent the Optionee was vested in the Optioned Stock as of the date of death or, if earlier, the date the Optionee’s Continuous Service Status terminated.

(iv) Termination for Cause . In the event of termination of an Optionee’s Continuous Service Status for Cause, any Option (including any exercisable portion

 

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thereof) held by such Optionee shall immediately terminate in its entirety upon first notification to the Optionee of termination of the Optionee’s Continuous Service Status. If an Optionee’s employment or consulting relationship with the Company is suspended pending an investigation of whether the Optionee shall be terminated for Cause, all the Optionee’s rights under any Option likewise shall be suspended during the investigation period and the Optionee shall have no right to exercise any Option. This Section 10(b)(iv) shall apply with equal effect to vested Shares acquired upon exercise of an Option granted on any date on which the Common Stock is not a Listed Security to a person other than an officer, Director or Consultant, in that the Company shall have the right to repurchase such Shares from the Participant upon the following terms: (A) the repurchase is made within 90 days of termination of the Participant’s Continuous Service Status for Cause at the Fair Market Value of the Shares as of the date of termination, (B) consideration for the repurchase consists of cash or cancellation of purchase money indebtedness, and (C) the repurchase right terminates upon the effective date of the Company’s initial public offering of its Common Stock. With respect to vested Shares issued upon exercise of an Option granted to any officer, Director or Consultant, the Company’s right to repurchase such Shares upon termination of the Participant’s Continuous Service Status for Cause shall be made at the Participant’s original cost for the Shares and shall be effected pursuant to such terms and conditions, and at such time, as the Administrator shall determine. Nothing in this Section 10(b)(iv) shall in any way limit the Company’s right to purchase unvested Shares issued upon exercise of an Option as set forth in the applicable Option Agreement.

(c) Buyout Provisions . The Administrator may at any time offer to buy out for a payment in cash or Shares an Option previously granted under the Plan based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made.

11. Stock Purchase Rights .

(a) Rights to Purchase . When the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing of the terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, and the time within which such person must accept such offer. In the case of a Stock Purchase Right granted prior to the date, if any, on which the Common Stock becomes a Listed Security and if required by the Applicable Laws at that time, the purchase price of Shares subject to such Stock Purchase Rights shall not be less than 85% of the Fair Market Value of the Shares as of the date of the offer, or, in the case of a Ten Percent Holder, the price shall not be less than 100% of the Fair Market Value of the Shares as of the date of the offer. If the Applicable Laws do not impose the requirements set forth in the preceding sentence and with respect to any Stock Purchase Rights granted after the date, if any, on which the Common Stock becomes a Listed Security, the purchase price of Shares subject to Stock Purchase Rights shall be as determined by the Administrator. The offer to purchase Shares subject to Stock Purchase Rights shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator.

 

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(b) Repurchase Option .

(i) General . Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser’s employment with the Company for any reason (including death or disability). Subject to any requirements of the Applicable Laws, the terms of the Company’s repurchase option (including without limitation the price at which, and the consideration for which, it may be exercised, and the events upon which it shall lapse) shall be as determined by the Administrator in its sole discretion and reflected in the Restricted Stock Purchase Agreement.

(ii) Leave of Absence . The Administrator shall have the discretion to determine whether and to what extent the lapsing of Company repurchase rights shall be tolled during any unpaid leave of absence; provided, however, that in the absence of such determination, such lapsing shall be tolled during any such unpaid leave (unless otherwise required by the Applicable Laws). In the event of military leave, if required by Applicable Laws, the lapsing of Company repurchase rights shall continue for the longest period that vesting or lapse or repurchase rights continues under any other statutory or Company approved leave of absence and, upon a Participant’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and Reemployment Rights Act), he or she shall be given “vesting” credit with respect to Shares purchased pursuant to the Restricted Stock Purchase Agreement to the same extent as would have applied had the Participant continued to provide services to the Company throughout the leave on the same terms as he or she was providing services immediately prior to such leave.

(iii) Termination for Cause . In the event of termination of a Participant’s Continuous Service Status for Cause, the Company shall have the right to repurchase from the Participant vested Shares issued upon exercise of a Stock Purchase Right granted to any person other than an officer, Director or Consultant prior to the date, if any, upon which the Common Stock becomes a Listed Security upon the following terms: (A) the repurchase must be made within 90 days of termination of the Participant’s Continuous Service Status for Cause at the Fair Market Value of the Shares as of the date of termination, (B) consideration for the repurchase consists of cash or cancellation of purchase money indebtedness, and (C) the repurchase right terminates upon the effective date of the Company’s initial public offering of its Common Stock. With respect to vested Shares issued upon exercise of a Stock Purchase Right granted to any officer, Director or Consultant, the Company’s right to repurchase such Shares upon termination of such Participant’s Continuous Service Status for Cause shall be made at the Participant’s original cost for the Shares and shall be effected pursuant to such terms and conditions, and at such time, as the Administrator shall determine. Nothing in this Section 11(b)(ii) shall in any way limit the Company’s right to purchase unvested Shares as set forth in the applicable Restricted Stock Purchase Agreement.

(c) Other Provisions . The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. In addition, the provisions of Restricted Stock Purchase Agreements need not be the same with respect to each purchaser.

 

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(d) Rights as a Stockholder . Once the Stock Purchase Right is exercised, the purchaser shall have the rights equivalent to those of a stockholder, and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 15 of the Plan.

12. Restricted Stock Units .

(a) Awards of Restricted Stock Units . A Restricted Stock Unit (“ RSU ”) is an Award to a Participant covering a number of Shares that at a later date may be settled in cash, or by issuance of those Shares.

(b) Terms of RSUs . The Administrator will determine the terms of an RSU including, without limitation: (a) the number of Shares subject to the RSU; (b) the time or times during which the RSU will vest and may be settled; and (c) the consideration to be distributed on settlement, and the effect of termination of a Participant’s Continuous Service Status on each RSU. Participants may simultaneously hold different RSUs that are subject to different criteria as set forth in respective Restricted Stock Unit Agreements. The Administrator shall have the discretion to determine whether and to what extent vesting shall be tolled during any unpaid leave of absence; provided, however, that in the absence of such determination, such vesting shall be tolled during any such unpaid leave (unless otherwise required by the Applicable Laws). In the event of military leave, if required by Applicable Laws, vesting shall continue for the longest period that vesting continues under any other statutory or Company approved leave of absence and, upon a Participant’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and Reemployment Rights Act), he or she shall be given “vesting” credit with respect to Shares purchased pursuant to the Restricted Stock Unit Agreement to the same extent as would have applied had the Participant continued to provide services to the Company throughout the leave on the same terms as he or she was providing services immediately prior to such leave.

(c) Form and Timing of Settlement . Payment of earned RSUs shall be made as soon as practicable after the date(s) determined by the Administrator and set forth in the Restricted Stock Unit Agreement. The Administrator, in its sole discretion, may settle earned RSUs in cash, Shares, or a combination of both.

(d) Termination of Participant’s Continuous Service Status . Except as may be set forth in the Participant’s Restricted Stock Unit Agreement, vesting ceases on termination of such Participant’s Continuous Service Status (unless determined otherwise by the Administrator).

(e) Other Provisions . The Restricted Stock Unit Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. In addition, the provisions of Restricted Stock Unit Agreements need not be the same with respect to each purchaser.

 

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(f) Rights as a Stockholder . Once Shares are issued pursuant to the terms of a Restricted Stock Unit Agreement, the Participant shall have the rights equivalent to those of a stockholder, and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 15 of the Plan.

13. Taxes .

(a) As a condition of the grant, vesting or exercise of an Award, the Participant (or in the case of the Participant’s death, the person to whom the Award passes) shall make such arrangements as the Administrator may require for the satisfaction of any applicable federal, state, local or foreign withholding tax obligations that may arise in connection with such grant, vesting or exercise of the Award or the issuance of Shares. The Company shall not be required to issue any Shares under the Plan until such obligations are satisfied. If the Administrator allows the withholding or surrender of Shares to satisfy a Participant’s tax withholding obligations under this Section 13 (whether pursuant to Section 13(c) or (d), or otherwise), the Administrator shall not allow Shares to be withheld in an amount that exceeds the minimum statutory withholding rates for federal and state tax purposes, including payroll taxes.

(b) In the case of an Employee and in the absence of any other arrangement, the Employee shall be deemed to have directed the Company to withhold or collect from his or her compensation an amount sufficient to satisfy such tax obligations from the next payroll payment otherwise payable after the date of an exercise or settlement of an Award.

(c) In the case of an Employee where the next payroll payment is not sufficient to satisfy such tax obligations, with respect to any remaining tax obligations, in the absence of any other arrangement and to the extent permitted under the Applicable Laws, the Participant shall be deemed to have elected to have the Company withhold from the Shares to be issued upon exercise or settlement (as applicable) of the Award that number of Shares having a Fair Market Value determined as of the applicable Tax Date (as defined below) equal to the minimum amount required to be withheld. For purposes of this Section 13, the Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined under the Applicable Laws (the “ Tax Date ”).

(d) If permitted by the Administrator, in its discretion, a Participant may satisfy his or her minimum tax withholding obligations upon exercise or settlement (as applicable) of an Award by surrendering to the Company Shares that have a Fair Market Value determined as of the applicable Tax Date equal to the amount required to be withheld.

(e) Any election or deemed election by a Participant to have Shares withheld to satisfy tax withholding obligations under Section 13(c) or (d) above shall be irrevocable as to the particular Shares as to which the election is made and shall be subject to the consent or disapproval of the Administrator. Any election by a Participant under Section 13(d) above must be made on or prior to the applicable Tax Date.

 

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(f) In the event an election to have Shares withheld is made by a Participant and the Tax Date is deferred under Section 83 of the Code because no election is filed under Section 83(b) of the Code, the Participant shall receive the full number of Shares with respect to which the Option or Stock Purchase Right is exercised but such Participant shall be unconditionally obligated to tender back to the Company the proper number of Shares on the Tax Date.

14. Non-Transferability of Awards .

(a) General. Except as set forth in this Section 14, Awards may not be sold, pledged, assigned, hypothecated, transferred or disposed of in any manner other than by will or by the laws of descent or distribution , and the Awards and the Shares underlying Awards cannot be the subject of a short position, a “put equivalent position”, or a “call equivalent position” by the Award holder, prior to exercise, as such terms are defined in Rule 16a-1 of the Exchange Act. The designation of a beneficiary by a Participant will not constitute a transfer. An Award may be exercised, during the lifetime of the Participant, only by such Participant or a transferee permitted by this Section 14.

(b) Limited Transferability Rights . Notwithstanding anything else in this Section 14, the Administrator may in its discretion grant Nonstatutory Stock Options or RSUs that may be transferred by instrument to an inter vivos or testamentary trust in which the Options or RSUs are to be passed to beneficiaries upon the death of the trustor (settlor) , to a guardian on the disability or to an executor on death of the Nonstatutory Stock Option or RSU holder, or by gift or pursuant to domestic relations orders to the Participant’s “Immediate Family” (as defined below) , provided that any such permitted transferees may not (i) further transfer RSUs to any parties and (ii) may not transfer Nonstatutory Stock Options to parties other than the Participant or the Participant’s Immediate Family (transfers between a Participant’s Immediate Family and between a Participant’s Immediate Family and Participant are permitted). For the sake of clarification, multiple transfers of Nonstatutory Stock Options may be made, by gift or pursuant to domestic relations orders, back and forth between Immediate Family and a Participant pursuant to this Section 14(b). “ Immediate Family ” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, domestic partner sharing the same household, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive relationships), a trust in which these persons have more than fifty percent of the beneficial interest, a foundation in which these persons (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty percent of the voting interests.

15. Adjustments Upon Changes in Capitalization, Merger or Certain Other Transactions .

(a) Changes in Capitalization . Subject to any action required under Applicable Laws by the stockholders of the Company, the number of Shares of Common Stock covered by each outstanding Award, the numbers of Shares set forth in Section 3, and the number of Shares of Common Stock that have been authorized for issuance under the Plan but as to which no Awards have yet been granted or that have been returned to the Plan upon

 

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cancellation or expiration of an Award, as well as the price per Share of Common Stock covered by each such outstanding Award, shall be proportionately adjusted for any increase or decrease in the number of issued Shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination, recapitalization or reclassification of the Common Stock, or any other increase or decrease in the number of issued Shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Administrator, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares of Common Stock subject to an Award.

(b) Dissolution or Liquidation . In the event of the dissolution or liquidation of the Company, each Award will terminate immediately prior to the consummation of such action, unless otherwise determined by the Administrator.

(c) Corporate Transaction . In the event of a Corporate Transaction (including without limitation a Change of Control), each outstanding Award shall be assumed or an equivalent award shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation (the “ Successor Corporation ”), unless the Successor Corporation does not agree to assume the Award or to substitute an equivalent award, in which case such Award shall terminate upon the consummation of the transaction.

For purposes of this Section 15(c), an Award shall be considered assumed, without limitation, if, at the time of issuance of the stock or other consideration upon a Corporate Transaction or a Change of Control, as the case may be, each holder of an Award would be entitled to receive upon exercise of the Award the same number and kind of shares of stock or the same amount of property, cash or securities as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior to such transaction, the holder of the number of Shares of Common Stock covered by the Award at such time (after giving effect to any adjustments in the number of Shares covered by the Award as provided for in this Section 15); provided that if such consideration received in the transaction is not solely common stock of the Successor Corporation, the Administrator may, with the consent of the Successor Corporation, provide for the consideration to be received upon exercise of the Award to be solely common stock of the Successor Corporation equal to the Fair Market Value of the per Share consideration received by holders of Common Stock in the transaction.

(d) Certain Distributions . In the event of any distribution to the Company’s stockholders of securities of any other entity or other assets (other than dividends payable in cash or stock of the Company) without receipt of consideration by the Company, the Administrator may, in its discretion, appropriately adjust the price per Share of Common Stock covered by each outstanding Option or Stock Purchase Right to reflect the effect of such distribution.

 

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16. Time of Granting Awards . The date of grant of an Award shall, for all purposes, be the date on which the Administrator makes the determination granting such Award, or such other date as is determined by the Administrator, provided that in the case of any Incentive Stock Option, the grant date shall be the later of the date on which the Administrator makes the determination granting such Incentive Stock Option or the date of commencement of the Optionee’s employment relationship with the Company. Notice of the determination shall be given to each Employee or Consultant to whom an Award is so granted within a reasonable time after the date of such grant.

17. Amendment and Termination of the Plan .

(a) Authority to Amend or Terminate . The Board or the Compensation Committee of the Board may at any time amend, alter, suspend or discontinue the Plan, but no amendment, alteration, suspension or discontinuation (other than an adjustment pursuant to Section 15 above) shall be made that would materially and adversely affect the rights of any holder of an Award, without his or her consent. In addition, to the extent necessary and desirable to comply with the Applicable Laws, the Company shall obtain stockholder approval of any Plan amendment in such a manner and to such a degree as required.

(b) Effect of Amendment or Termination . Except as to amendments which the Administrator has the authority under the Plan to make unilaterally, no amendment or termination of the Plan shall materially and adversely affect Awards already granted, unless mutually agreed otherwise between the holder of such Award and the Administrator, which agreement must be in writing and signed by such holder and the Company.

18. Conditions Upon Issuance of Shares . Notwithstanding any other provision of the Plan or any agreement entered into by the Company pursuant to the Plan, the Company shall not be obligated, and shall have no liability for failure, to issue or deliver any Shares under the Plan unless such issuance or delivery would comply with the Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel. As a condition to the exercise or settlement of an Award, the Company may require the holder of the Award to represent and warrant at the time of any such exercise that the Shares are being acquired only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by law. Shares issued upon exercise of Awards granted prior to the date on which the Common Stock becomes a Listed Security shall be subject to a right of first refusal in favor of the Company pursuant to which the Participant will be required to offer Shares to the Company before selling or transferring them to any third party on such terms and subject to such conditions as is reflected in the applicable agreement for such Award.

19. Reservation of Shares . The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

 

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20. Stockholder Approval . If required by the Applicable Laws, continuance of the Plan shall be subject to approval by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted. Such stockholder approval shall be obtained in the manner and to the degree required under the Applicable Laws.

 

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FACEBOOK, INC.

2005 STOCK PLAN

NOTICE OF STOCK OPTION GRANT

OPTIONEE NAME

 

You have been granted an option to purchase Common Stock of Facebook, Inc. (the “ Company ”) as follows:

Board Approval Date:

Date of Grant:

Exercise Price per Share:

Total Number of Shares Granted:

Type of Option:

Expiration Date:

Vesting Commencement Date:

Vesting/Exercise Schedule:

   So long as your employment or consulting relationship with the Company continues, the Shares underlying this Option shall vest and become exercisable in accordance with the following schedule: 25% of the Shares fully vest on the first anniversary of the Vesting Commencement Date. The remaining 75% of the Shares vest 1/48 th monthly, after such first anniversary.

Termination Period:

   This Option may be exercised for 90 days after termination of employment or consulting relationship except as set out in Section 5 of the Stock Option Agreement (but in no event later than the Expiration Date). Optionee is responsible for keeping track of these exercise periods following termination for any reason of his or her service relationship with the Company. The Company will not provide further notice of such periods.

Transferability:

   This Option may not be transferred.


By your signature and the signature of the Company’s representative below, you and the Company agree that this option is granted under and governed by the terms and conditions of the 2005 Stock Plan and the Stock Option Agreement, both of which are attached and made a part of this document.

In addition, you agree and acknowledge that your rights to any Shares underlying the Option will be earned only as you provide services to the Company over time, that the grant of the Option is not as consideration for services you rendered to the Company prior to your Vesting Commencement Date, and that nothing in this Notice or the attached documents confers upon you any right to continue your employment or consulting relationship with the Company for any period of time, nor does it interfere in any way with your right or the Company’s right to terminate that relationship at any time, for any reason, with or without cause.

Also, the Exercise Price Per Share has been set at the fair market value of the Shares on the Date of Grant in good faith compliance with the applicable guidance issued by the IRS under Section 409A of the Code in order to avoid the Option being treated as deferred compensation under Section 409A of the Code. However, there is no guarantee that the IRS will agree with the valuation and, by signing below, you agree and acknowledge that the Company shall not be held liable for any applicable costs, taxes, or penalties associated with the Option if, in fact, the IRS were to determine that the Option constitutes deferred compensation under Section 409A of the Code. You should consult with your own tax advisor concerning the tax consequences of such a determination by the IRS.

 

    FACEBOOK, INC.

 

    By:  

 

Optionee     Name:  

 

    Title:  

 

 

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FACEBOOK, INC.

2005 STOCK PLAN

STOCK OPTION AGREEMENT

1. Grant of Option . Facebook, Inc., a Delaware corporation (the “ Compan y”), hereby grants to                      (“ Optionee ”), an option (the “ Option ”) to purchase the total number of shares of Common Stock (the “ Shares ”) set forth in the Notice of Stock Option Grant (the “ Notice ”), at the exercise price per Share set forth in the Notice (the “ Exercise Price ”) subject to the terms, definitions and provisions of the 2005 Stock Plan (the “ Plan ”) adopted by the Company, which is incorporated in this Agreement by reference. Unless otherwise defined in this Agreement, the terms used in this Agreement shall have the meanings defined in the Plan.

2. Designation of Option . This Option is intended to be an Incentive Stock Option as defined in Section 422 of the Code only to the extent so designated in the Notice, and to the extent it is not so designated or to the extent the Option does not qualify as an Incentive Stock Option, it is intended to be a Nonstatutory Stock Option.

Notwithstanding the above, if designated as an Incentive Stock Option, in the event that the Shares subject to this Option (and all other Incentive Stock Options granted to Optionee by the Company or any Parent or Subsidiary, including under other plans of the Company) that first become exercisable in any calendar year have an aggregate fair market value (determined for each Share as of the date of grant of the option covering such Share) in excess of $100,000, the Shares in excess of $100,000 shall be treated as subject to a Nonstatutory Stock Option, in accordance with Section 5(c) of the Plan.

3. Exercise of Option . This Option shall be exercisable during its term in accordance with the Vesting/Exercise Schedule set out in the Notice and with the provisions of Section 10 of the Plan as follows:

(a) Right to Exercise .

(i) This Option may not be exercised for a fraction of a share.

(ii) In the event of Optionee’s death, disability or other termination of employment, the exercisability of the Option is governed by Section 5 below, subject to the limitations contained in this Section 3.

(iii) In no event may this Option be exercised after the Expiration Date of the Option as set forth in the Notice.

 

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(b) Method of Exercise .

(i) This Option shall be exercisable by execution and delivery of the Exercise Notice and Restricted Stock Purchase Agreement attached hereto as Exhibit A (the “ Exercise Agreement ”) or of any other form of written notice approved for such purpose by the Company which shall state Optionee’s election to exercise the Option, the number of Shares in respect of which the Option is being exercised, and such other representations and agreements as to the holder’s investment intent with respect to such Shares as may be required by the Company pursuant to the provisions of the Plan. Such written notice shall be signed by Optionee and shall be delivered to the Company by such means as are determined by the Plan Administrator in its discretion to constitute adequate delivery. The written notice shall be accompanied by payment of the Exercise Price. This Option shall be deemed to be exercised upon receipt by the Company of such written notice accompanied by the Exercise Price.

(ii) As a condition to the exercise of this Option and as further set forth in Section 12 of the Plan, Optionee agrees to make adequate provision for federal, state or other tax withholding obligations, if any, which arise upon the vesting or exercise of the Option, or disposition of Shares, whether by withholding, direct payment to the Company, or otherwise.

(iii) The Company is not obligated, and will have no liability for failure, to issue or deliver any Shares upon exercise of the Option unless such issuance or delivery would comply with the Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel. This Option may not be exercised until such time as the Plan has been approved by the stockholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or other law or regulation, including any rule under Part 221 of Title 12 of the Code of Federal Regulations as promulgated by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be required by the Applicable Laws. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Optionee on the date on which the Option is exercised with respect to such Shares.

4. Method of Payment . Payment of the Exercise Price shall be by any of the following, or a combination of the following, at the election of Optionee:

(a) cash or check;

(b) cancellation of indebtedness, with the prior written permission of the Company;

(c) prior to the date, if any, upon which the Common Stock becomes a Listed Security, by surrender of other shares of Common Stock of the Company that have an aggregate Fair Market Value on the date of surrender equal to the Exercise Price of the Shares as to which the Option is being exercised. In the case of shares acquired directly or indirectly from the Company, such shares must have been owned by Optionee for more than six (6) months on the date of surrender (or such other period of time as is necessary to avoid the Company’s incurring adverse accounting charges); or

 

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(d) following the date, if any, upon which the Common Stock is a Listed Security, and if the Company is at such time permitting “same day sale” cashless brokered exercises, delivery of a properly executed exercise notice together with irrevocable instructions to a broker participating in such cashless brokered exercise program to deliver promptly to the Company the amount required to pay the exercise price (and applicable withholding taxes).

5. Termination of Relationship . Following the date of termination of Optionee’s Continuous Service Status for any reason (the “ Termination Date ”), Optionee may exercise the Option only as set forth in the Notice and this Section 5. To the extent that Optionee is not entitled to exercise this Option as of the Termination Date, or if Optionee does not exercise this Option within the Termination Period set forth in the Notice or the termination periods set forth below, the Option shall terminate in its entirety. In no event, may any Option be exercised after the Expiration Date of the Option as set forth in the Notice.

(a) Termination . In the event of termination of Optionee’s Continuous Service Status other than as a result of Optionee’s disability or death or for Cause (as defined in the Plan), Optionee may, to the extent Optionee is vested in the Option Shares at the date of such termination (the “ Termination Date ”), exercise this Option during the Termination Period set forth in the Notice.

(b) Other Terminations . In connection with any termination other than a termination covered by Section 5(a), Optionee may exercise the Option only as described below:

(i) Termination upon Disability of Optionee . In the event of termination of Optionee’s Continuous Service Status as a result of Optionee’s disability, Optionee may, but only within six months from the Termination Date, exercise this Option to the extent Optionee was vested in the Option Shares as of such Termination Date.

(ii) Death of Optionee . In the event of the death of Optionee (a) during the term of this Option and while an Employee or Consultant of the Company and having been in Continuous Service Status since the date of grant of the Option, or (b) within thirty (30) days after Optionee’s Termination Date, the Option may be exercised at any time within six months following the date of death by Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent Optionee was vested in the Option as of the Termination Date.

(iii) Termination for Cause . In the event Optionee’s Continuous Service Status is terminated for Cause, the Option shall terminate immediately upon such termination for Cause as set forth in Section 10(b)(iv) of the Plan. In the event Optionee’s employment or consulting relationship with the Company is suspended pending investigation of whether such relationship shall be terminated for Cause, all Optionee’s rights under the Option, including the right to exercise the Option, shall be suspended during the investigation period, also as set forth in Section 10(b)(iv) of the Plan.

 

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6. Non-Transferability of Option . This Option may not be transferred in any manner otherwise than by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by him or her. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of Optionee.

7. Tax Consequences . Below is a brief summary as of the date of this Option of certain of the federal tax consequences of exercise of this Option and disposition of the Shares under the laws in effect as of the Date of Grant. THIS SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

(a) Incentive Stock Option .

(i) Tax Treatment upon Exercise and Sale of Shares . If this Option qualifies as an Incentive Stock Option, there will be no regular federal income tax liability upon the exercise of the Option, although the excess, if any, of the fair market value of the Shares on the date of exercise over the Exercise Price will be treated as an adjustment to the alternative minimum tax for federal tax purposes and may subject Optionee to the alternative minimum tax in the year of exercise. If Shares issued upon exercise of an Incentive Stock Option are held for at least one year after exercise and are disposed of at least two years after the Option grant date, any gain realized on disposition of the Shares will also be treated as long-term capital gain for federal income tax purposes. If Shares issued upon exercise of an Incentive Stock Option are disposed of within such one-year period or within two years after the Option grant date, any gain realized on such disposition will be treated as compensation income (taxable at ordinary income rates) to the extent of the difference between the Exercise Price and the lesser of (i) the fair market value of the Shares on the date of exercise, or (ii) the sale price of the Shares.

(ii) Notice of Disqualifying Dispositions . With respect to any Shares issued upon exercise of an Incentive Stock Option, if Optionee sells or otherwise disposes of such Shares on or before the later of (i) the date two years after the Option grant date, or (ii) the date one year after the date of exercise, Optionee shall immediately notify the Company in writing of such disposition. Optionee acknowledges and agrees that he or she may be subject to income tax withholding by the Company on the compensation income recognized by Optionee from the early disposition by payment in cash or out of the current earnings paid to Optionee.

(b) Nonstatutory Stock Option . If this Option does not qualify as an Incentive Stock Option, there may be a regular federal (and state) income tax liability upon the exercise of the Option. Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the fair market value of the Shares on the date of exercise over the Exercise Price. If Optionee is an Employee, the Company will be required to withhold from Optionee’s compensation or collect from Optionee and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. If Shares issued upon exercise of a Nonstatutory Stock Option are held for at least one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes.

 

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8. Lock-Up Agreement . In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing any underwritten offering of the Company’s securities, Optionee hereby agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company however and whenever acquired (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the public offering.

9. Effect of Agreement . Optionee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof (and has had an opportunity to consult counsel regarding the Option terms), and hereby accepts this Option and agrees to be bound by its contractual terms as set forth herein and in the Plan. Optionee hereby agrees to accept as binding, conclusive and final all decisions and interpretations of the Plan Administrator regarding any questions relating to the Option. In the event of a conflict between the terms and provisions of the Plan and the terms and provisions of the Notice and this Agreement, the Plan terms and provisions shall prevail. The Option, including the Plan, constitutes the entire agreement between Optionee and the Company on the subject matter hereof and supersedes all proposals, written or oral, and all other communications between the parties relating to such subject matter.

10. Information to Optionee . If the Company is relying on an exemption from registration under Section 12(h)-1 of the Exchange Act and such information is required to be provided by such Section 12(h)-1, the Company shall provide the information described in Rules 701(e)(3), (4), and (5) of the Securities Act by a method allowed under Section 12(h)-1 of the Exchange Act in accordance with Section 12(h)-1 of the Exchange Act, provided that Optionee agrees to keep the information confidential.

[Signature Page Follows]

 

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This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one document.

 

      FACEBOOK, INC.

 

    By:  

 

      Name:  

 

Dated:  

 

    Title:  

 

 

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EXHIBIT A

FACEBOOK, INC.

2005 STOCK PLAN

EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

This Agreement (“ Agreement ”) is made as of                      , by and between Facebook, Inc., a Delaware corporation (the “ Company ”), and                      (“ Purchaser ”). To the extent any capitalized terms used in this Agreement are not defined, they shall have the meaning ascribed to them in the Company’s 2005 Stock Plan (the “ Plan ”).

1. Exercise of Option . Subject to the terms and conditions hereof, Purchaser hereby elects to exercise his or her option to purchase              shares of the Common Stock (the “ Shares ”) of the Company under and pursuant to the Plan and the Stock Option Agreement dated              for grant number              (the “ Option Agreement ”). The purchase price for the Shares shall be $              per Share for a total purchase price of $              . The term “ Shares ” refers to the purchased Shares and all securities received in replacement of the Shares or as stock dividends or splits, all securities received in replacement of the Shares in a recapitalization, merger, reorganization, exchange or the like, and all new, substituted or additional securities or other properties to which Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

2. Time and Place of Exercise . The purchase and sale of the Shares under this Agreement shall occur at the principal office of the Company simultaneously with the execution and delivery of this Agreement in accordance with the provisions of Section 3(b) of the Option Agreement. On such date, the Company will issue a duly executed stock certificate evidencing the Shares in the name of Purchaser, to be placed in escrow as provided in Section 9 hereof against payment of the exercise price therefor by Purchaser by any method listed in Section 4 of the Option Agreement and until expiration or termination of the Company’s Right of First Refusal and Right to Purchase upon Involuntary Transfer as described in Section 3.

3. Limitations on Transfer . In addition to any other limitation on transfer created by applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in the Shares, except in compliance with the provisions below and applicable securities laws.

(a) Right of First Refusal . Before any Shares held by Purchaser or any transferee of Purchaser (either being sometimes referred to herein as the “ Holder ”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section 3(a) (the “ Right of First Refusal ”).

(i) Notice of Proposed Transfer . The Holder of the Shares shall deliver to the Company a written notice (the “ Notice ”) stating: (i) the Holder’s bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee (“ Proposed Transferee ”); (iii) the number of Shares to be transferred to each


Proposed Transferee; (iv) the terms and conditions of each proposed sale or transfer; and (v) written assurances, in form and substance satisfactory to counsel for the Company (which may include a requirement that Holder’s counsel provide a legal opinion), that (A) the proposed sale or transfer does not require registration of the Shares under the Securities Act of 1933, as amended (the “ Securities Act ”) or (B) all appropriate actions necessary for compliance with the registration requirements of the Securities Act or of any exemption from registration available under the Securities Act have been taken. The Holder shall offer the Shares at the same price (the “ Offered Price ”) and upon the same terms (or terms as similar as reasonably possible) to the Company or its assignee(s).

(ii) Exercise of Right of First Refusal . At any time within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (iii) below.

(iii) Purchase Price . The purchase price (“ Purchase Price ”) for the Shares purchased by the Company or its assignee(s) under this Section 3(a) shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith.

(iv) Payment . Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness, or by any combination thereof within 30 days after receipt of the Notice or in the manner and at the times set forth in the Notice.

(v) Holder’s Right to Transfer . If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section 3(a), then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within 60 days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the provisions of this Section 3 shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, or if the Holder proposes to change the price or other terms to make them more favorable to the Proposed Transferee, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.

(vi) Exception for Certain Family Transfers . Anything to the contrary contained in this Section 3(a) notwithstanding, the transfer of any or all of the Shares during Purchaser’s lifetime or on Purchaser’s death by will or intestacy to Purchaser’s Immediate Family or a trust for the benefit of Purchaser’s Immediate Family shall be exempt from the provisions of this Section 3(a). “ Immediate Family ” as used herein shall mean spouse,


lineal descendant or antecedent, father, mother, brother or sister. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section, and there shall be no further transfer of such Shares except in accordance with the terms of this Section 3.

(b) Involuntary Transfer .

(i) Company’s Right to Purchase upon Involuntary Transfer . In the event, at any time after the date of this Agreement, of any transfer by operation of law or other involuntary transfer (including death or divorce, but excluding a transfer to Immediate Family as set forth in Section 3(a)(vi) above) of all or a portion of the Shares by the record holder thereof, the Company shall have an option to purchase all of the Shares transferred at the greater of the purchase price paid by Purchaser pursuant to this Agreement or the Fair Market Value of the Shares on the date of transfer. Upon such a transfer, the person acquiring the Shares shall promptly notify the Secretary of the Company of such transfer. The right to purchase such Shares shall be provided to the Company for a period of thirty (30) days following receipt by the Company of written notice by the person acquiring the Shares.

(ii) Price for Involuntary Transfer . With respect to any stock to be transferred pursuant to Section 3(b)(i), the price per Share shall be a price set by the Board of Directors of the Company that will reflect the current value of the stock in terms of present earnings and future prospects of the Company. The Company shall notify Purchaser or his or her executor of the price so determined within thirty (30) days after receipt by it of written notice of the transfer or proposed transfer of Shares.

(c) Assignment . The right of the Company to purchase any part of the Shares may be assigned in whole or in part to any stockholder or stockholders of the Company or other persons or organizations.

(e) Restrictions Binding on Transferees . All transferees of Shares or any interest therein will receive and hold such Shares or interest subject to the provisions of this Agreement. Any sale or transfer of the Company’s Shares shall be void unless the provisions of this Agreement are satisfied.

(f) Termination of Rights . The right of first refusal granted the Company by Section 3(a) above and the option to repurchase the Shares in the event of an involuntary transfer granted the Company by Section 3(b) above shall terminate upon the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act. Upon termination of the right of first refusal described in Section 3(a) above, a new certificate or certificates representing the Shares not repurchased shall be issued, on request, without the legend referred to in Section 5(a)(ii) herein and delivered to Purchaser.


4. Investment and Taxation Representations . In connection with the purchase of the Shares, Purchaser represents to the Company the following:

(a) Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares. Purchaser is purchasing these securities for investment for his or her own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act or under any applicable provision of state law. Purchaser does not have any present intention to transfer the Shares to any person or entity.

(b) Purchaser understands that the Shares have not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser’s investment intent as expressed herein.

(c) Purchaser further acknowledges and understands that the securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser further acknowledges and understands that the Company is under no obligation to register the securities. Purchaser understands that the certificate(s) evidencing the securities will be imprinted with a legend which prohibits the transfer of the securities unless they are registered or such registration is not required in the opinion of counsel for the Company.

(d) Purchaser is familiar with the provisions of Rules 144 and 701, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer of the securities (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions. Purchaser understands that the Company provides no assurances as to whether he or she will be able to resell any or all of the Shares pursuant to Rule 144 or Rule 701. Notwithstanding this paragraph (d), Purchaser acknowledges and agrees to the restrictions set forth in paragraph (e) below.

(e) Purchaser further understands that in the event all of the applicable requirements of Rule 144 or 701 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 or 701 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.

(f) Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.


5. Restrictive Legends and Stop-Transfer Orders .

(a) Legends . The certificate or certificates representing the Shares shall bear the following legends (as well as any legends required by applicable state and federal corporate and securities laws):

 

  (i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

  (ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

(b) Stop-Transfer Notices . Purchaser agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

(c) Refusal to Transfer . The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

6. No Employment Rights . Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a parent or subsidiary of the Company, to terminate Purchaser’s employment or consulting relationship, for any reason, with or without cause.

7. Lock-Up Agreement . In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing any underwritten offering of the Company’s securities, Purchaser agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company however or whenever acquired (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such


period of time (not to exceed 180 days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the public offering.

8. Miscellaneous .

(a) Governing Law . This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.

(b) Entire Agreement; Enforcement of Rights . This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

(c) Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(d) Construction . This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

(e) Notices . Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by telegram or fax or forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written notice.

(f) Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(g) Successors and Assigns . The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Purchaser under this Agreement may only be assigned with the prior written consent of the Company.


(h) California Corporate Securities Law . THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

9. Escrow. As security for Purchaser’s faithful performance of this Agreement, Purchaser agrees, immediately upon receipt of the stock certificate(s) representing the Shares, to deliver such certificate(s) to counsel for the Company or other designee of the Company (the “ c ”), who is hereby appointed to hold such certificate(s) in escrow and to take all such actions and to effectuate all such transfers and/or releases of such Shares as are in accordance with the terms of this Agreement. Purchaser and Company agree that Escrow Holder will not be liable to any party to this Agreement (or to any other party) for any actions or omissions unless Escrow Holder is grossly negligent or intentionally fraudulent in carrying out the duties of Escrow Holder under this Agreement. Escrow Holder may rely on any letter, notice, or other document executed with any signature purported to be genuine and may rely on the advice of counsel and obey any order of any court with respect to the transactions contemplated by this Agreement. At Purchaser’s request, the stock certificate(s) representing the Shares will be released from Escrow upon termination of the Company’s Right of First Refusal and Right to Purchase upon Involuntary Transfer as described in Section 3(f) of this Agreement.

[Signature Page Follows]


The parties have executed this Exercise Notice and Restricted Stock Purchase Agreement as of the date first set forth above.

 

COMPANY:
FACEBOOK, INC.
By:  

 

Name:  

 

Title:  

 

PURCHASER:

 

(Signature)
Address:  

 

 

 

I,                                          , spouse of                                          , have read and hereby approve the foregoing Agreement. In consideration of the Company’s granting my spouse the right to purchase the Shares as set forth in the Agreement, I hereby agree to be irrevocably bound by the Agreement and further agree that any community property or other such interest shall hereby by similarly bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement.

 

 

(Spouse’s Signature)
Check here if Purchaser has no spouse: ¨


FACEBOOK, INC.

COMMON STOCK PURCHASE AGREEMENT

This Common Stock Purchase Agreement (the “ Agreement ”) is made as of ___________, 20___ by and between Facebook, Inc., a Delaware corporation (the “ Company ”), and __________ (“ Purchaser ”).

1. Sale of Stock . Subject to the terms and conditions of this Agreement, on the Purchase Date (as defined below) the Company will issue and sell to Purchaser, and Purchaser agrees to purchase from the Company, __________ (____) shares of the Company’s Class ____ Common Stock (the “ Shares ”) at a purchase price of $______ per Share for a total purchase price of $______. The term “Shares” refers to the purchased Shares and all securities received in connection with the Shares pursuant to stock dividends or splits, all securities received in replacement of the Shares in a recapitalization, merger, reorganization, exchange or the like, and all new, substituted or additional securities or other properties to which Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

2. Purchase . The purchase and sale of the Shares under this Agreement shall occur at the principal office of the Company simultaneously with the execution and delivery of this Agreement by the parties or on such other date as the Company and Purchaser shall agree (the “ Purchase Date ”). On the Purchase Date, the Company will deliver to Purchaser a certificate representing the Shares to be purchased by Purchaser (which shall be issued in Purchaser’s name) against payment of the purchase price therefor by Purchaser by check made payable to the Company.

3. Limitations on Transfer . Purchaser shall not assign, encumber or dispose of any interest in such Shares except in compliance with the provisions below and applicable securities laws.

(a) Right of First Refusal . Before any Shares held by Purchaser or any transferee of Purchaser (either being sometimes referred to herein as the “ Holder ”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section 3(a) (the “ Right of First Refusal ”).

(i) Notice of Proposed Transfer . The Holder of the Shares shall deliver to the Company a written notice (the “ Notice ”) stating: (A) the Holder’s bona fide intention to sell or otherwise transfer such Shares; (B) the name of each proposed purchaser or other transferee (“ Proposed Transferee ”); (C) the number of Shares to be transferred to each Proposed Transferee; and (D) the terms and conditions of each proposed sale or transfer. The Holder shall offer the Shares at the same price (the “ Purchase Price ”) and upon the same terms (or terms as similar as reasonably possible) to the Company or its assignee(s).

(ii) Exercise of Right of First Refusal . At any time within 30 days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to


the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the Purchase Price. If the terms of the proposed transfer in the Notice include consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board in good faith.

(iii) Payment . Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness, or by any combination thereof within 30 days after receipt of the Notice or in the manner and at the times set forth in the Notice.

(iv) Holder’s Right to Transfer . If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section 3(a), then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Purchase Price or at a higher price, provided that such sale or other transfer is consummated within 60 days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the provisions of this Section 3 shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, or if the Holder proposes to change the price or other terms to make them more favorable to the Proposed Transferee, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.

(v) Exception for Certain Family Transfers . Anything to the contrary contained in this Section 3(a) notwithstanding, the transfer of any or all of the Shares during Purchaser’s lifetime or on Purchaser’s death by will or intestacy to Purchaser’s Immediate Family or a trust for the benefit of Purchaser or Purchaser’s Immediate Family shall be exempt from the provisions of this Section 3(a). “ Immediate Family ” as used herein shall mean any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, uncle, aunt, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships, or any person sharing the Purchaser’s household (other than a tenant or an employee). In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section, and there shall be no further transfer of such Shares except in accordance with the terms of this Section 3.

(b) Company’s Right to Purchase upon Involuntary Transfer . In the event of any transfer by operation of law or other involuntary transfer (including divorce or death, but excluding in the event of death a transfer to Immediate Family as set forth in Section 3(a)(v) above) of all or a portion of the Shares by the record holder thereof, the Company shall have an option to purchase all of the Shares transferred at the greater of the purchase price paid by Purchaser pursuant to this Agreement or the fair market value of the Shares on the date of transfer. Upon such a transfer, the person acquiring the Shares shall promptly notify the Secretary of the Company of such transfer. The right to purchase such Shares shall be provided to the Company for a period of 30 days following receipt by the Company of written notice by the person acquiring the Shares.

 

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(c) Assignment . The right of the Company to purchase any part of the Shares may be assigned in whole or in part to any holder or holders of capital stock of the Company or other persons or organizations.

(d) Restrictions Binding on Transferees. All transferees of Shares or any interest therein will receive and hold such Shares or interest subject to the provisions of this Agreement. Any sale or transfer of the Shares shall be void unless the provisions of this Agreement are satisfied.

(e) Termination of Rights . The Right of First Refusal and the Company’s right to repurchase the Shares in the event of an involuntary transfer pursuant to Section 3(b) above shall terminate upon the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “ Securities Act ”).

(f) Lock-up Agreement . In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing such offering of the Company’s securities, Purchaser agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the Company’s initial public offering.

(g) Bylaws Restrictions . Purchaser agrees to be bound by and comply with the limitations on transfer contained in the Bylaws of the Company (the “ Bylaws ”), including but not limited to, Section 8.14 of the Bylaws. Purchaser acknowledges and agrees that it shall not transfer, assign, pledge or otherwise dispose of or encumber Shares without the prior written consent of the Company (the “ Restriction ”); provided, however, that the Restriction shall not apply to the transactions listed in Section 8.14(b) of the Bylaws.

4. Escrow of Shares . For purposes of facilitating the enforcement of the provisions of Section 3 above, Purchaser agrees, immediately upon receipt of the certificate for the Shares, to deliver such certificate, together with an Assignment Separate from Certificate in the form attached to this Agreement as Exhibit A executed by Purchaser and by Purchaser’s spouse (if required for transfer), in blank, to the Secretary of the Company, or the Secretary’s designee, to hold such certificate and Assignment Separate from Certificate in escrow and to take all such actions and to effectuate all such transfers and/or releases as are in accordance with the terms of this Agreement. Purchaser hereby acknowledges that the Secretary of the Company, or the Secretary’s designee, is so appointed as the escrow holder with the foregoing authorities as a material inducement to make this Agreement and that said appointment is coupled with an interest and is accordingly irrevocable. Purchaser agrees that said escrow holder shall not be liable to any party hereof (or to any other party). The escrow holder may rely upon any letter,

 

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notice or other document executed by any signature purported to be genuine and may resign at any time. Purchaser agrees that if the Secretary of the Company, or the Secretary’s designee, resigns as escrow holder for any or no reason, the Board of Directors of the Company shall have the power to appoint a successor to serve as escrow holder pursuant to the terms of this Agreement.

5. Investment and Taxation Representations . In connection with the purchase of the Shares, Purchaser represents to the Company the following:

(a) Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares. Purchaser is purchasing the Shares for investment for his or her own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act or under any applicable provision of state law. Purchaser does not have any present intention to transfer the Shares to any other person or entity.

(b) Purchaser understands that the Shares have not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser’s investment intent as expressed herein.

(c) Purchaser understands that the Shares are “restricted securities” under applicable U.S. federal and state securities laws and that, pursuant to these laws, Purchaser must hold the Shares indefinitely unless they are registered with the Securities and Exchange Commission and qualified by state authorities, or an exemption from such registration and qualification requirements is available. Purchaser acknowledges that the Company has no obligation to register or qualify the Shares for resale. Purchaser further acknowledges that if an exemption from registration or qualification is available, it may be conditioned on various requirements including, but not limited to, the time and manner of sale, the holding period for the Shares, and requirements relating to the Company which are outside of the Purchaser’s control, and which the Company is under no obligation and may not be able to satisfy.

(d) Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

6. Restrictive Legends and Stop-Transfer Orders .

(a) Legends . The certificate or certificates representing the Shares shall bear the following legends (as well as any legends required by applicable state and federal corporate and securities laws):

 

  (i)

THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER STATES SECURITIES

 

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  LAWS AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

  (ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE HOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

  (iii) THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A 180-DAY MARKET STANDOFF RESTRICTION AS SET FORTH IN A CERTAIN AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. AS A RESULT OF SUCH AGREEMENT, THESE SHARES MAY NOT BE TRADED PRIOR TO 180 DAYS AFTER THE EFFECTIVE DATE OF THE INITIAL PUBLIC OFFERING OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON TRANSFEREES OF THESE SHARES.

 

  (iv) THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS ON TRANSFER CONTAINED IN THE BYLAWS OF THE COMPANY.

 

  (v) Any legend required to be placed thereon by the California Commissioner of Corporations.

(b) Stop-Transfer Notices . Purchaser agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

(c) Refusal to Transfer . The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

 

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(d) Removal of Legend . When all of the following events have occurred, the Shares then held by Purchaser will no longer be subject to the legend referred to in Section 6(a)(ii)-(iii): (1) the termination of the Right of First Refusal, and (2) the expiration or termination of the market standoff provisions of Section 3(f) (and of any agreement entered pursuant to Section 3(f)). After such time, and upon Purchaser’s request, a new certificate or certificates representing the Shares not repurchased shall be issued without the legends referred to in Sections 6(a)(ii) and 6(a)(iii), and delivered to Purchaser.

7. No Employment Rights . Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a parent or subsidiary of the Company, to terminate Purchaser’s employment or consulting relationship, for any reason, with or without cause.

8. TITLE TO SHARES . The exact spelling of the name(s) under which Purchaser will take title to the Shares is: “__________”.

9. Miscellaneous.

(a) Governing Law . This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.

(b) Entire Agreement; Enforcement of Rights . This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

(c) Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(d) Construction . This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

(e) Notices . Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by fax or 48 hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address or fax number as set forth below or as subsequently modified by written notice.

 

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(f) Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(g) Successors and Assigns . The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Purchaser under this Agreement may only be assigned with the prior written consent of the Company.

(h) California Corporate Securities Law . THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

[Signature Page Follows]

 

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The parties have executed this Agreement as of the date first set forth above.

 

THE COMPANY:
FACEBOOK, INC.
By:  

 

  (Signature)
Name:  

 

Title:  

 

Address:
PURCHASER:

 

Address:  

 

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I, ________________, spouse of Purchaser, have read and hereby approve the foregoing Agreement. In consideration of the Company’s granting my spouse the right to purchase the Shares as set forth in the Agreement, I hereby agree to be irrevocably bound by the Agreement and further agree that any community property or similar interest that I may have in the Shares shall be similarly bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement.

 

 

Spouse of Purchaser

 

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EXHIBIT A

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED and pursuant to that certain Common Stock Purchase Agreement between the undersigned (“ Purchaser ”) and Facebook, Inc., a Delaware corporation (the “ Company ”), dated                   , 20      (the “ Agreement ”), Purchaser hereby sells, assigns and transfers unto the Company              (              ) shares of the Common Stock of the Company standing in Purchaser’s name on the Company’s books and represented by Certificate No.              , and does hereby irrevocably constitute and appoint              to transfer said stock on the books of the Company with full power of substitution in the premises. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE EXHIBITS THERETO.

Dated:                                     

 

PURCHASER

 

 

Spouse of Purchaser (if applicable)

Instruction: Please do not fill in any blanks other than the signature line. The purpose of this assignment is to enable the Company to exercise its rights to restrict transfer as set forth in the Agreement without requiring additional signatures on the part of Purchaser.


FACEBOOK, INC.

2005 STOCK PLAN

NOTICE OF RESTRICTED STOCK UNIT AWARD

GRANT NUMBER:

Terms defined in the Company’s 2005 Stock Plan (the “ Plan ”) shall have the same meanings in this Notice of Restricted Stock Unit Award (“ Notice of Grant ”).

Name:

Address:

You (“ Participant ”) have been granted an award of Restricted Stock Units (“ RSUs ”), subject to the terms and conditions of the Plan and the attached Restricted Stock Unit Agreement (hereinafter “ RSU Agreement ”) under the Plan, as follows:

Total Number of RSUs:

RSU Start Date:

Date of Grant:

 

Expiration Date:

  The earlier to occur of: (a) the date on which delivery of all Shares with respect to RSUs granted hereunder occurs and (b) the tenth anniversary of the Date of Grant.

Vesting: If application of a vesting percentage would cause vesting of a fractional share, then such vesting shall be rounded down to the nearest whole share and shall cumulate with any other fractional shares and such fractions shall vest as they aggregate into a whole Share.

 

  (a) No RSUs will vest until the earliest to occur of: (i) December 31, 2013, (ii) an earlier date between January 1, 2013 and December 31, 2013 that is specified by the Company; and (iii) the date of a Change of Control (any of the foregoing (i), (ii) and (iii) being an “ Initial Vesting Event ”).

The number of RSUs that vest on an Initial Vesting Event shall be calculated as follows: (i) If Participant has been in Continuous Service Status for at least one year from the RSU Start Date (such one-year anniversary of the RSU Start Date, the “ Cliff Date ”), whether or not Participant is in Continuous Service Status on the Initial Vesting Event, the number of RSUs that shall vest on the Initial Vesting Event shall be equal to the product obtained by multiplying the “Total Number of RSUs” identified above by the sum of (x) twelve forty-eighths (12/48) plus (y) a fraction, the numerator of which is the number of Quarterly Vesting Dates on which the Participant was in Continuous Service Status after the Cliff Date and the denominator of which is sixteen (16); and (ii) if Participant has not been in Continuous Service Status for at least one year from the RSU Start Date, then the number of vested RSUs at the Initial Vesting Event shall be zero.


(b) If Participant is in Continuous Service Status on the date of the Initial Vesting Event, then with respect to RSUs that have not vested as of such Initial Vesting Event, vesting shall be determined as follows (each vesting date under either of the following (i) or (ii) being a “ Subsequent Vesting Event ”): (i) If Participant has not been in Continuous Service Status for at least one year from the RSU Start Date at the time of the Initial Vesting Event, then on the Cliff Date, twelve forty-eighths (12/48) of the RSUs will vest provided that Participant has been in Continuous Service Status on such Cliff Date, and thereafter on each subsequent Quarterly Vesting Date; 1/16th of the RSUs will vest provided that Participant has been in Continuous Service Status on each such subsequent Quarterly Vesting Date; and (ii) If Participant has been in Continuous Service Status for at least one year from the RSU Start Date at the time of the Initial Vesting Event, vesting of any unvested RSUs shall continue on each subsequent Quarterly Vesting Date at a rate of 1/16th of the RSUs provided that Participant has been in Continuous Service Status on each such subsequent Quarterly Vesting Date. Participant agrees and acknowledges that this vesting schedule may change prospectively in the event that Participant’s service status changes between full and part time status in accordance with Company policies relating to work schedules and vesting of awards.

(c) There will be four dates in each calendar year that will be “ Quarterly Vesting Dates ” pursuant to this Notice of Grant: January 15 th , April 15 th , July 15 th , and October 15 th .

Settlement: RSUs that vest as of the Initial Vesting Event or any Subsequent Vesting Event shall be settled as soon as practicable (i) on a date between January 1, 2013 and December 31, 2013, or if earlier, in the year in which a Change of Control occurs (provided the Change of Control is also a “change of control event” for purposes of Section 409A of the Code) for RSUs that vest pursuant to an Initial Vesting Event and (ii) in no event later than the last day of the calendar year in which RSUs vest pursuant to a Subsequent Vesting Event. Settlement means the delivery of the Shares vested under an RSU. Settlement of RSUs on the Initial Vesting Event or any Subsequent Vesting Event shall be in Shares unless at the time of settlement the Administrator, in its sole discretion, determines that settlement shall, in whole or in part, be in the form of cash. Settlement of vested RSUs shall occur whether or not Participant is in Continuous Service Status at the time of settlement. Upon delivery of the Shares, the Company will satisfy its tax withholding obligations and may withhold a number of shares with a fair market value equal to the amount the Company is then required to withhold for taxes.

By accepting (whether in writing, electronically or otherwise) the RSUs, Participant acknowledges and agrees to the following:

Participant understands that, to the extent permitted under applicable law, his or her employment or consulting relationship with the Company is for an unspecified duration, can be terminated at any time ( i.e. , is “at-will”), and that nothing in this Notice of Grant, the RSU Agreement or the Plan changes the at-will nature of that relationship. Participant also understands that this Notice of Grant supersedes any prior agreement with respect to the RSUs in any offer letter to the extent permitted under the Code (and compliant with Section 409A of the Code) and is subject to the terms and conditions of both the RSU Agreement and the Plan, both of which are incorporated herein by reference. Participant has read both the RSU Agreement and the Plan.

 

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FACEBOOK, INC.

2005 STOCK PLAN

NOTICE OF RESTRICTED STOCK UNIT AWARD

GRANT NUMBER:

Terms defined in the Company’s 2005 Stock Plan (the “ Plan ”) shall have the same meanings in this Notice of Restricted Stock Unit Award (“ Notice of Grant ”).

Name:

Address:

You (“ Participant ”) have been granted an award of Restricted Stock Units (“ RSUs ”), subject to the terms and conditions of the Plan and the attached Restricted Stock Unit Agreement (hereinafter “ RSU Agreement ”) under the Plan, as follows:

Total Number of RSUs:

RSU Start Date:

Date of Grant:

 

Expiration Date:

  The earlier to occur of: (a) the date on which delivery of all Shares with respect to RSUs granted hereunder occurs and (b) the tenth anniversary of the Date of Grant.

Vesting: If application of a vesting percentage would cause vesting of a fractional share, then such vesting shall be rounded down to the nearest whole share and shall cumulate with any other fractional shares and such fractions shall vest as they aggregate into a whole Share.

 

  (a) No RSUs will vest until the earliest to occur of: (i) December 31, 2013, (ii) an earlier date between January 1, 2013 and December 31, 2013 that is specified by the Company; and (iii) the date of a Change of Control (any of the foregoing (i), (ii) and (iii) being an “ Initial Vesting Event ”).

The number of RSUs that vest on an Initial Vesting Event shall be calculated as follows: (i) If Participant has been in Continuous Service Status for at least one year from the RSU Start Date (such one-year anniversary of the RSU Start Date, the “ Cliff Date ”), whether or not Participant is in Continuous Service Status on the Initial Vesting Event, the number of RSUs that shall vest on the Initial Vesting Event shall be equal to the product obtained by multiplying the “Total Number of RSUs” identified above by the sum of (x) thirteen forty-eighths (13/48) plus (y) a fraction, the numerator of which is the number of Quarterly Vesting Dates on which the Participant was in Continuous Service Status after the Cliff Date (not to exceed eleven [11] such Quarterly Vesting Dates) and the denominator of which is sixteen (16), plus (z) two-forty-eighths (2/48) provided that Participant was in Continuous Service Status on the four-year anniversary of the RSU Start Date; and (ii) if Participant has not been in Continuous Service Status for at least one year from the RSU Start Date, then the number of vested RSUs at the Initial Vesting Event shall be zero.


(b) If Participant is in Continuous Service Status on the date of the Initial Vesting Event, then with respect to RSUs that have not vested as of such Initial Vesting Event, vesting shall be determined as follows (each vesting date under either of the following (i) or (ii) being a “ Subsequent Vesting Event ”): (i) If Participant has not been in Continuous Service Status for at least one year from the RSU Start Date at the time of the Initial Vesting Event, then on the Cliff Date, thirteen forty-eighths (13/48) of the RSUs will vest provided that Participant has been in Continuous Service Status on such Cliff Date, and thereafter on each subsequent Quarterly Vesting Date (not to exceed eleven [11] such Quarterly Vesting Dates); 1/16th of the RSUs will vest provided that Participant has been in Continuous Service Status on each such subsequent Quarterly Vesting Date, and finally on the four-year anniversary of the RSU Start Date two-forty-eighths (2/48) of the RSUs will vest provided that Participant is in Continuous Service Status on such date; and (ii) If Participant has been in Continuous Service Status for at least one year from the RSU Start Date at the time of the Initial Vesting Event, vesting of any unvested RSUs shall continue on each subsequent Quarterly Vesting Date (not to exceed an aggregate of eleven [11] Quarterly Vesting Dates following the Cliff Date) at a rate of 1/16th of the RSUs provided that Participant has been in Continuous Service Status on each such subsequent Quarterly Vesting Date, and finally on the four-year anniversary of the RSU Start Date two-forty-eighths (2/48) of the RSUs will vest provided that Participant is in Continuous Service Status on such date. Participant agrees and acknowledges that this vesting schedule may change prospectively in the event that Participant’s service status changes between full and part time status in accordance with Company policies relating to work schedules and vesting of awards.

(c) There will be four dates in each calendar year that will be “ Quarterly Vesting Dates ” pursuant to this Notice of Grant: January 15 th , April 15 th , July 15 th , and October 15 th .

Settlement: RSUs that vest as of the Initial Vesting Event or any Subsequent Vesting Event shall be settled as soon as practicable (i) on a date between January 1, 2013 and December 31, 2013, or if earlier, in the year in which a Change of Control occurs (provided the Change of Control is also a “change of control event” for purposes of Section 409A of the Code) for RSUs that vest pursuant to an Initial Vesting Event and (ii) in no event later than the last day of the calendar year in which RSUs vest pursuant to a Subsequent Vesting Event. Settlement means the delivery of the Shares vested under an RSU. Settlement of RSUs on the Initial Vesting Event or any Subsequent Vesting Event shall be in Shares unless at the time of settlement the Administrator, in its sole discretion, determines that settlement shall, in whole or in part, be in the form of cash. Settlement of vested RSUs shall occur whether or not Participant is in Continuous Service Status at the time of settlement. Upon delivery of the Shares, the Company will satisfy its tax withholding obligations and may withhold a number of shares with a fair market value equal to the amount the Company is then required to withhold for taxes.

By accepting (whether in writing, electronically or otherwise) the RSUs, Participant acknowledges and agrees to the following:

Participant understands that, to the extent permitted under applicable law, his or her employment or consulting relationship with the Company is for an unspecified duration, can be terminated at any time ( i.e. , is “at-will”), and that nothing in this Notice of Grant, the RSU Agreement or the Plan changes the at-will

 

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nature of that relationship. Participant also understands that this Notice of Grant supersedes any prior agreement with respect to the RSUs in any offer letter to the extent permitted under the Code (and compliant with Section 409A of the Code) and is subject to the terms and conditions of both the RSU Agreement and the Plan, both of which are incorporated herein by reference. Participant has read both the RSU Agreement and the Plan.

 

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FACEBOOK, INC.

2005 STOCK PLAN

NOTICE OF RESTRICTED STOCK UNIT AWARD

GRANT NUMBER:

Terms defined in the Company’s 2005 Stock Plan (the “ Plan ”) shall have the same meanings in this Notice of Restricted Stock Unit Award (“ Notice of Grant ”).

Name:

Address:

You (“ Participant ”) have been granted an award of Restricted Stock Units (“ RSUs ”), subject to the terms and conditions of the Plan and the attached Restricted Stock Unit Agreement (hereinafter “ RSU Agreement ”) under the Plan, as follows:

 

Total Number of RSUs:
RSU Start Date:
Date of Grant:
Expiration Date:   The earlier to occur of: (a) the date on which delivery of all Shares with respect to RSUs granted hereunder occurs and (b) the tenth anniversary of the Date of Grant.

Vesting: If application of a vesting percentage would cause vesting of a fractional share, then such vesting shall be rounded down to the nearest whole share and shall cumulate with any other fractional shares and such fractions shall vest as they aggregate into a whole Share.

 

  (a) No RSUs will vest until the earliest to occur of: (i) December 31, 2013, (ii) an earlier date between January 1, 2013 and December 31, 2013 that is specified by the Company; and (iii) the date of a Change of Control (any of the foregoing (i), (ii) and (iii) being an “ Initial Vesting Event ”).

The number of RSUs that vest on an Initial Vesting Event shall be calculated as follows: (i) If Participant has been in Continuous Service Status for at least one year from the RSU Start Date (such one-year anniversary of the RSU Start Date, the “ Cliff Date ”), whether or not Participant is in Continuous Service Status on the Initial Vesting Event, the number of RSUs that shall vest on the Initial Vesting Event shall be equal to the product obtained by multiplying the “Total Number of RSUs” identified above by the sum of (x) fourteen forty-eighths (14/48) plus (y) a fraction, the numerator of which is the number of Quarterly Vesting Dates on which the Participant was in Continuous Service Status after the Cliff Date (not to exceed eleven [11] such Quarterly Vesting Dates) and the denominator of which is sixteen (16), plus (z) one-forty-eighth (1/48) provided that Participant was in Continuous Service Status on the four-year anniversary of the RSU Start Date; and (ii) if Participant has not been in Continuous Service Status for at least one year from the RSU Start Date, then the number of vested RSUs at the Initial Vesting Event shall be zero.


(b) If Participant is in Continuous Service Status on the date of the Initial Vesting Event, then with respect to RSUs that have not vested as of such Initial Vesting Event, vesting shall be determined as follows (each vesting date under either of the following (i) or (ii) being a “ Subsequent Vesting Event ”): (i) If Participant has not been in Continuous Service Status for at least one year from the RSU Start Date at the time of the Initial Vesting Event, then on the Cliff Date, fourteen forty-eighths (14/48) of the RSUs will vest provided that Participant has been in Continuous Service Status on such Cliff Date, and thereafter on each subsequent Quarterly Vesting Date (not to exceed eleven [11] such Quarterly Vesting Dates); 1/16th of the RSUs will vest provided that Participant has been in Continuous Service Status on each such subsequent Quarterly Vesting Date, and finally on the four-year anniversary of the RSU Start Date one-forty-eighth (1/48) of the RSUs will vest provided that Participant is in Continuous Service Status on such date; and (ii) If Participant has been in Continuous Service Status for at least one year from the RSU Start Date at the time of the Initial Vesting Event, vesting of any unvested RSUs shall continue on each subsequent Quarterly Vesting Date (not to exceed an aggregate of eleven [11] Quarterly Vesting Dates following the Cliff Date) at a rate of 1/16th of the RSUs provided that Participant has been in Continuous Service Status on each such subsequent Quarterly Vesting Date, and finally on the four-year anniversary of the RSU Start Date one-forty-eighth (1/48) of the RSUs will vest provided that Participant is in Continuous Service Status on such date. Participant agrees and acknowledges that this vesting schedule may change prospectively in the event that Participant’s service status changes between full and part time status in accordance with Company policies relating to work schedules and vesting of awards.

(c) There will be four dates in each calendar year that will be “Quarterly Vesting Dates pursuant to this Notice of Grant: January 15 th , April 15 th , July 15 th , and October 15 th .

Settlement: RSUs that vest as of the Initial Vesting Event or any Subsequent Vesting Event shall be settled as soon as practicable (i) on a date between January 1, 2013 and December 31, 2013, or if earlier, in the year in which a Change of Control occurs (provided the Change of Control is also a “change of control event” for purposes of Section 409A of the Code) for RSUs that vest pursuant to an Initial Vesting Event and (ii) in no event later than the last day of the calendar year in which RSUs vest pursuant to a Subsequent Vesting Event. Settlement means the delivery of the Shares vested under an RSU. Settlement of RSUs on the Initial Vesting Event or any Subsequent Vesting Event shall be in Shares unless at the time of settlement the Administrator, in its sole discretion, determines that settlement shall, in whole or in part, be in the form of cash. Settlement of vested RSUs shall occur whether or not Participant is in Continuous Service Status at the time of settlement. Upon delivery of the Shares, the Company will satisfy its tax withholding obligations and may withhold a number of shares with a fair market value equal to the amount the Company is then required to withhold for taxes.

By accepting (whether in writing, electronically or otherwise) the RSUs, Participant acknowledges and agrees to the following:

Participant understands that, to the extent permitted under applicable law, his or her employment or consulting relationship with the Company is for an unspecified duration, can be terminated at any time ( i.e. , is “at-will”), and that nothing in this Notice of Grant, the RSU Agreement or the Plan changes the at-will

 

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nature of that relationship. Participant also understands that this Notice of Grant supersedes any prior agreement with respect to the RSUs in any offer letter to the extent permitted under the Code (and compliant with Section 409A of the Code) and is subject to the terms and conditions of both the RSU Agreement and the Plan, both of which are incorporated herein by reference. Participant has read both the RSU Agreement and the Plan.

 

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FACEBOOK, INC.

2005 STOCK PLAN

NOTICE OF RESTRICTED STOCK UNIT AWARD

GRANT NUMBER:

Terms defined in the Company’s 2005 Stock Plan (the “ Plan ”) shall have the same meanings in this Notice of Restricted Stock Unit Award (“ Notice of Grant ”).

Name:

Address:

You (“ Participant ”) have been granted an award of Restricted Stock Units (“ RSUs ”), subject to the terms and conditions of the Plan and the attached Restricted Stock Unit Agreement (hereinafter “ RSU Agreement ”) under the Plan, as follows:

 

Total Number of RSUs:
RSU Start Date:
Date of Grant:
Expiration Date:   The earlier to occur of: (a) the date on which delivery of all Shares with respect to RSUs granted hereunder occurs and (b) the tenth anniversary of the Date of Grant.

Vesting: If application of a vesting percentage would cause vesting of a fractional share, then such vesting shall be rounded down to the nearest whole share and shall cumulate with any other fractional shares and such fractions shall vest as they aggregate into a whole Share.

 

  (a) No RSUs will vest until the earliest to occur of: (i) December 31, 2013, (ii) an earlier date between January 1, 2013 and December 31, 2013 that is specified by the Company; and (iii) the date of a Change of Control (any of the foregoing (i), (ii) and (iii) being an “ Initial Vesting Event ”).

The number of RSUs that vest on an Initial Vesting Event shall be calculated as follows: (i) If Participant has been in Continuous Service Status for at least one year from the RSU Start Date (such one-year anniversary of the RSU Start Date, the “ Cliff Date ”), whether or not Participant is in Continuous Service Status on the Initial Vesting Event, the number of RSUs that shall vest on the Initial Vesting Event shall be equal to the product obtained by multiplying the “Total Number of RSUs” identified above by the sum of (x) twelve sixtieths (12/60) plus (y) a fraction, the numerator of which is the number of Quarterly Vesting Dates on which the Participant was in Continuous Service Status after the Cliff Date and the denominator of which is twenty (20); and (ii) if Participant has not been in Continuous Service Status for at least one year from the RSU Start Date, then the number of vested RSUs at the Initial Vesting Event shall be zero.


(b) If Participant is in Continuous Service Status on the date of the Initial Vesting Event, then with respect to RSUs that have not vested as of such Initial Vesting Event, vesting shall be determined as follows (each vesting date under either of the following (i) or (ii) being a “ Subsequent Vesting Event ”): (i) If Participant has not been in Continuous Service Status for at least one year from the RSU Start Date at the time of the Initial Vesting Event, then on the Cliff Date, twelve sixtieths (12/60) of the RSUs will vest provided that Participant has been in Continuous Service Status on such Cliff Date, and thereafter on each subsequent Quarterly Vesting Date; 1/20th of the RSUs will vest provided that Participant has been in Continuous Service Status on each such subsequent Quarterly Vesting Date; and (ii) If Participant has been in Continuous Service Status for at least one year from the RSU Start Date at the time of the Initial Vesting Event, vesting of any unvested RSUs shall continue on each subsequent Quarterly Vesting Date at a rate of 1/20th of the RSUs provided that Participant has been in Continuous Service Status on each such subsequent Quarterly Vesting Date. Participant agrees and acknowledges that this vesting schedule may change prospectively in the event that Participant’s service status changes between full and part time status in accordance with Company policies relating to work schedules and vesting of awards.

(c) There will be four dates in each calendar year that will be “Quarterly Vesting Dates pursuant to this Notice of Grant: January 15 th , April 15 th , July 15 th , and October 15 th .

Settlement: RSUs that vest as of the Initial Vesting Event or any Subsequent Vesting Event shall be settled as soon as practicable (i) on a date between January 1, 2013 and December 31, 2013, or if earlier, in the year in which a Change of Control occurs (provided the Change of Control is also a “change of control event” for purposes of Section 409A of the Code) for RSUs that vest pursuant to an Initial Vesting Event and (ii) in no event later than the last day of the calendar year in which RSUs vest pursuant to a Subsequent Vesting Event. Settlement means the delivery of the Shares vested under an RSU. Settlement of RSUs on the Initial Vesting Event or any Subsequent Vesting Event shall be in Shares unless at the time of settlement the Administrator, in its sole discretion, determines that settlement shall, in whole or in part, be in the form of cash. Settlement of vested RSUs shall occur whether or not Participant is in Continuous Service Status at the time of settlement. Upon delivery of the Shares, the Company will satisfy its tax withholding obligations and may withhold a number of shares with a fair market value equal to the amount the Company is then required to withhold for taxes.

By accepting (whether in writing, electronically or otherwise) the RSUs, Participant acknowledges and agrees to the following:

Participant understands that, to the extent permitted under applicable law, his or her employment or consulting relationship with the Company is for an unspecified duration, can be terminated at any time ( i.e. , is “at-will”), and that nothing in this Notice of Grant, the RSU Agreement or the Plan changes the at-will nature of that relationship. Participant also understands that this Notice of Grant supersedes any prior agreement with respect to the RSUs in any offer letter to the extent permitted under the Code (and compliant with Section 409A of the Code) and is subject to the terms and conditions of both the RSU Agreement and the Plan, both of which are incorporated herein by reference. Participant has read both the RSU Agreement and the Plan.

 

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FACEBOOK, INC.

2005 STOCK PLAN

NOTICE OF RESTRICTED STOCK UNIT AWARD

GRANT NUMBER:

Terms defined in the Company’s 2005 Stock Plan (the “ Plan ”) shall have the same meanings in this Notice of Restricted Stock Unit Award (“ Notice of Grant ”).

Name:

Address:

You (“ Participant ”) have been granted an award of Restricted Stock Units (“ RSUs ”), subject to the terms and conditions of the Plan and the attached Restricted Stock Unit Agreement (hereinafter “ RSU Agreement ”) under the Plan, as follows:

 

Total Number of RSUs:
RSU Start Date:
Date of Grant:
Expiration Date:   The earlier to occur of: (a) the date on which delivery of all Shares with respect to RSUs granted hereunder occurs and (b) the tenth anniversary of the Date of Grant.

Vesting: If application of a vesting percentage would cause vesting of a fractional share, then such vesting shall be rounded down to the nearest whole share and shall cumulate with any other fractional shares and such fractions shall vest as they aggregate into a whole Share.

 

  (a) No RSUs will vest until the earliest to occur of: (i) December 31, 2013, (ii) an earlier date between January 1, 2013 and December 31, 2013 that is specified by the Company; and (iii) the date of a Change of Control (any of the foregoing (i), (ii) and (iii) being an “ Initial Vesting Event ”).

The number of RSUs that vest on an Initial Vesting Event shall be calculated as follows: (i) If Participant has been in Continuous Service Status for at least three months from the RSU Start Date, whether or not Participant is in Continuous Service Status on the Initial Vesting Event, the number of RSUs that shall vest on the Initial Vesting Event shall be equal to the product obtained by multiplying the “Total Number of RSUs” identified above by a fraction, the numerator of which is the number of Quarterly Vesting Dates on which the Participant was in Continuous Service Status and the denominator of which is sixteen (16); and (ii) if Participant has not been in Continuous Service Status for at least three months from the RSU Start Date, then the number of vested RSUs at the Initial Vesting Event shall be zero.

(b) If Participant is in Continuous Service Status on the date of the Initial Vesting Event, then with respect to RSUs that have not vested as of such Initial Vesting Event, vesting


shall be determined as follows (each vesting date under either of the following (i) or (ii) being a “ Subsequent Vesting Event ”): (i) 1/16th of the RSUs will vest on the first Quarterly Vesting Date after the Initial Vesting Event, provided that Participant has been in Continuous Service Status; and (ii) Vesting of any unvested RSUs shall continue on each subsequent Quarterly Vesting Date at a rate of 1/16th of the RSUs, provided that Participant has been in Continuous Service Status on each such subsequent Quarterly Vesting Dates. Participant agrees and acknowledges that this vesting schedule may change prospectively in the event that Participant’s service status changes between full and part time status in accordance with Company policies relating to work schedules and vesting of awards.

(c) There will be four dates in each calendar year that will be “Quarterly Vesting Dates pursuant to this Notice of Grant: January 15 th , April 15 th , July 15 th , and October 15 th .

Settlement: RSUs that vest as of the Initial Vesting Event or any Subsequent Vesting Event shall be settled as soon as practicable (i) on a date between January 1, 2013 and December 31, 2013, or if earlier, in the year in which a Change of Control occurs (provided the Change of Control is also a “change of control event” for purposes of Section 409A of the Code) for RSUs that vest pursuant to an Initial Vesting Event and (ii) in no event later than the last day of the calendar year in which RSUs vest pursuant to a Subsequent Vesting Event. Settlement means the delivery of the Shares vested under an RSU. Settlement of RSUs on the Initial Vesting Event or any Subsequent Vesting Event shall be in Shares unless at the time of settlement the Administrator, in its sole discretion, determines that settlement shall, in whole or in part, be in the form of cash. Settlement of vested RSUs shall occur whether or not Participant is in Continuous Service Status at the time of settlement. Upon delivery of the Shares, the Company will satisfy its tax withholding obligations and may withhold a number of shares with a fair market value equal to the amount the Company is then required to withhold for taxes.

By accepting (whether in writing, electronically or otherwise) the RSUs, Participant acknowledges and agrees to the following:

Participant understands that, to the extent permitted under applicable law, his or her employment or consulting relationship with the Company is for an unspecified duration, can be terminated at any time ( i.e. , is “at-will”), and that nothing in this Notice of Grant, the RSU Agreement or the Plan changes the at-will nature of that relationship. Participant also understands that this Notice of Grant supersedes any prior agreement with respect to the RSUs in any offer letter to the extent permitted under the Code (and compliant with Section 409A of the Code) and is subject to the terms and conditions of both the RSU Agreement and the Plan, both of which are incorporated herein by reference. Participant has read both the RSU Agreement and the Plan.

 

- 2 -


FACEBOOK, INC.

2005 STOCK PLAN

NOTICE OF RESTRICTED STOCK UNIT AWARD

GRANT NUMBER:

Terms defined in the Company’s 2005 Stock Plan (the “ Plan ”) shall have the same meanings in this Notice of Restricted Stock Unit Award (“ Notice of Grant ”).

Name:

Address:

You (“Participant”) have been granted an award of Restricted Stock Units (“RSUs”), subject to the terms and conditions of the Plan and the attached Restricted Stock Unit Agreement (hereinafter “RSU Agreement”) under the Plan, as follows:

Total Number of RSUs :

RSU Start Date:

Date of Grant:

 

Expiration Date:   The earlier to occur of: (a) the date on which settlement of all vested RSUs granted hereunder occurs and (b) the tenth anniversary of the Date of Grant.

Vesting: If application of a vesting percentage would cause vesting of a fractional share, then such vesting shall be rounded down to the nearest whole share and shall cumulate with any other fractional shares and such fractions shall vest as they aggregate into a whole Share.

(a) No RSUs will vest until the earliest to occur of: (i) December 31, 2013, (ii) an earlier date between January 1, 2013 and December 31, 2013 that is specified by the Company; and (iii) the date of a Change of Control (any of the foregoing (i), (ii) and (iii) being an “ Initial Vesting Event ”).

The number of RSUs that vest on an Initial Vesting Event shall be calculated as follows: whether or not Participant is in Continuous Service Status on the Initial Vesting Event, the number of RSUs that shall vest on the Initial Vesting Event shall be equal to the product obtained by multiplying the “Total Number of RSUs” identified above by a fraction, the numerator of which is the number of quarterly anniversaries of the RSU Start Date on which the Participant was in Continuous Service Status and the denominator of which is sixteen (16).

( b ) If Participant is in Continuous Service Status on the date of the Initial Vesting Event, then with respect to RSUs that have not vested as of such Initial Vesting Event, vesting shall be determined as follows (each vesting date being a “ Subsequent Vesting Event ”): vesting of any unvested RSUs shall continue on each subsequent quarterly anniversary of the RSU Start Date at a rate of 1/16th of the “Total Number of RSUs” provided that Participant has been in Continuous Service Status on each such subsequent quarterly anniversary. Participant agrees and acknowledges that this vesting schedule may change prospectively in the event that Participant’s service status changes between full and part-time status in accordance with Company policies relating to work schedules and vesting of awards.

 


There will be four dates in each calendar year that will be “ Quarterly Vesting Dates ” pursuant to this Notice of Grant: January 15th, April 15th, July 15th, and October 15th.

Settlement: Following the occurrence of the Initial Vesting Event or any Subsequent Vesting Event as set forth above, RSUs that vest as of the Initial Vesting Event or any Subsequent Vesting Event shall be settled as soon as practicable but in no event later than the earlier of (i) one hundred twenty (120) days after vesting or (ii) March 15 of the year following the year in which such Initial Vesting Event or Subsequent Vesting Event occurred. Settlement means the delivery of the Shares vested under an RSU. Settlement of RSUs on the Initial Vesting Event or any Subsequent Vesting Event shall be in Shares unless at the time of settlement the Administrator, in its sole discretion, determines that settlement shall, in whole or in part, be in the form of cash. Settlement of vested RSUs shall occur whether or not Participant is in Continuous Service Status at the time of settlement.

By accepting (whether in writing, electronically or otherwise) the RSUs, Participant acknowledges and agrees to the following:

Participant understands that, to the extent permitted under applicable law, his or her employment or consulting relationship with the Company is for an unspecified duration, can be terminated at any time ( i.e. , is “at-will”), and that nothing in this Notice of Grant, the RSU Agreement or the Plan changes the at-will nature of that relationship. Participant acknowledges that the vesting of the RSUs pursuant to this Notice of Grant is conditioned on the occurrence of an Initial Vesting Event or a Subsequent Vesting Event. Participant also understands that this Notice of Grant is subject to the terms and conditions of both the RSU Agreement and the Plan, both of which are incorporated herein by reference. Participant has read both the RSU Agreement and the Plan.

 

-2-


FACEBOOK, INC.

RESTRICTED STOCK UNIT AGREEMENT UNDER THE

2005 STOCK PLAN

Unless otherwise defined herein, the terms defined in the Company’s 2005 Stock Plan (the “ Plan ”) shall have the same defined meanings in this Restricted Stock Unit Agreement (the “ Agreement ”).

You have been granted Restricted Stock Units (“ RSUs ”) subject to the terms, restrictions and conditions of the Plan, the Notice of Restricted Stock Unit Grant (“ Notice of Grant ”) and this Agreement.

1. No Stockholder Rights . Unless and until such time as Shares are issued in settlement of vested RSUs, Participant shall have no ownership of the Shares allocated to the RSUs and shall have no right to dividends or to vote such Shares.

2. Dividend Equivalents . Dividends, if any (whether in cash or Shares), shall not be credited to Participant.

3. No Transfer . The RSUs and any interest therein shall not be sold, assigned, transferred, pledged, hypothecated, or otherwise disposed of.

4. Termination . If Participant’s Continuous Service Status terminates for any reason, all RSUs for which vesting is no longer possible under the terms of the Notice of Grant and this Agreement shall be forfeited to the Company forthwith, and all rights of Participant to such RSUs shall immediately terminate. In case of any dispute as to whether such termination has occurred, the Administrator shall have sole discretion to determine whether such termination has occurred and the effective date of such termination.

5. Acknowledgement . The Company and Participant agree that the RSUs are granted under and governed by the Notice of Grant, this Agreement and by the provisions of the Plan (incorporated herein by reference). Participant: (i) acknowledges receipt of a copy of each of the foregoing documents, (ii) represents that Participant has carefully read and is familiar with their provisions, and (iii) hereby accepts the RSUs subject to all of the terms and conditions set forth herein and those set forth in the Plan and the Notice of Grant.

6. Withholding of Tax . When the RSUs are vested and/or settled the fair market value of the Shares is treated as income subject to withholding by the Company for income and employment taxes. The Company shall withhold an amount equal to the tax due at vesting and/or settlement from the Participant’s other compensation or require Participant to remit to the Company an amount equal to the tax then due. In its sole discretion, the Company may instead withhold a number of Shares with a fair market value (determined on the date the Shares are issued) equal to the minimum amount the Company is then required to withhold for taxes. Further, a RSU is considered a deferral of compensation that may be subject to Section 409A of the Code. Section 409A of the Code imposes special rules to the timing of making and effecting certain amendments of this RSU with respect to distribution of any deferred compensation. You should consult your personal tax advisor for more information on the actual and potential tax consequences of this RSU.

7. Limitations on Transfer of Shares . In addition to any other limitation on transfer created by applicable securities laws, Participant shall not assign, encumber or dispose of any interest in the Shares issued pursuant to this Restricted Stock Unit Agreement except in compliance with the provisions below and applicable securities laws.

(a) Right of First Refusal. Before any Shares held by Participant or any transferee of Participant (either being sometimes referred to herein as the “ Holder ”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth herein (the “Right of First Refusal”).


(i) Notice of Proposed Transfer. The Holder of the Shares shall deliver to the Company a written notice (the “ Notice ”) stating: (i) the Holder’s bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed Participant or other transferee (“ Proposed Transferee ”); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the terms and conditions of each proposed sale or transfer. The Holder shall offer the Shares at the same price (the “ Offered Price ”) and upon the same terms (or terms as similar as reasonably possible) to the Company or its assignee(s).

(ii) Exercise of Right of First Refusal. At any time within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (iii) below.

(iii) Purchase Price. The purchase price (“ Purchase Price ”) for the Shares purchased by the Company or its assignee(s) shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board in good faith.

(iv) Payment. Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness, or by any combination thereof within thirty (30) days after receipt of the Notice or in the manner and at the times set forth in the Notice.

(v) Holder’s Right to Transfer. If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided herein, then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within sixty (60) days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the Right of First Refusal shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, or if the Holder proposes to change the price or other terms to make them more favorable to the Proposed Transferee, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.

(vi) Exception for Certain Family Transfers. Anything to the contrary contained herein notwithstanding, the transfer of any or all of the Shares during Participant’s lifetime or on Participant’s death by will or intestacy to Participant’s Immediate Family or a trust for the benefit of Participant’s Immediate Family shall be exempt from these provisions other than agreement in writing that the Right of First Refusal shall continue to apply to the Shares in the hands of such Proposed Transferee. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section, and there shall be no further transfer of such Shares except in accordance with these terms. “Immediate Family” as used herein shall mean spouse, lineal descendant or antecedent, father, mother, brother or sister.

(b) Involuntary Transfer.

(i) Company’s Right to Purchase upon Involuntary Transfer. In the event, at any time after the date of this agreement, of any transfer by operation of law or other involuntary transfer (including death or divorce, but excluding a transfer to Immediate Family as set forth above) of all or a

 

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portion of the Shares by the record holder thereof, the Company shall have an option to purchase all of the Shares transferred at the Fair Market Value of the Shares on the date of transfer. Upon such a transfer, the person acquiring the Shares shall promptly notify the Secretary of the Company of such transfer. The right to purchase such Shares shall be provided to the Company for a period of thirty (30) days following receipt by the Company of written notice by the person acquiring the Shares.

(ii) Price for Involuntary Transfer. With respect to any stock to be transferred pursuant to subsection (b)(i) above, the price per Share shall be a price set by the Board that will reflect the current value of the stock in terms of present earnings and future prospects of the Company. The Company shall notify Participant or his or her executor of the price so determined within thirty (30) days after receipt by it of written notice of the transfer or proposed transfer of Shares. However, if the Participant does not agree with the valuation as determined by the Board, the Participant shall be entitled to have the valuation determined by an independent appraiser to be mutually agreed upon by the Company and the Participant and whose fees shall be borne equally by the Company and the Participant.

(c) Assignment. The Company’s rights under this Section 7 may be assigned in whole or in part to any shareholder or shareholders of the Company or other persons or organizations.

(d) Restrictions Binding on Transferees. All transferees of Shares or any interest therein will receive and hold such Shares or interest subject to the provisions of this agreement. Any sale or transfer of the Company’s Shares shall be void unless the provisions of this agreement are satisfied.

(e) Termination of Rights. The rights provided under this Section 7 shall terminate upon the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “ Securities Act ”) or as otherwise determined by the Company or its successor.

8. U.S. Tax Consequences . Participant acknowledges that there will be tax consequences upon vesting and/or settlement of the RSUs and/or disposition of the Shares, if any, received in connection therewith, and Participant should consult a tax adviser regarding Participant’s tax obligations prior to such settlement or disposition.

9. Compliance with Laws and Regulations . The issuance of Shares will be subject to and conditioned upon compliance by the Company and Participant (including any written representations, warranties and agreements as the Administrator may request of Participant for compliance with Applicable Laws) with all applicable state and federal laws and regulations and with all applicable requirements of any stock exchange or automated quotation system on which the Company’s Common Stock may be listed or quoted at the time of such issuance or transfer.

10. Legend on Certificates . The certificates representing the Shares issued hereunder shall be subject to such stop transfer orders and other restrictions as the Administrator may deem advisable under the Plan, this Restricted Stock Unit Agreement or the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such Shares are listed, and any applicable Federal or state laws, and the Administrator may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

11. Successors and Assigns . The Company may assign any of its rights under this Agreement. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer set forth herein, this Agreement will be binding upon Participant and Participant’s heirs, executors, administrators, legal representatives, successors and assigns.

12. Entire Agreement; Severability . The Plan and Notice of Grant are incorporated herein by reference. The Plan, the Notice of Grant and this Agreement constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and

 

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agreements of the Company and Participant with respect to the subject matter hereof. If any provision of this Agreement is determined by a court of law to be illegal or unenforceable, then such provision will be enforced to the maximum extent possible and the other provisions will remain fully effective and enforceable.

13. Market Standoff Agreement . Participant agrees that in connection with any registration of the Company’s securities that, upon the request of the Company or the underwriters managing any public offering of the Company’s securities, Participant will not sell or otherwise dispose of any Shares without the prior written consent of the Company or such underwriters, as the case may be, for such reasonable period of time after the effective date of such registration as may be requested by such managing underwriters and subject to all restrictions as the Company or the underwriters may specify. Participant will enter into any agreement reasonably required by the underwriters to implement the foregoing.

14. No Rights as Employee, Director or Consultant . Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary of the Company, to terminate Participant s Continuous Service Status, for any reason, with or without cause.

15. Information to Participants . If the Company is relying on an exemption from registration under Section 12(h)-1 of the Exchange Act and such information is required to be provided by such Section 12(h)-1, the Company shall provide the information described in Rules 701(e)(3), (4), and (5) of the Securities Act (the “701 Disclosures”) by a method allowed under Section 12(h)-1 of the Exchange Act in accordance with Section 12(h)-1 of the Exchange Act, provided that Participant agrees to keep the information confidential.

By your acceptance hereof (whether written, electronic or otherwise), Participant agrees that this RSU is granted under and governed by the terms and conditions of the Plan, the Notice of Grant and this Agreement. Participant agrees, to the fullest extent permitted by law, in lieu of receiving documents in paper format, to accept the electronic delivery of any documents the Company, or any third party involved in administering the Plan as the Company may designate, may deliver in connection with this grant (including the Plan, the Notice of Grant, this Agreement, the 701 Disclosures, account statements, or other communications or information) whether via the Company’s intranet or the Internet site of such third party or via email or such other means of electronic delivery specified by the Company. Participant has reviewed the Plan, the Notice of Grant and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to accepting this Agreement, and fully understands all provisions of the Plan, the Notice of Grant and this Agreement. Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions relating to the Plan, the Notice of Grant and this Agreement. Participant further agrees to notify the Company upon any change in Participant’s residence or email address.

 

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EXHIBIT 10.3

Facebook, Inc.

2005 Officers’ Stock Plan

November 8, 2005

The purposes of this 2005 Officers’ Stock Plan (the “ Plan ”) are to make available for purchase to certain employees or officers of Facebook, Inc. (the “ Company ”) shares and options, such options either in the form of an Incentive Stock Option (an option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code, as designated in an applicable Option Agreement) or a Nonstatutory Stock Option (an option not intended to qualify as an Incentive Stock Option, as designated in an applicable Option Agreement), to purchase shares of the Company’s Common Stock. The maximum number of shares of the Company’s Common Stock that may be sold under this Plan is 1,500,000 shares.

The Board of Directors of the Company, or any committee designated by the Board, shall determine the persons to whom rights and options to purchase stock under the Plan shall be granted, as well as the terms and conditions of such grants. Rights and options to purchase shares under the Plan shall be nontransferable other than by will or the laws of descent and distribution.

Notwithstanding any designation hereunder or in any Option Agreement, to the extent that the aggregate fair market value of shares of Common Stock with respect to which options designated as Incentive Stock Options are exercisable for the first time by any optionee during any calendar year (under all plans of the Company or any Parent or Subsidiary) exceeds $100,000, such excess options shall be treated as Nonstatutory Stock Options. For purposes of this paragraph, Incentive Stock Options shall be taken into account in the order in which they were granted, and the fair market value of the shares of Common Stock subject to an Incentive Stock Option shall be determined as of the date of the grant of such option.

Unless sooner terminated by the Board of Directors, this Plan shall terminate upon the date ten years from the date of the Plan’s adoption by the Board. The Company shall provide recipients of stock under this Plan Company financial statements at least annually as required by applicable law, unless such persons’ duties with the Company assure their access to equivalent information.

If required by any applicable statute or regulation, continuance of the Plan shall be subject to approval by the stockholders of the Company within twelve (12) months before or after the date the Plan is adopted. Such stockholder approval shall be obtained in the manner and to the degree required under the applicable statute or regulation.

Unless the Board of Directors determines otherwise, shares of Common Stock issued pursuant to this Plan shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of a recipient’s employment relationship with the Company. Any repurchase option granted to the Company shall conform to the requirements of all applicable laws.

Nothing in this Plan, nor anything in or related to any award granted under this Plan, shall confer upon any person any right with respect to continuation of such person’s employment relationship with the Company, nor shall it interfere in any way with an employee’s right or the Company’s right to terminate such person’s employment relationship at any time, with or without cause.


FACEBOOK, INC.

2005 OFFICERS’ STOCK PLAN

AMENDED AND RESTATED NOTICE OF STOCK OPTION GRANT

Mark Zuckerberg

You have been granted an option to purchase Common Stock of Facebook, Inc. (the “ Company ”) as follows:

 

Board Approval Date:

November 8, 2005

 

Date of Grant (Later of Board Approval Date or Commencement of Employment/Consulting) :

November 8, 2005

 

Exercise Price per Share:

$0.72

 

Total Number of Shares Granted:

1,500,000

 

Total Exercise Price:

$1,080,000.00

 

Type of Option:

Nonstatutory Stock Option

 

Expiration Date:

November 7, 2015

 

Vesting Commencement Date:

January 1, 2008

 

Vesting/Exercise Schedule:

This Option may be exercised, in whole or in part, at any time after the Date of Grant. So long as your Continuous Service Status with the Company continues, the Shares underlying this Option shall vest in accordance with the following schedule: 1/34th of the total number of Shares underlying this Option shall vest on February 1, 2008 and on each monthly anniversary of the Vesting Commencement Date, provided , however , that if the Company (i) is subject to a Change of Control (defined below) or (ii) conducts a registered public offering of its stock (the “ IPO ”), while your Continuous Service Status with the Company continues or during the 90-day period following the termination of your Continuous Service Status, then 100% of the shares subject to the Option will vest as of immediately prior to the Change of Control or the effectiveness of the IPO, as applicable.


  This Option shall vest as to 100% of the shares subject to the Option in the event of your death or Disability.

 

Change of Control:

For the purposes of this Option, a “ Change of Control ” means (i) a sale of all or substantially all of the Company’s assets or (ii) any merger, consolidation or other business combination transaction of the Company with or into another corporation, entity or person, other than a transaction in which the holders of at least a majority of the shares of voting capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by such shares remaining outstanding or by their being converted into shares of voting capital stock of the surviving entity) a majority of the total voting power represented by the shares of voting capital stock of the Company (or the surviving entity) outstanding immediately after such transaction.

 

Termination Period:

This Option may be exercised for 90 days after termination of your employment or consulting relationship except as set out in Section 5 of the Stock Option Agreement (but in no event later than the Expiration Date). You are responsible for keeping track of these exercise periods following the termination for any reason of your service relationship with the Company. The Company will not provide further notice of such periods.

By your signature and the signature of the Company’s representative below, you and the Company agree that this option is granted under and governed by the terms and conditions of the Facebook, Inc. 2005 Officers’ Stock Plan and the Amended and Restated Stock Option Agreement, both of which are attached and made a part of this document.

All capitalized terms in this Notice shall have the meaning ascribed to them in this Notice or, if not otherwise defined herein, in the attached Stock Option Agreement.

In addition, you agree and acknowledge that your rights to any Shares underlying the Option will be earned only as you provide services to the Company over time, that the grant of the Option is not as consideration for services you rendered to the Company prior to your Vesting Commencement Date, and that nothing in this Notice or the attached documents confers upon you any right to continue your employment or consulting relationship with the Company for any period of time, nor does it interfere in any way with your right or the Company’s right to terminate that relationship at any time, for any reason, with or without cause.

 

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Also, the Exercise Price Per Share has been set at the fair market value of the Shares on the Date of Grant in good faith compliance with the applicable guidance issued by the IRS under Section 409A of the Code in order to avoid the Option being treated as deferred compensation under Section 409A of the Code. However, there is no guarantee that the IRS will agree with the valuation and, by signing below, you agree and acknowledge that the Company shall not be held liable for any applicable costs, taxes, or penalties associated with the Option if, in fact, the IRS were to determine that the Option constitutes deferred compensation under Section 409A of the Code. You should consult with your own tax advisor concerning the tax consequences of such a determination by the IRS.

 

  Facebook, Inc.

/s/ Mark Zuckerberg

  By:  

/s/ David Ebersman

Mark Zuckerberg   Name:  

 

  Title:  

 

 

 

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FACEBOOK, INC.

2005 OFFICERS’ STOCK PLAN

AMENDED AND RESTATED STOCK OPTION AGREEMENT

1. Grant of Option . Facebook, Inc„ a Delaware corporation (the “ Company ”), hereby grants to Mark Zuckerberg (“ Optionee ”), an option (the “ Option ”) to purchase the total number of shares of Common Stock (the “ Shares ”) set forth in the Notice of Stock Option Grant (the “ Notice ”), at the exercise price per Share set forth in the Notice (the “ Exercise Price ”) subject to the terms, definitions and provisions of the Facebook, Inc. 2005 Officers’ Stock Plan (the “ Plan ”) adopted by the Company, which is incorporated in this Agreement by reference. Unless otherwise defined in this Agreement, the terms used in this Agreement shall have the meanings defined in the Plan.

2. Designation of Option . This Option is intended to be an Incentive Stock Option as defined in Section 422 of the Code only to the extent so designated in the Notice, and to the extent it is not so designated or to the extent the Option does not qualify as an Incentive Stock Option, it is intended to be a Nonstatutory Stock Option.

Notwithstanding the above, if designated as an Incentive Stock Option, in the event that the Shares subject to this Option (and all other Incentive Stock Options granted to Optionee by the Company or any Parent or Subsidiary, including under other plans of the Company) that first become exercisable in any calendar year have an aggregate fair market value (determined for each Share as of the date of grant of the option covering such Share) in excess of $100,000, the Shares in excess of $100,000 shall be treated as subject to a Nonstatutory Stock Option.

3. Exercise of Option . This Option shall be exercisable during its term in accordance with the Vesting/Exercise Schedule set out in the Notice as follows:

(a) Right to Exercise .

(i) This Option may not be exercised for a fraction of a share.

(ii) In the event of Optionee’s death, Disability or other termination of employment, the exercisability of the Option is governed by Section 5 below, subject to the limitations contained in this Section 3.

(iii) In no event may this Option be exercised after the Expiration Date of the Option as set forth in the Notice.

(b) Method of Exercise .

(i) This Option shall be exercisable by execution and delivery of the Early Exercise Notice and Restricted Stock Purchase Agreement attached hereto as Exhibit A, the Exercise Notice and Restricted Stock Purchase Agreement attached hereto as Exhibit B, or any other form of written notice approved for such purpose by the Company which shall state Optionee’s election to exercise the Option, the number of Shares in respect of which the Option


is being exercised, and such other representations and agreements as to the holder’s investment intent with respect to such Shares as may be required by the Company pursuant to the provisions of this Agreement and the Plan. Such written notice shall be signed by Optionee and shall be delivered to the Company by such means as are determined by the Plan Administrator in its discretion to constitute adequate delivery. The written notice shall be accompanied by payment of the Exercise Price in accordance with Section 4 hereof. This Option shall be deemed to be exercised upon receipt by the Company of such written notice accompanied by the Exercise Price.

(ii) As a condition to the exercise of this Option, Optionee agrees to make adequate provision for federal, state or other tax withholding obligations, if any, which arise upon the vesting or exercise of the Option, or disposition of Shares, whether by withholding, direct payment to the Company, or otherwise.

(iii) The Company is not obligated, and will have no liability for failure, to issue or deliver any Shares upon exercise of the Option unless such issuance or delivery would comply with the Applicable Laws, with such compliance determined by the Company in consultation with its legal counsel. This Option may not be exercised if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any applicable federal or state securities or other law or regulation, including any rule under Part 221 of Title 12 of the Code of Federal Regulations as promulgated by the Federal Reserve Board. As a condition to the exercise of this Option, the Company may require Optionee to make any representation and warranty to the Company as may be required by the Applicable Laws. Assuming such compliance, for income tax purposes the Shares shall be considered transferred to Optionee on the date on which the Option is exercised with respect to such Shares.

4. Method of Payment . Payment of the Exercise Price shall be by any of the following, or a combination of the following, at the election of Optionee:

(a) cash or check;

(b) cancellation of indebtedness, with the prior written permission of the Company;

(c) prior to the date, if any, upon which the Common Stock becomes a Listed Security, by surrender of other shares of Common Stock of the Company that have an aggregate Fair Market Value on the date of surrender equal to the Exercise Price of the Shares as to which the Option is being exercised. In the case of shares acquired directly or indirectly from the Company, such shares must have been owned by Optionee for more than six (6) months on the date of surrender (or such other period of time as is necessary to avoid the Company’s incurring adverse accounting charges);

(d) by way of a “net” exercise pursuant to which the Company shall retain that number of Shares having a Fair Market Value equal to the amount of the aggregate exercise price of the Option associated with such exercise, or such portion thereof as elected by Optionee; or

 

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(e) following the date, if any, upon which the Common Stock is a Listed Security, by way of a “same day sale” cashless brokered exercise, subject to Optionee’s delivery of a properly executed exercise notice together with irrevocable instructions to a broker participating in such cashless brokered exercise program to deliver promptly to the Company the amount required to pay the exercise price (and, if requested by Optionee, applicable withholding taxes).

5. Termination of Relationship . Following the date of termination of Optionee’s Continuous Service Status for any reason (the “ Termination Date ”), Optionee may exercise the Option only as set forth in the Notice and this Section 5. To the extent that Optionee is not entitled to exercise this Option as of the Termination Date, or if Optionee does not exercise this Option within the Termination Period set forth in the Notice or the termination periods set forth below, the Option shall terminate in its entirety. In no event may any Option be exercised after the Expiration Date of the Option as set forth in the Notice.

(a) Termination . In the event of termination of Optionee’s Continuous Service Status, other than as a result of Optionee’s Disability or death or for Cause, Optionee may, to the extent Optionee is vested in the Option Shares at the date of such termination (the “ Termination Date ”), exercise this Option during the Termination Period set forth in the Notice.

(b) Other Terminations . In connection with any termination other than a termination covered by Section 5(a), Optionee may exercise the Option only as described below:

(i) Termination upon Disability of Optionee . In the event of termination of Optionee’s Continuous Service Status as a result of Optionee’s Disability, Optionee may, but only within eighteen (18) months from the Termination Date, exercise this Option.

(ii) Death of Optionee . In the event of the death of Optionee: (a) during the term of this Option and while an Employee or Consultant of the Company and having been in Continuous Service Status since the date of grant of the Option, or (b) within thirty (30) days after Optionee’s Termination Date, the Option may be exercised at any time within eighteen (18) months following the date of death by Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance.

(iii) Termination for Cause . In the event of termination of an Optionee’s Continuous Service Status for Cause, any Option (including any exercisable portion thereof) held by such Optionee shall immediately terminate in its entirety upon first notification to the Optionee of termination of the Optionee’s Continuous Service Status.

6. Transferability of Option . The Option granted hereunder may be transferred (a) by will or the laws of descent or distribution, or (b) by Optionee, without consideration, to (i) any person who is a “family member” of Optionee’s, as such term is used in the instructions to Form S-8 (collectively, the “ Immediate Family Members ”); (ii) a trust, foundation or other entity solely for the benefit of Optionee and/or his Immediate Family Members; or (iii) any other transferee for purposes of estate planning as may be approved by the Board in its sole discretion (collectively, the “ Permitted Transferees ”); provided, that , Optionee gives the Board advance

 

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written notice describing the terms and conditions of the proposed transfer and the Board notifies Optionee in writing that such a transfer is in compliance with the terms of this Notice of Stock Option Grant and this Agreement ; provided, further , that the restrictions upon any portion of the Option transferred in accordance with this Section 6 shall apply to the Permitted Transferee and any reference in this Stock Option Agreement to Optionee shall be deemed to refer to the Permitted Transferee, except that (a) prior to a IPO, Permitted Transferees shall not be entitled to transfer any portion of the Option other than by will or the laws of descent and distribution, (b) Permitted Transferees shall not be entitled to exercise any transferred portion of the Option unless there shall be in effect a registration statement on an appropriate form covering the Common Stock to be acquired pursuant to the exercise of such Option if the Company determines that such a registration statement is necessary or appropriate, and (c) the consequences of the termination of Optionee’s employment by, or services to, the Company under the terms of this Agreement shall continue to be applied with respect to the Permitted Transferee to the extent, and for the periods, specified in the Notice of Stock Option Grant and this Agreement. In the event of a transfer of the Option, or any portion thereof, in accordance with this Section 6, Optionee and the Company agree to make such changes to any agreement relating to the Option or the exercise of the Option as may be necessary and appropriate in order to reflect that the Permitted Transferee has assumed the rights and obligations of Optionee thereunder. The terms of this Option shall be binding upon the executors, administrators, heirs, successors and assigns of Optionee.

7. Tax Consequences . Below is a brief summary as of the date of this Option of certain of the federal tax consequences of exercise of this Option and disposition of the Shares under the laws in effect as of the Date of Grant. THIS SUMMARY IS INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.

(a) Reserved .

(b) Nonstatutory Stock Option . If this Option does not qualify as an Incentive Stock Option, there may be a regular federal (and state) income tax liability upon the exercise of the Option. Optionee will be treated as having received compensation income (taxable at ordinary income tax rates) equal to the excess, if any, of the fair market value of the Shares on the date of exercise over the Exercise Price. If Optionee is an Employee, the Company will be required to withhold from Optionee’s compensation or collect from Optionee and pay to the applicable taxing authorities an amount equal to a percentage of this compensation income at the time of exercise. If Shares issued upon exercise of a Nonstatutory Stock Option are held for at least one year, any gain realized on disposition of the Shares will be treated as long-term capital gain for federal income tax purposes.

8. Lock-Up Agreement . In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing any underwritten offering of the Company’s securities, Optionee hereby agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company however and whenever acquired (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for

 

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such period of time (not to exceed 180 days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the public offering.

9. Effect of Agreement . Optionee acknowledges receipt of a copy of the Plan and represents that he is familiar with the terms and provisions thereof (and has had an opportunity to consult counsel regarding the Option terms), and hereby accepts this Option and agrees to be bound by its contractual terms as set forth herein and in the Plan. Optionee hereby agrees to accept as binding, conclusive and final all decisions and interpretations of the Plan Administrator regarding any questions relating to the Option. In the event of a conflict between the terms and provisions of the Plan and the terms and provisions of the Notice and this Agreement, the Plan terms and provisions shall prevail. The Option, including the Plan, constitutes the entire agreement between Optionee and the Company on the subject matter hereof and supersedes all proposals, written or oral, and all other communications between the parties relating to such subject matter.

10. Taxes .

(a) As a condition of the grant, vesting or exercise of this Option, Optionee (or in the case of Optionee’s death, the person exercising the Option) shall make such arrangements as the Company may require for the satisfaction of any applicable federal, state, local or foreign withholding tax obligations that may arise in connection with such grant, vesting or exercise of the Option or the issuance of Shares. The Company shall not be required to issue any Shares under this Agreement until such obligations are satisfied. If the Company allows the withholding or surrender of Shares to satisfy Optionee’s tax withholding obligations under this Section 10 (whether pursuant to Section 10(c), (d) or (e), or otherwise), the Company shall not allow Shares to be withheld in an amount that exceeds the minimum statutory withholding rates for federal and state tax purposes, including payroll taxes.

(b) In the case of an Employee and in the absence of any other arrangement, the Employee shall be deemed to have directed the Company to withhold or collect from his compensation an amount sufficient to satisfy such tax obligations from the next payroll payment otherwise payable after the date of an exercise of the Option.

(c) This Section 10(c) shall apply only after the date, if any, upon which the Common Stock becomes a Listed Security. In the case of an Optionee other than an Employee (or in the case of an Employee where the next payroll payment is not sufficient to satisfy such tax obligations, with respect to any remaining tax obligations), in the absence of any other arrangement and to the extent permitted under the Applicable Laws, Optionee shall be deemed to have elected to have the Company withhold from the Shares to be issued upon exercise of the Option that number of Shares having a Fair Market Value determined as of the applicable Tax Date (as defined below) equal to the amount required to be withheld. For purposes of this Section 10, the Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined under the Applicable Laws (the “ Tax Date ”).

 

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(d) If permitted in writing by the Company, in its sole discretion, Optionee may satisfy his tax withholding obligations upon exercise of an Option by surrendering to the Company Shares that have a Fair Market Value determined as of the applicable Tax Date equal to the amount required to be withheld. In the case of shares previously acquired from the Company that are surrendered under this Section 10(d), such Shares must have been owned by Optionee for more than six (6) months on the date of surrender (or such other period of time as is required for the Company to avoid adverse accounting charges).

(e) Any election or deemed election by Optionee to have Shares withheld to satisfy tax withholding obligations under Section 10(c) or (d) above shall be irrevocable as to the particular Shares as to which the election is made and shall be subject to the consent or disapproval of the Company. Any election by Optionee under Section 10(d) above must be made on or prior to the applicable Tax Date.

(f) In the event an election to have Shares withheld is made by Optionee and the Tax Date is deferred under Section 83 of the Code because no election is filed under Section 83(b) of the Code, Optionee shall receive the full number of Shares with respect to which the Option is exercised but such Optionee shall be unconditionally obligated to tender back to the Company the proper number of Shares on the Tax Date.

11. Adjustments Upon Changes in Capitalization, Merger or Certain Other Transactions .

(a) Changes in Capitalization . Subject to any action required under the Applicable Laws by the stockholders of the Company, the number of Shares of Common Stock covered by the Option, as well as the price per Share of Common Stock covered by the Option, shall be proportionately adjusted for any increase or decrease in the number of issued Shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination, recapitalization or reclassification of the Common Stock, or any other increase or decrease in the number of issued Shares of Common Stock effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Plan Administrator, and its determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares of Common Stock subject to an Option.

(b) Dissolution or Liquidation . In the event of the dissolution or liquidation of the Company, the Option will terminate immediately prior to the consummation of such action, unless otherwise determined by the Company, in its sole discretion.

(c) Corporate Transaction . In the event of a Corporate Transaction, each outstanding Option shall be assumed or an equivalent option or right shall be substituted by such successor corporation or a parent or subsidiary of such successor corporation (the “ Successor Corporation ”), unless the Successor Corporation does not agree to assume the award or to substitute an equivalent option or right, in which case such Option shall terminate upon the

 

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consummation of the transaction. If the Option is to be terminated pursuant to the preceding sentence, the Company shall notify Optionee of such fact at least five (5) days prior to the date on which the Option terminates.

For purposes of this Section 11(c), an Option shall be considered assumed, without limitation, if, at the time of issuance of the stock or other consideration upon a Corporate Transaction each holder of an Option would be entitled to receive upon exercise of the award the same number and kind of shares of stock or the same amount of property, cash or securities as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior to such transaction, the holder of the number of Shares of Common Stock covered by the award at such time (after giving effect to any adjustments in the number of Shares covered by the Option as provided for in this Section 11); provided that if such consideration received in the transaction is not solely common stock of the Successor Corporation, the Company may, with the consent of the Successor Corporation, provide for the consideration to be received upon exercise of the award to be solely common stock of the Successor Corporation equal to the Fair Market Value of the per Share consideration received by holders of Common Stock in the transaction,

(d) Certain Distributions . Subject to Section 11(a) hereof, in the event of any distribution to the Company’s stockholders of securities of any other entity or other assets (other than cash dividends) without receipt of consideration by the Company, the Plan Administrator may, in its sole discretion, appropriately adjust the price per Share of Common Stock covered by each outstanding Option to reflect the effect of such distribution.

12. Amendment of Option . In addition to any changes or adjustments that may be made pursuant to Section 11 above, the Company’s Board of Directors shall have the authority to make the following determinations with respect to, and amendments to, the Option without the consent of Optionee: (a) waiver of any restriction applicable to the Option or the Optioned Stock; (b) reduction in the exercise price of the Option to the Fair Market Value of the Company’s Common Stock as of the date of such reduction in price; and (c) any other amendment or adjustment that does not materially and adversely affect Optionee’s rights hereunder.

13. Miscellaneous .

(a) Governing Law . This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.

(b) Entire Agreement; Enforcement of Rights . This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

 

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(c) Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(d) Construction . This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

(e) Notices . Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by telegram or fax or forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written notice.

(f) Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(g) Successors and Assigns . The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Optionee under this Agreement may only be assigned with the prior written consent of the Company.

(h) Accredited Investor . Optionee is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933.

[Signature Page Follows]

 

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This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one document.

 

Mark Zuckerberg

    Facebook, Inc.

/s/ Mark Zuckerberg

    By:  

/s/ David Ebersman

      Name:  

David Ebersman

Date:   6/4/2010     Title:  

CFO

 

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APPENDIX

(a) “ Affiliate ” means an entity other than a Subsidiary (as defined below) which, together with the Company, is under common control of a third person or entity.

(b) “ Applicable Laws ” means the legal requirements relating to the administration of stock option and grants, including under applicable U.S. state corporate laws, U.S. federal and applicable state securities laws, other U.S. federal and state laws, the Code, any Stock Exchange rules or regulations and the applicable laws, rules and regulations of any other country or jurisdiction where the Option is granted under this Agreement, as such laws, rules, regulations and requirements shall be in place from time to time.

(c) “ Board ” means the Board of Directors of the Company.

(d) “ Cause ” means any of the following: (i) an Optionee’s willful failure substantially to perform his or her duties and responsibilities to the Company or deliberate violation of a Company policy; (ii) an Optionee’s commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct that has caused or is reasonably expected to result in material injury to the Company; (iii) unauthorized use or disclosure by the Optionee of any proprietary information or trade secrets of the Company or any other party to whom the Optionee owes an obligation of nondisclosure as a result of his or her relationship with the Company; or (iv) an Optionee’s willful breach of any of his or her obligations under any written agreement or covenant with the Company. The determination as to whether an Optionee is being terminated for Cause shall be made in good faith by the Board and shall be final and binding on the Optionee. The foregoing definition does not in any way limit the Company’s ability to terminate an Optionee’s employment or consulting relationship at any time, and the term “Company” will be interpreted to include any Subsidiary, Parent or Affiliate, as appropriate.

(e) “ Change of Control ” means (i) a sale of all or substantially all of the Company’s assets or (ii) any merger, consolidation or other business combination transaction of the Company with or into another corporation, entity or person, other than a transaction in which the holders of at least a majority of the shares of voting capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by such shares remaining outstanding or by their being converted into shares of voting capital stock of the surviving entity) a majority of the total voting power represented by the shares of voting capital stock of the Company (or the surviving entity) outstanding immediately after such transaction.

(f) “ Code ” means the Internal Revenue Code of 1986, as amended.

(g) “ Common Stock ” means the Common Stock of the Company.

(h) “ Consultant ” means any person, including an advisor, who is engaged by the Company or any Parent, Subsidiary or Affiliate to render services and is compensated for such, services, and any director of the Company whether compensated for such services or not. For the purposes of the Option, a person who is a member of the Company’s Board shall also constitute service as a Consultant during the period of such person’s membership on the Board.


(i) “ Continuous Service Status ” means the absence of any interruption or termination of service as an Employee or Consultant. Continuous Service Status as an Employee or Consultant shall not be considered interrupted in the case of: (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Plan Administrator, provided that such leave is for a period of not more than ninety (90) days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; or (iv) in the case of transfers between locations of the Company or between the Company, its Parents, Subsidiaries, Affiliates or their respective successors. A change in status from an Employee to a Consultant or from a Consultant to an Employee will not constitute an interruption of Continuous Service Status.

(j) “ Corporate Transaction ” means a sale of all or substantially all of the Company’s assets, or a merger, consolidation or other capital reorganization or business combination transaction of the Company with or into another corporation, entity or person, or the direct or indirect acquisition (including by way of a tender or exchange offer) by any person, or persons acting as a group, of beneficial ownership or a right to acquire beneficial ownership of shares representing a majority of the voting power of the then outstanding shares of capital stock of the Company.

(k) “ Director ” means a member of the Board.

(l) “ Disability ” means that Optionee has been unable to perform his duties as the result of his incapacity due to physical or mental illness, and such inability, which continues for at least one hundred and twenty (120) consecutive calendar days or one hundred and fifty (150) calendar days during any consecutive twelve (12) month period, if shorter, after its commencement, is determined to be total and permanent by a physician selected by the Company and its insurers and acceptable to Optionee or to Optionee s legal representative (with such agreement on acceptability not to be unreasonably withheld).

(m) “ Employee ” means any person employed by the Company or any Parent, Subsidiary or Affiliate, with the status of employment determined based upon such factors as are deemed appropriate by the Plan Administrator in its discretion, subject to any requirements of the Code or the Applicable Laws. The payment by the Company of a director’s fee to a Director shall not be sufficient to constitute “employment” of such Director by the Company.

(n) “ Exchange Act ” means the Securities Exchange Act of 1934, as amended.

(o) “ Fair Market Value ” means, as of any date, the fair market value of the Common Stock, as determined by the Plan Administrator in good faith on such basis as it deems appropriate. Whenever possible, the determination of Fair Market Value shall be based upon the closing price for the Shares as reported in the Wall Street Journal for the applicable date.

(p) “ Listed Security ” means any security of the Company that is listed or approved for listing on a national securities exchange or designated or approved for designation as a national market system security on an interdealer quotation system by the National Association of Securities Dealers, Inc.

 

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(q) “ Nonstatutory Stock Option ” means an Option not intended to qualify as an incentive stock option within the meaning of Section 422 of the Code.

(r) “ Option ” means a stock option granted pursuant to this Agreement,

(s) “ Optioned Stock ” means the Common Stock subject to an Option.

(t) “ Parent ” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code, or any successor provision.

(u) “ Plan Administrator ” means the Board or any committee of the Board to whom authority to administer the Plan is validly delegated.

(v) “ Share ” means a share of the Common Stock, as adjusted in accordance with Section 11 of this Agreement.

(w) “ Stock Exchange ” means any stock exchange or consolidated stock price reporting system on which prices for the Common Stock are quoted at any given time.

(x) “ Subsidiary ” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code, or any successor provision.

 

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EXHIBIT A

FACEBOOK, INC.

2005 OFFICERS’ STOCK PLAN

EARLY EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

This Agreement (“ Agreement ”) is made as of              , by and between Facebook, Inc., a Delaware corporation (the “ Company ”), and Mark Zuckerberg (“ Purchaser ”). To the extent any capitalized terms used in this Agreement are not defined, they shall have the meaning ascribed to them in the 2005 Officers’ Stock Plan.

1. Exercise of Option . Subject to the terms and conditions hereof, Purchaser hereby elects to exercise his option to purchase              shares of the Common Stock (the “ Shares ”) of the Company under and pursuant to the Company’s 2005 Officers’ Stock Plan (the “ Plan ”) and the Amended and Restated Stock Option Agreement (the “ Option Agreement ”), granted November 8, 2005. Of these Shares, Purchaser has elected to purchase              of those Shares which have become vested as of the date hereof under the Vesting Schedule set forth in the Notice of Stock Option Grant (the “ Vested Shares ”) and              Shares which have not yet vested under such Vesting Schedule (the “ Unvested Shares ”). The purchase price for the Shares shall be $0.72 per Share for a total purchase price of $              . The term “ Shares ” refers to the purchased Shares and all securities received in replacement of the Shares or as stock dividends or splits, all securities received in replacement of the Shares in a recapitalization, merger, reorganization, exchange or the like, and all new, substituted or additional securities or other properties to which Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

2. Time and Place of Exercise . The purchase and sale of the Shares under this Agreement shall occur at the principal office of the Company simultaneously with the execution and delivery of this Agreement in accordance with the provisions of Section 3(b) of the Option Agreement. On such date, the Company will deliver to Purchaser a certificate representing the Shares to be purchased by Purchaser (which shall be issued in Purchaser’s name) against payment of the exercise price therefor by Purchaser by any method listed in Section 4 of the Option Agreement.

3. Limitations on Transfer . In addition to any other limitation on transfer created by applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in the Shares while the Shares are subject to the Company’s Repurchase Option (as defined below). After any Shares have been released from such Repurchase Option, Purchaser shall not assign, encumber or dispose of any interest in such Shares except in compliance with the provisions below and applicable securities laws.

(a) Repurchase Option .

(i) In the event of the voluntary or involuntary termination of Purchaser’s employment or consulting relationship with the Company for any reason (including death or disability), with or without cause, the Company shall upon the date of such termination (the “ Termination Date ”) have an irrevocable, exclusive option (the “ Repurchase Option ”) for a


period of 90 days from such date to repurchase all or any portion of the Shares held by Purchaser as of the Termination Date which have not yet been released from the Company’s Repurchase Option at the original purchase price per Share specified in Section 1 (adjusted for any stock splits, stock dividends and the like).

(ii) Unless the Company notifies Purchaser within 90 days from the date of termination of Purchaser’s employment or consulting relationship that it does not intend to exercise its Repurchase Option with respect to some or all of the Shares, the Repurchase Option shall be deemed automatically exercised by the Company as of the 90th day following such termination, provided that the Company may notify Purchaser that it is exercising its Repurchase Option as of a date prior to such 90th day. Unless Purchaser is otherwise notified by the Company pursuant to the preceding sentence that the Company does not intend to exercise its Repurchase Option as to some or all of the Shares to which it applies at the time of termination, execution of this Agreement by Purchaser constitutes written notice to Purchaser of the Company’s intention to exercise its Repurchase Option with respect to all Shares to which such Repurchase Option applies. The Company, at its choice, may satisfy its payment obligation to Purchaser with respect to exercise of the Repurchase Option by either (A) delivering a check to Purchaser in the amount of the purchase price for the Shares being repurchased, or (B) in the event Purchaser is indebted to the Company, canceling an amount of such indebtedness equal to the purchase price for the Shares being repurchased, or (C) by a combination of (A) and (B) so that the combined payment and cancellation of indebtedness equals such purchase price. In the event of any deemed automatic exercise of the Repurchase Option pursuant to this Section 3(a)(ii) in which Purchaser is indebted to the Company, such indebtedness equal to the purchase price of the Shares being repurchased shall be deemed automatically canceled as of the 90th day following termination of Purchaser’s employment or consulting relationship unless the Company otherwise satisfies its payment obligations. As a result of any repurchase of Shares pursuant to this Section 3(a), the Company shall become the legal and beneficial owner of the Shares being repurchased and shall have all rights and interest therein or related thereto, and the Company shall have the right to transfer to its own name the number of Shares being repurchased by the Company, without further action by Purchaser.

(iii) One hundred percent (100%) of the Unvested Shares shall initially be subject to the Repurchase Option. The Unvested Shares shall be released from the Repurchase Option in accordance with the Vesting Schedule set forth in the Notice of Stock Option Grant until all Shares are released from the Repurchase Option. Fractional shares shall be rounded to the nearest whole share.

(b) Right of First Refusal . Before any Shares held by Purchaser or any transferee of Purchaser (either being sometimes referred to herein as the “ Holder ”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section 3(b) (the “ Right of First Refusal ”).

(i) Notice of Proposed Transfer . The Holder of the Shares shall deliver to the Company a written notice (the “ Notice ”) stating: (1) the Holder’s bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee (“ Proposed Transferee ”); (iii) the number of Shares to be transferred to each

 

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Proposed Transferee; and (iv) the terms and conditions of each proposed sale or transfer. The Holder shall offer the Shares at the same price (the “ Offered Price ”) and upon the same terms (or terms as similar as reasonably possible) to the Company or its assignee(s).

(ii) Exercise of Right of First Refusal . At any time within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (iii) below.

(iii) Purchase Price . The purchase price (“ Purchase Price ”) for the Shares purchased by the Company or its assignee(s) under this Section 3(b) shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith.

(iv) Payment . Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness, or by any combination thereof within 30 days after receipt of the Notice or in the manner and at the times set forth in the Notice.

(v) Holder’s Right to Transfer . If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section 3(b), then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within 60 days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the provisions of this Section 3 shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, or if the Holder proposes to change the price or other terms to make them more favorable to the Proposed Transferee, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.

(vi) Exception for Certain Family Transfers . Anything to the contrary contained in this Section 3(b) notwithstanding, the transfer of any or all of the Shares during Purchaser’s lifetime or on Purchaser’s death by will or intestacy to Purchaser’s Immediate Family Members or a trust, foundation or other entity for the benefit of Purchaser and/or Purchaser’s Immediate Family Members shall be exempt from the provisions of this Section 3(b). “ Immediate Family Members ” as used herein shall have the meaning ascribed to such term in the Option Agreement. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section, and there shall be no further transfer of such Shares except in accordance with the terms of this Section 3.

 

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(c) Involuntary Transfer .

(i) Company’s Right to Purchase upon Involuntary Transfer . In the event, at any time after the date of this Agreement, of any transfer by operation of law or other involuntary transfer (including death or divorce, but excluding a transfer to Immediate Family as set forth in Section 3(b)(vi) above) of all or a portion of the Shares by the record holder thereof, the Company shall have an option to purchase all of the Shares transferred at the greater of the purchase price paid by Purchaser pursuant to this Agreement or the Fair Market Value of the Shares on the date of transfer. Upon such a transfer, the person acquiring the Shares shall, promptly notify the Secretary of the Company of such transfer. The right to purchase such Shares shall be provided to the Company for a period of thirty (30) days following receipt by the Company of written notice by the person acquiring the Shares.

(ii) Price for Involuntary Transfer . With respect to any stock to be transferred pursuant to Section 3(c)(i), the price per Share shall be a price set by the Board of Directors of the Company that will reflect the current value of the stock in terms of present earnings and future prospects of the Company. The Company shall notify Purchaser or his executor of the price so determined within thirty (30) days after receipt by it of written notice of the transfer or proposed transfer of Shares. However, if the Purchaser does not agree with the valuation as determined by the Board of Directors of the Company, the Purchaser shall be entitled to have the valuation determined by an independent appraiser to be mutually agreed upon by the Company and the Purchaser and whose fees shall be borne equally by the Company and the Purchaser.

(d) Assignment . The right of the Company to purchase any part of the Shares may be assigned in whole or in part to any shareholder or shareholders of the Company or other persons or organizations.

(e) Restrictions Binding on Transferees . All transferees of Shares or any interest therein will receive and hold such Shares or interest subject to the provisions of this Agreement, including, insofar as applicable, the Repurchase Option. In the event of any purchase by the Company hereunder where the Shares or interest are held by a transferee, the transferee shall be obligated, if requested by the Company, to transfer the Shares or interest to the Purchaser for consideration equal to the amount to be paid by the Company hereunder. In the event the Repurchase Option is deemed exercised by the Company pursuant to Section 3(a)(ii) hereof, the Company may deem any transferee to have transferred the Shares or interest to Purchaser prior to their purchase by the Company, and payment of the purchase price by the Company to such transferee shall be deemed to satisfy Purchaser’s obligation to pay such transferee for such Shares or interest, and also to satisfy the Company’s obligation to pay Purchaser for such Shares or interest. Any sale or transfer of the Shares shall be void unless the provisions of this Agreement are satisfied.

(f) Termination of Rights . The right of first refusal granted the Company by Section 3(b) above and the option to repurchase the Shares in the event of an involuntary transfer granted the Company by Section 3(c) above shall terminate upon the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “ Securities Act ”).

 

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4. Escrow of Unvested Shares . For purposes of facilitating the enforcement of the provisions of Section 3 above, Purchaser agrees, immediately upon receipt of the certificate(s) for the Shares subject to the Repurchase Option, to deliver such certificate(s), together with an Assignment-Separate from Certificate in the form attached to this Agreement as Attachment A executed by Purchaser and by Purchaser’s spouse (if required for transfer), in blank, to the Secretary of the Company, or the Secretary’s designee, to hold such certificate(s) and Assignment Separate from Certificate in escrow and to take all such actions and to effectuate all such transfers and/or releases as are in accordance with the terms of this Agreement. Purchaser hereby acknowledges that the Secretary of the Company, or the Secretary’s designee, is so appointed as the escrow holder with the foregoing authorities as a material inducement to make this Agreement and that said appointment is coupled with an interest and is accordingly irrevocable. Purchaser agrees that said escrow holder shall not be liable to any party hereof (or to any other party). The escrow holder may rely upon any letter, notice or other document executed by any signature purported to be genuine and may resign at any time. Purchaser agrees that if the Secretary of the Company, or the Secretary’s designee, resigns as escrow holder for any or no reason, the Board of Directors of the Company shall have the power to appoint a successor to serve as escrow holder pursuant to the terms of this Agreement.

5. Investment and Taxation Representations . In connection with the purchase of the Shares, Purchaser represents to the Company the following:

(a) Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares. Purchaser is purchasing these securities for investment for his own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act or under any applicable provision of state law. Purchaser does not have any present intention to transfer the Shares to any person or entity.

(b) Purchaser understands that the Shares have not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser’s investment intent as expressed herein.

(c) Purchaser further acknowledges and understands that the securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser further acknowledges and understands that the Company is under no obligation to register the securities, Purchaser understands that the certificate(s) evidencing the securities will be imprinted with a legend which prohibits the transfer of the securities unless they are registered or such registration is not required in the opinion of counsel for the Company.

(d) Purchaser is familiar with the provisions of Rules 144 and 701, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer of the securities (or from an

 

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affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions. Purchaser understands that the Company provides no assurances as to whether he will be able to resell any or all of the Shares pursuant to Rule 144 or Rule 701, which rules require, among other things, that the Company be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, that resales of securities take place only after the holder of the Shares has held the Shares for certain specified time periods, and under certain circumstances, that resales of securities be limited in volume and take place only pursuant to brokered transactions. Notwithstanding this paragraph (d), Purchaser acknowledges and agrees to the restrictions set forth in paragraph (e) below.

(e) Purchaser further understands that in the event all of the applicable requirements of Rule 144 or 701 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 or 701 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.

(f) Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

(g) Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933.

6. Restrictive Legends and Stop-Transfer Orders .

(a) Legends . The certificate or certificates representing the Shares shall bear the following legends (as well as any legends required by applicable state and federal corporate and securities laws):

 

  (i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

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  (ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

  (iii) THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A VOTING AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY (A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY) WHICH INCLUDES PROVISIONS POTENTIALLY RESTRICTING THE STOCKHOLDER’S RIGHT TO VOTE OR TRANSFER HIS OR ITS ENTIRE INTEREST IN THE SHARES EVIDENCED HEREBY, AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID VOTING AGREEMENT.

 

  (iv) THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT BY AND BETWEEN THE STOCKHOLDER, THE CORPORATION AND CERTAIN HOLDERS OF COMMON AND PREFERRED STOCK OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION. SUCH RIGHTS OF FIRST REFUSAL AND CO-SALE ARE BINDING ON TRANSFEREES OF THESE SHARES.

(b) Stop-Transfer Notices . Purchaser agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

(c) Refusal to Transfer . The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

7. No Employment Rights . Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a parent or subsidiary of the Company, to terminate Purchaser’s employment or consulting relationship, for any reason, with or without cause.

 

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8. Section 83(b) Election . Purchaser understands that Section 83(a) of the Internal Revenue Code of 1986, as amended (the “ Code ”), taxes as ordinary income for a Nonstatutory Stock Option and as alternative minimum taxable income for an Incentive Stock Option the difference between the amount paid for the Shares and the Fair Market Value of the Shares as of the date any restrictions on the Shares lapse. In this context, “ restriction ” means the right of the Company to buy back the Shares pursuant to the Repurchase Option set forth in Section 3(a) of this Agreement. Purchaser understands that Purchaser may elect to be taxed at the time the Shares are purchased, rather than when and as the Repurchase Option expires, by filing an election under Section 83(b) (an “ 83(b) Election ”) of the Code with the Internal Revenue Service within 30 days from the date of purchase, Even if the Fair Market Value of the Shares at the time of the execution of this Agreement equals the amount paid for the Shares, the election must be made to avoid income and alternative minimum tax treatment under Section 83(a) in the future. Purchaser understands that failure to file such an election in a timely manner may result in adverse tax consequences for Purchaser. Purchaser further understands that an additional copy of such election form should be filed with his federal income tax return for the calendar year in which the date of this Agreement falls. Purchaser acknowledges that the foregoing is only a summary of the effect of United States federal income taxation with respect to purchase of the Shares hereunder, and does not purport to be complete, Purchaser further acknowledges that the Company has directed Purchaser to seek independent advice regarding the applicable provisions of the Code, the income tax laws of any municipality, state or foreign country in which Purchaser may reside, and the tax consequences of Purchaser’s death.

Purchaser agrees that he will execute and deliver to the Company with this executed Agreement a copy of the Acknowledgment and Statement of Decision Regarding Section 83(b) Election (the “ Acknowledgment ”) attached hereto as Attachment B . Purchaser further agrees that he will execute and submit with the Acknowledgment a copy of the 83(b) Election attached hereto as Attachment C (for tax purposes in connection with the early exercise of an option) if Purchaser has indicated in the Acknowledgment his decision to make such an election.

9. Lock-Up Agreement . In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing any underwritten offering of the Company’s securities, Purchaser agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company however or whenever acquired (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days) from, the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the public offering.

10. Miscellaneous .

(a) Governing Law . This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.

 

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(b) Entire Agreement; Enforcement of Rights . This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

(c) Severability . Hone or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

(d) Construction . This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

(e) Notices . Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by telegram or fax or 48 hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written notice.

(f) Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(g) Successors and Assigns . The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Purchaser under this Agreement may only be assigned with the prior written consent of the Company.

[Signature Page Follows]

 

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The parties have executed this Early Exercise Notice and Restricted Stock Purchase Agreement as of the date first set forth above.

 

COMPANY

 

FACEBOOK, INC.

By:  

 

Name:  

 

Title:  

 

 

PURCHASER

MARK ZUCKERBERG

 

(Signature)

Address:  

 

 

 

I,                                          , spouse of Mark Zuckerberg, have read and hereby approve the foregoing Agreement. In consideration of the Company’s granting my spouse the right to purchase the Shares as set forth in the Agreement, I hereby agree to be bound irrevocably by the Agreement and further agree that any community property or other such interest that I may have in the Shares shall hereby be similarly bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement.

 

 

Spouse of Mark Zuckerberg

 

10


ATTACHMENT A

ASSIGNMENT SEPARATE FROM CERTIFICATE

FOR VALUE RECEIVED and pursuant to that certain Early Exercise Notice and Restricted Stock Purchase Agreement between the undersigned (“ Purchaser ”) and Facebook, Inc, (the “ Company ”) dated                      ,          (the “ Agreement ”), Purchaser hereby sells, assigns and transfers unto the Company                                          (              ) shares of the Common Stock of the Company, standing in Purchaser’s name on the books of the Company and represented by Certificate No.      and does hereby irrevocably constitute and appoint                                          to transfer said stock on the books of the Company with full power of substitution in the premises. THIS ASSIGNMENT MAY ONLY BE USED AS AUTHORIZED BY THE AGREEMENT AND THE ATTACHMENTS THERETO.

Dated:                                     

 

Signature:

 

Mark Zuckerberg

 

Spouse of Mark Zuckerberg (if applicable)

Instruction: Please do not fill in any blanks other than the signature line. The purpose of this assignment is to enable the Company to exercise its Repurchase Option set forth in the Agreement without requiring additional signatures on the part of Purchaser.


ATTACHMENT B

ACKNOWLEDGMENT AND STATEMENT OF DECISION

REGARDING SECTION 83(b) ELECTION

The undersigned (which term includes the undersigned’s spouse), a purchaser of shares of Common Stock of Facebook, Inc., a Delaware corporation (the “ Company ”) by exercise of an option (the “ Option ”) granted pursuant to the Company’s 2005 Officers’ Stock Plan (the “ Plan ”), hereby states as follows:

1. The undersigned acknowledges receipt of a copy of the Plan relating to the offering of such shares. The undersigned has carefully reviewed the Plan and the option agreement pursuant to which the Option was granted.

2. The undersigned either [check and complete as applicable]:

 

  (a)          has consulted, and has been fully advised by, the undersigned’s own tax advisor,                                          , whose business address is                              , regarding the federal, state and local tax consequences of purchasing shares under the Plan, and particularly regarding the advisability of making elections pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the “ Code ”) and pursuant to the corresponding provisions, if any, of applicable state law; or

 

  (b)          has knowingly chosen not to consult such a tax advisor.

3. The undersigned hereby states that the undersigned has decided [check as applicable]:

 

  (a)          to make an election pursuant to Section 83(b) of the Code, and is submitting to the Company, together with the undersigned’s executed Early Exercise Notice and Restricted Stock Purchase Agreement, an executed form entitled “Election Under Section 83(b) of the Internal Revenue Code of 1986;” or

 

  (b)          not to make an election pursuant to Section 83(b) of the Code.

4. Neither the Company nor any subsidiary or representative of the Company has made any warranty or representation to the undersigned with respect to the tax consequences of the undersigned’s purchase of shares under the Plan or of the making or failure to make an election pursuant to Section 83(b) of the Code or the corresponding provisions, if any, of applicable state law.

 

Dated:  

                                  

     

 

        Mark Zuckerberg
Dated:  

                                  

     

 

        Spouse of Mark Zuckerberg


ATTACHMENT C

ELECTION UNDER SECTION 83(131

OF THE INTERNAL REVENUE CODE OF 1986

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the Internal Revenue Code, to include in taxpayer’s gross income or alternative minimum taxable income, as applicable, for the current taxable year, the amount of any income that may be taxable to taxpayer in connection with taxpayer’s receipt of the property described below:

1. The name, address, taxpayer identification number and taxable year of the undersigned are as follows:

NAME OF TAXPAYER: Mark Zuckerberg

NAME OF SPOUSE:                                         

ADDRESS:                                                          

IDENTIFICATION NO. OF TAXPAYER:                                         

IDENTIFICATION NO. OF SPOUSE:                                                 

TAXABLE YEAR:                                         

2. The property with respect to which the election is made is described as follows:

                       shares of the Common Stock of Facebook, Inc., a Delaware corporation (the “ Company ”).

3. The date on which the property was transferred is:                                         

4. The property is subject to the following restrictions:                                         

Repurchase option at cost in favor of the Company upon termination of taxpayer’s employment or consulting relationship.

5. The Fair Market Value at the time of transfer, determined without regard to any restriction other than a restriction which by its terms will never lapse, of such property is: $                     

6. The amount (if any) paid for such property: $                     

The undersigned has submitted a copy of this statement to the person for whom the services were performed in connection with the undersigned’s receipt of the above-described property. The transferee of such property is the person performing the services in connection with the transfer of said property.


The undersigned understands that the foregoing election may not be revoked except with the consent of the Commissioner .

 

Dated:  

                                          

     

 

        Mark Zuckerberg
Dated:  

                                          

     

 

        Spouse of Mark Zuckerberg

 

2


RECEIPT AND CONSENT

The undersigned hereby acknowledges receipt of a photocopy of Certificate No.              for              shares of Common Stock of Facebook, Inc. (the “ Company ”).

The undersigned further acknowledges that the Secretary of the Company, or his designee, is acting as escrow holder pursuant to the Early Exercise Notice and Restricted Stock Purchase Agreement Purchaser has previously entered into with the Company. As escrow holder, the Secretary of the Company, or his designee, holds the original of the aforementioned certificate issued in the undersigned’s name.

 

Dated:                                               

 

      Mark Zuckerberg


EXHIBIT B

FACEBOOK, INC.

2005 OFFICERS’ STOCK PLAN

EXERCISE NOTICE AND RESTRICTED STOCK PURCHASE AGREEMENT

This Agreement (“ Agreement ”) is made as of              , by and between Facebook, Inc., a Delaware corporation (the “ Company ”), and Mark Zuckerberg (“ Purchaser ”). To the extent any capitalized terms used in this Agreement are not defined, they shall have the meaning ascribed to them in the 2005 Officers’ Stock Plan.

1. Exercise of Option . Subject to the terms and conditions hereof, Purchaser hereby elects to exercise his option to purchase              shares of the Common Stock (the “ Shares ”) of the Company under and pursuant to the Company’s 2005 Officers’ Stock Plan (the “ Plan ”) and the Amended and Restated Stock Option Agreement (the “ Option Agreement ”), granted November 8, 2005. The purchase price for the Shares shall be $0.72 per Share for a total purchase price of $              . The term “ Shares ” refers to the purchased Shares and all securities received in replacement of the Shares or as stock dividends or splits, all securities received in replacement of the Shares in a ,recapitalization, merger, reorganization, exchange or the like, and all new, substituted or additional securities or other properties to which Purchaser is entitled by reason of Purchaser’s ownership of the Shares.

2. Time and Place of Exercise . The purchase and sale of the Shares under this Agreement shall occur at the principal office of the Company simultaneously with the execution and delivery of this Agreement in accordance with the provisions of Section 3(b) of the Option Agreement. On such date, the Company will deliver to Purchaser a certificate representing the Shares to be purchased by Purchaser (which shall be issued in Purchaser’s name) against payment of the exercise price therefor by Purchaser by any method listed in Section 4 of the Option Agreement.

3. Limitations on Transfer . In addition to any other limitation on transfer created by applicable securities laws, Purchaser shall not assign, encumber or dispose of any interest in the Shares except in compliance with the provisions below and applicable securities laws.

(a) Right of First Refusal . Before any Shares held by Purchaser or any transferee of Purchaser (either being sometimes referred to herein as the “ Holder ”) may be sold or otherwise transferred (including transfer by gift or operation of law), the Company or its assignee(s) shall have a right of first refusal to purchase the Shares on the terms and conditions set forth in this Section 3(a) (the “ Right of First Refusal ”).

(i) Notice of Proposed Transfer . The Holder of the Shares shall deliver to the Company a written notice (the “ Notice ”) stating: (i) the Holder’s bona fide intention to sell or otherwise transfer such Shares; (ii) the name of each proposed purchaser or other transferee (“ Proposed Transferee ”); (iii) the number of Shares to be transferred to each Proposed Transferee; and (iv) the terms and conditions of each proposed sale or transfer. The Holder shall offer the Shares at the same price (the “ Offered Price ”) and upon the same terms (or terms as similar as reasonably possible) to the Company or its assignee(s).


(ii) Exercise of Right of First Refusal . At any time within thirty (30) days after receipt of the Notice, the Company and/or its assignee(s) may, by giving written notice to the Holder, elect to purchase all, but not less than all, of the Shares proposed to be transferred to any one or more of the Proposed Transferees, at the purchase price determined in accordance with subsection (iii) below.

(iii) Purchase Price . The purchase price (“ Purchase Price ”) for the Shares purchased by the Company or its assignee(s) under this Section 3(a) shall be the Offered Price. If the Offered Price includes consideration other than cash, the cash equivalent value of the non-cash consideration shall be determined by the Board of Directors of the Company in good faith.

(iv) Payment . Payment of the Purchase Price shall be made, at the option of the Company or its assignee(s), in cash (by check), by cancellation of all or a portion of any outstanding indebtedness, or by any combination thereof within 30 days after receipt of the Notice or in the manner and at the times set forth in the Notice.

(v) Holder’s Right to Transfer . If all of the Shares proposed in the Notice to be transferred to a given Proposed Transferee are not purchased by the Company and/or its assignee(s) as provided in this Section 3(a), then the Holder may sell or otherwise transfer such Shares to that Proposed Transferee at the Offered Price or at a higher price, provided that such sale or other transfer is consummated within 60 days after the date of the Notice and provided further that any such sale or other transfer is effected in accordance with any applicable securities laws and the Proposed Transferee agrees in writing that the provisions of this Section 3 shall continue to apply to the Shares in the hands of such Proposed Transferee. If the Shares described in the Notice are not transferred to the Proposed Transferee within such period, or if the Holder proposes to change the price or other terms to make them more favorable to the Proposed Transferee, a new Notice shall be given to the Company, and the Company and/or its assignees shall again be offered the Right of First Refusal before any Shares held by the Holder may be sold or otherwise transferred.

(vi) Exception for Certain Family Transfers . Anything to the contrary contained in this Section 3(a) notwithstanding, the transfer of any or all of the Shares during Purchaser’s lifetime or on Purchaser’s death by will or intestacy to Purchaser’s Immediate Family Members or a trust, foundation or other entity for the benefit of Purchaser and/or Purchaser’s Immediate Family Members shall be exempt from the provisions of this Section 3(a). “ Immediate Family Members ” as used herein shall have the meaning ascribed to such term in the Option Agreement. In such case, the transferee or other recipient shall receive and hold the Shares so transferred subject to the provisions of this Section, and there shall be no further transfer of such Shares except in accordance with the terms of this Section 3.

 

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(b) Involuntary Transfer .

(i) Company’s Right to Purchase upon Involuntary Transfer . In the event, at any time after the date of this Agreement, of any transfer by operation of law or other involuntary transfer (including death or divorce, but excluding a transfer to Immediate Family as set forth in Section 3(a)(vi) above) of all or a portion of the Shares-by the record holder thereof, the Company shall have an option to purchase all of the Shares transferred at the greater of the purchase price paid by Purchaser pursuant to this Agreement or the fair market value of the Shares on the date of transfer. Upon such a transfer, the person acquiring the Shares shall promptly notify the Secretary of the Company of such transfer. The right to purchase such Shares shall be provided to the Company for a period of thirty (30) days following receipt by-the Company of written notice by the person acquiring the Shares.

(ii) Price for Involuntary Transfer . With respect to any stock to be transferred pursuant to Section 3(b)(i), the price per Share shall be a price set by the Board of Directors of the Company that will reflect the current value of the stock in terms of present earnings and future prospects of the Company. The Company shall notify Purchaser or his executor of the price so determined within thirty (30) days after receipt by it of written notice of the transfer or proposed transfer of Shares. However, if the Purchaser does not agree with the valuation as determined by the Board of Directors of the Company, the Purchaser shall be entitled to have the valuation determined by an independent appraiser to be mutually agreed upon by the Company and the Purchaser and whose fees shall be borne equally by the Company and the Purchaser.

(c) Assignment . The right of the Company to purchase any part of the Shares may be assigned in whole or in part to any shareholder or shareholders of the Company or other persons or organizations.

(d) Restrictions Binding on Transferees . All transferees of Shares or any interest therein will receive and hold such Shares or interest subject to the provisions of this Agreement. Any sale or transfer of the Company’s Shares shall be void unless the provisions of this Agreement are satisfied.

(e) Termination of Rights . The right of first refusal granted the Company by Section 3(a) above and the option to repurchase the Shares in the event of an involuntary transfer granted the Company by Section 3(b) above shall terminate upon the first sale of Common Stock of the Company to the general public pursuant to a registration statement filed with and declared effective by the Securities and Exchange Commission under the Securities Act of 1933, as amended (the “ Securities Act ”).

4. Investment and Taxation Representations . In connection with the purchase of the Shares, Purchaser represents to the Company the following:

(a) Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the Shares. Purchaser is purchasing these securities for investment for his own account only and not with a view to, or for resale in connection with, any

 

3


“distribution” thereof within the meaning of the Securities Act or under any applicable provision of state law. Purchaser does not have any present intention to transfer the Shares to any person or entity.

(b) Purchaser understands that the Shares have not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser’s investment intent as expressed herein,

(c) Purchaser further acknowledges and understands that the securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser further acknowledges and understands that the Company is under no obligation to register the securities. Purchaser understands that the certificate(s) evidencing the securities will be imprinted with a legend which prohibits the transfer of the securities unless they are registered or such registration is not required in the opinion of counsel for the Company.

(d) Purchaser is familiar with the provisions of Rules 144 and 701, each promulgated under the Securities Act, which, in substance, permit limited public resale of “restricted securities” acquired, directly or indirectly, from the issuer of the securities (or from an affiliate of such issuer), in a non-public offering subject to the satisfaction of certain conditions. Purchaser understands that the Company provides no assurances as to whether he will be able to resell any or all of the Shares pursuant to Rule 144 or Rule 701, which rules require, among other things, that the Company be subject to the reporting requirements of the Securities Exchange Act of 1934, as amended, that resales of securities take place only after the holder of the Shares has held the Shares for certain specified time periods, and under certain circumstances, that resales of securities be limited in volume and take place only pursuant to brokered transactions. Notwithstanding this paragraph (d), Purchaser acknowledges and agrees to the restrictions set forth in paragraph (e) below.

(e) Purchaser further understands that in the event all of the applicable requirements of Rule 144 or 701 are not satisfied, registration under the Securities Act, compliance with Regulation A, or some other registration exemption will be required; and that, notwithstanding the fact that Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and otherwise than pursuant to Rule 144 or 701 will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales, and that such persons and their respective brokers who participate in such transactions do so at their own risk.

(f) Purchaser understands that Purchaser may suffer adverse tax consequences as a result of Purchaser’s purchase or disposition of the Shares. Purchaser represents that Purchaser has consulted any tax consultants Purchaser deems advisable in connection with the purchase or disposition of the Shares and that Purchaser is not relying on the Company for any tax advice.

(g) Purchaser is an accredited investor as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933.

 

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5. Restrictive Legends and Stop-Transfer Orders .

(a) Legends . The certificate or certificates representing the Shares shall bear the following legends (as well as any legends required by applicable state and federal corporate and securities laws):

 

  (i) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE’ OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL FOR THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

  (ii) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

  (iii) THE SHARES EVIDENCED HEREBY ARE SUBJECT TO A VOTING AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN STOCKHOLDERS OF THE COMPANY (A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY) WHICH INCLUDES PROVISIONS POTENTIALLY RESTRICTING THE STOCKHOLDER’S RIGHT TO VOTE OR TRANSFER HIS OR ITS ENTIRE INTEREST IN THE SHARES EVIDENCED HEREBY, AND BY ACCEPTING ANY INTEREST IN SUCH SHARES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID VOTING AGREEMENT.

 

  (iv) THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS OF A CERTAIN RIGHT OF FIRST REFUSAL AND CO-SALE AGREEMENT BY AND BETWEEN THE STOCKHOLDER, THE CORPORATION AND CERTAIN HOLDERS OF COMMON AND PREFERRED STOCK OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION. SUCH RIGHTS OF FIRST REFUSAL AND CO-SALE ARE BINDING ON TRANSFEREES OF THESE SHARES.

 

5


(b) Stop-Transfer Notices . Purchaser agrees that, in order to ensure compliance with the restrictions referred to herein, the Company may issue appropriate “stop transfer” instructions to its transfer agent, if any, and that, if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.

(c) Refusal to Transfer . The Company shall not be required (i) to transfer on its books any Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or pay dividends to any purchaser or other transferee to whom such Shares shall have been so transferred.

6. No Employment Rights . Nothing in this Agreement shall affect in any manner whatsoever the right or power of the Company, or a parent or subsidiary of the Company, to terminate Purchaser’s employment or consulting relationship, for any reason, with or without cause.

7. Lock-Up Agreement . In connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing any underwritten offering of the Company’s securities, Purchaser agrees not to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company however or whenever acquired (other than those included in the registration) without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (not to exceed 180 days) from the effective date of such registration as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters at the time of the public offering.

8. Miscellaneous .

(a) Governing Law . This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law.

(b) Entire Agreement; Enforcement of Rights . This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions between them. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.

(c) Severability . If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.

 

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(d) Construction . This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

(e) Notices . Any notice required or permitted by this Agreement shall be in writing and shall be deemed sufficient when delivered personally or sent by telegram or fax or forty-eight (48) hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, and addressed to the party to be notified at such party’s address as set forth below or as subsequently modified by written notice.

(f) Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

(g) Successors and Assigns . The rights and benefits of this Agreement shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of Purchaser under this Agreement may only be assigned with the prior written consent of the Company.

(h) California Corporate Securities Law . THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.

[ Signature Page Follows ]

 

7


The parties have executed this Exercise Notice and Restricted Stock Purchase Agreement as of the date first set forth above.

 

COMPANY
FACEBOOK, INC.
By:  

 

Name:  

 

Title:  

 

PURCHASER
MARK ZUCKERBERG

 

(Signature)  
Address:  

 

 

 

I,                                          , spouse of Mark Zuckerberg, have read and hereby approve the foregoing Agreement. In consideration of the Company’s granting my spouse the right to purchase the Shares as set forth in the Agreement, I hereby agree to be irrevocably bound by the Agreement and further agree that any community property or other such interest shall hereby by similarly bound by the Agreement. I hereby appoint my spouse as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement.

 

 

Spouse of Mark Zuckerberg

 

8


RECEIPT

The undersigned hereby acknowledges receipt of Certificate No.          for              shares of Common Stock of Facebook, Inc.

 

Dated:                                             

 

      Mark Zuckerberg


RECEIPT

Facebook, Inc. (the “ Company ”) hereby acknowledges receipt of a check in the amount of $              given by Mark Zuckerberg as consideration for Certificate No.          for              shares of Common Stock of the Company.

 

    Facebook, Inc.
Dated:                                            By:  

 

    Name:  

 

      (print)
    Title:  

 

EXHIBIT 10.5

FACEBOOK, INC.

2011 BONUS /RETENTION PLAN

1. Effective Date and Term. This Bonus and Retention Plan (“Plan”) shall be effective as of January 1, 2011, and is effective for calendar year 2011 (the “Eligibility Period”), unless otherwise amended or terminated by Facebook, Inc. (“Facebook” or the “Company”) in accordance with Section 6 of the Plan. The Plan supersedes all prior bonus plans except those set forth in an individual arrangement with an individual employee in which case this Plan shall not apply. Any other such bonus plan is hereby terminated.

2. Administration. The Plan shall be administered by the Compensation Committee of the Board of Directors (the “Plan Administrator”), which shall have the discretionary authority to interpret and administer the Plan and to adopt rules and regulations to implement the Plan, as it deems necessary. In addition, the Plan Administrator hereby delegates to the Company’s CFO and the VP of Human Resources (such individuals, the “Executive Administrators” and together with the Plan Administrator, the “Administrators”) the day-to-day implementation and interpretation of the Plan, including the approval of individual payouts under the Plan to employees other than Facebook’s executive management team, or “mteam.” Notwithstanding the foregoing, the approval of the Plan Administrator or the Company’s Board of Directors shall be required for the approval of the Plan itself and any material amendments to the Plan; determination of the Company’s goals and achievement of those goals under the Plan; approval of the aggregate payout under the Plan; and approval of individual payouts under the Plan to Facebook’s mteam (including any bonus paid to the CEO). Any action that requires the approval of the Executive Administrators must be jointly approved by both the Company’s CFO and the VP of Human Resources, and any action that requires the approval of the Executive Administrators may instead also be approved by the Plan Administrator or the Board of Directors. The decisions of the Administrators are final and binding.

3. Eligibility. Participation in the Plan is limited to Full-Time regular (those regularly scheduled to work an average of 40 or more hours per week) and Part-Time regular (those regularly scheduled to work an average of 32 or more hours per week) Facebook employees 1 who are employed by Facebook on or before December 31, 2011. Participation in the Plan is effective on the later of January 1, 2011 or the day the participant commences as a Full-Time/Part-Time regular employee of Facebook. A participant may be considered ineligible for the Plan at any time and for any reason at the Administrators’ discretion regardless of whether he or she remains an employee of the Company. A participant is not eligible for Plan benefits if the participant resigns or is terminated for “Cause” (which for purposes of the Plan means: any lawful reason) any time before the bonus is paid pursuant to Section 5 below. This Plan is intended to compensate individuals for performance as well as encourage employee retention through and until the date the bonus is paid; retention is therefore a key component of Plan eligibility.

 

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For purposes of this plan, an Employee includes only individuals that the Company treats as an employee for employment tax purposes and workers who are later re-characterized as employee are not eligible.


4. Determination of Amounts. The Administrators may, in their discretion, determine that any participant will be eligible for a semi-annual cash bonus that is paid based on the following formula and definitions.

The Executive Administrators have the sole and absolute discretion to determine the level of achievement and the amounts as described herein (provided that any determinations in respect of Facebook mteam members shall be made by the Plan Administrator):

NON-SALES INCENTIVE PLAN EMPLOYEES:

Base Eligible Earnings x Corporate Bonus Percentage x Individual Performance Percentage x Company Performance Percentage.

SALES INCENTIVE PLAN EMPLOYEES:

Base Eligible Earnings x Corporate Bonus Percentage x (Company Performance Percentage - 100%).

DEFINITIONS:

a) Base Eligible Earnings means the sum of all base wages as determined by the Company (including overtime, retro pay, money paid during a leave of absence by the Company, personal time off (PTO) used during the period and holiday pay as applicable) that Facebook paid the participant during the semi-annual Eligibility Period excluding bonuses, stock gains, commissions, relocation amounts, accrued but unused PTO, expense reimbursements, or benefits.

b) Corporate Bonus Percentage means the percentage of a participant’s Base Annual Wage as established by the Executive Administrators for a participant’s position (provided that the Corporate Bonus Percentage for mteam members shall be established by the Plan Administrator).

c) Individual Performance Percentage is tied to the performance assessments, as determined by the Company, measuring the amount of success a participant has achieved against his or her Individual Performance Objectives for the semi-annual performance period.

d) Company Performance Percentage means the amount of success the Company has achieved against a set of objectives established and determined for the semi-annual performance period in the sole discretion and judgment of the Plan Administrator.

5. Payment of Bonuses. Payment of each semi-annual cash bonus (if any) shall be made by no later than September 15, 2011 for the first semi-annual performance period of the year and March 15, 2011 for the second semi-annual performance period of the year. A participant must be employed by the Company at the time the bonus payment is made in order to receive such payment unless local law or a written agreement between the participant and the Company provides otherwise or the Company terminates the participant without Cause (as defined above) prior to the payment of the bonus. If the Company terminates the participant without Cause prior to the end of a semi-annual performance period, such participant shall receive a bonus based on the participant’s Base Eligible Earnings for the period.


6. Modification or Termination of the Plan. The Company reserves the right to modify, suspend or terminate all or any portion of this Plan at any time, provided that any material modification to the Plan shall be approved by the Plan Administrator. For purposes of clarity and without limitation, should an acquisition or significant business initiative change the operating plan, any applicable performance goals may be modified or eliminated solely by the Plan Administrator.

7. Benefits Unfunded. No amounts awarded or accrued under this Plan will be funded, set aside or otherwise segregated prior to payment. The obligation to pay the bonuses awarded hereunder will at all times be an unfunded and unsecured obligation of the Company. Plan participants will have the status of general creditors and must look solely to the general assets of the Company for the payment of their bonus awards.

8. Benefits Nontransferable. No Plan participant will have the right to alienate, pledge or encumber his or her interest in this Plan, and such interest will not (to the extent permitted by law) be subject in any way to the claims of the participant’s creditors or to attachment, execution or other process of law.

9. No Employment Rights. No action of the Company in establishing the Plan, no action taken under the Plan by the Company or the Administrators and no provision of the Plan itself will be construed to grant any person the right to remain in the employ of the Company or its subsidiaries for any period of specific duration. Rather, each employee is employed “at will,” which means that either the employee or the Company or its subsidiaries may terminate the employment relationship at any time and for any reason, with or without cause.

10. Governing Law. The Plan shall be governed by, and interpreted, construed, and enforced in accordance with, the laws of the State of California without regard to its or any other jurisdiction’s conflicts of laws provisions. For purposes of any dispute that may arise directly or indirectly from this Plan, the parties hereby submit and consent to the exclusive jurisdiction of the State of California and agree that any such litigation shall be conducted only in the courts of California or the federal courts for the United States for the Northern District of California and no other courts.

11. Severability. If any part or section of this Plan is declared invalid by any competent body, the remaining parts not affected by the decision shall continue in effect.

12. Transfers/Job Changes. Subject to the discretion of the Administrators, a participant’s bonus is based upon the participant’s Base Eligible Earnings when: (a) the participant transfers from employment with Facebook to a related company (i.e. a Facebook subsidiary); (b) the participant permanently transfers from a Facebook U.S. location to a Facebook non-U.S. location (or vice versa); (c) the participant transfers from an exempt to a non-exempt position; or (d) a participant is subject to an Individual Bonus Goal change. Employees who leave the Company and are re-hired within the same bonus eligibility period may be eligible to receive a bonus award based solely on the employee’s Base Eligible Earnings received after being re-hired.


13. Code section 409A. Notwithstanding any provision of this Agreement to the contrary, all payments in accordance with this Plan are intended to meet the requirements for the “short-term deferral” exception to Section 409A of the Code, the parties intend to administer this Agreement in a manner that is consistent with those requirements, and this Agreement shall be construed and interpreted in accordance with such intent.

EXHIBIT 10.6

January 27, 2012

Mark Zuckerberg

Facebook, Inc.

1601 Willow Road

Menlo Park, CA 94025

Dear Mark:

This letter agreement amends and restates the employment letter entered into between you and Facebook, Inc. (the “ Company ”), dated May 17, 2005.

You will continue to work at the Company’s Menlo Park office in the role of President and Chief Executive Officer.

1. Compensation .

a. Base Wage . In this position, you will earn a base salary of $500,000 per year. Your wages will be payable in two equal payments per month pursuant to the Company’s regular payroll policy. Your pay will be periodically reviewed as part of the Company’s regular reviews of compensation.

b. Bonus . You may be eligible to receive a semi-annual discretionary bonus of up to a target of 45% of your Base Eligible Earnings as defined in the Company’s bonus plan. Based on your performance, you can over-achieve your bonus target pursuant to the Company’s bonus plan.

c. Equity Awards . The Company acknowledges that it has previously issued equity to you under the Company’s 2005 Officers Stock Plan and common stock purchase agreements. Nothing in this letter agreement will amend or affect the terms of such awards and agreements.

2. Employee Benefits .

a. Paid Time Off . Subject to the Company’s PTO policy, you will be eligible to accrue up to 21 days of PTO per calendar year, pro-rated for the remainder of this calendar year.

b. Group Plans . The Company will provide you with the opportunity to participate in the standard benefits plans currently available to other similarly situated employees, including medical, dental, and vision, subject to any eligibility requirements imposed by such plans.

3. Confidentiality Agreement . By signing this letter agreement, you reaffirm the terms and conditions of the Confidential Information and Invention Assignment Agreement (the “ Confidentiality Agreement ”) by and between you and the Company, dated March 18, 2005.

4. No Conflicting Obligations . You understand and agree that by signing this letter agreement, you represent to the Company that your performance will not breach any other agreement to which you are a party and that you have not, and will not during the term of your employment with the Company, enter into any oral or written agreement in conflict with any of the provisions of this letter or the Company’s policies. You are not to bring with you to the Company, or use or disclose to any person associated with the Company, any confidential or proprietary information belonging to any former employer or other person or entity with respect to which you owe


an obligation of confidentiality under any agreement or otherwise. The Company does not need and will not use such information and we will assist you in any way possible to preserve and protect the confidentiality of proprietary information belonging to third parties. Also, we expect you to abide by any obligations to refrain from soliciting any person employed by or otherwise associated with any former employer and suggest that you refrain from having any contact with such persons until such time as any non-solicitation obligation expires.

5. Outside Activities . While you render services to the Company, you agree that you will not engage in any other employment, consulting or other business activity without the written consent of the Company. In addition, while you render services to the Company, you will not assist any person or entity in competing with the Company, in preparing to compete with the Company or in hiring any employees or consultants of the Company.

6. General Obligations . As an employee, you will be expected to adhere to the Company’s standards of professionalism, loyalty, integrity, honesty, reliability and respect for all. You will also be expected to comply with the Company’s policies and procedures. The Company is an equal opportunity employer.

7. At-Will Employment . Employment with the Company is for no specific period of time. Your employment with the Company will be on an “at will” basis, meaning that either you or the Company may terminate your employment at any time for any reason or no reason. The Company also reserves the right to modify or amend the terms of your employment at any time for any reason. Any contrary representations which may have been made to you are superseded by this letter agreement. This is the full and complete agreement between you and the Company on this term. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at will” nature of your employment may only be changed in an express written agreement approved by the Company’s Board of Directors.

8. Withholdings . All forms of compensation paid to you as an employee of the Company shall be less all applicable withholdings.


This letter agreement supersedes and replaces any prior understandings or agreements, whether oral, written or implied, between you and the Company regarding the matters described in this letter. This letter will be governed by the laws of California, without regard to its conflict of laws provisions.

 

Very truly yours,
FACEBOOK, INC.

/s/ Theodore W. Ullyot            

By: Theodore W. Ullyot
Vice President, General Counsel and Secretary

 

ACCEPTED AND AGREED:
Mark Zuckerberg

/s/ Mark Zuckerberg            

Signature

Jan. 31, 2012

Date

EXHIBIT 10.7

EXECUTION COPY

January 27, 2012

Sheryl Sandberg

Facebook, Inc.

1601 Willow Road

Menlo Park, CA 94025

 

  Re: EMPLOYMENT AGREEMENT

Dear Sheryl:

This letter agreement amends and restates that certain offer letter entered into between you and Facebook, Inc. (the “ Company ”) on February 20, 2008. You began your employment with the Company on March 24, 2008 (your “ Start Date ”). Your continued employment by the Company shall be governed by the following terms and conditions (this “ Agreement ”).

1. Duties and Scope of Employment .

(a) Position . For the term of your employment (your “ Employment ”), the Company agrees to employ you in the position of Chief Operating Officer (“ COO ”). You will report to Mark Zuckerberg and you will be working out of the Company’s office in Menlo Park. You will be responsible for managing sales, business development, marketing, communications and policy, human resources, and user operations. You understand and agree that the Company is a rapidly growing and changing organization and the precise nature of the work you do for the Company as COO may be adjusted from time to time but, in any event, your duties and responsibilities always will be at least commensurate with those duties and responsibilities normally associated with and appropriate for someone in the position of COO.

(b) Obligations to the Company . While you render services to the Company, (1) you may deliver lectures, fulfill speaking engagements and teach at educational institutions provided that such activities do not materially interfere with the performance of your duties to the Company, and (2) you agree that you will not engage in any other employment, consulting, or other business activity except as authorized by the Conflicts Committee or other written consent of the Company. The Company has reviewed the activities that you are conducting at the time of this Agreement and agrees that they, and any substitute activities that are similar in nature and scope, will not significantly interfere with your performance of the responsibilities of your Employment under this Agreement. In addition, while you render services to the Company, you will not assist any person or entity in competing with the Company, in preparing to compete with the Company or in hiring any employees or consultants of the Company. As an employee, you will also be expected to comply with the Company’s policies and procedures.


(c) No Conflicting Obligations . You represent and warrant to the Company that you are under no obligations or commitments, whether contractual or otherwise, that are materially inconsistent with your obligations under this Agreement. In connection with your Employment, you shall not use or disclose any trade secrets or other proprietary information or intellectual property in which you or any other person has any right, title or interest and your Employment will not infringe or violate the rights of any other person. You represent and warrant to the Company that you have returned all property and confidential information belonging to any prior employer, other than confidential information that has become generally known to the public or within the relevant trade industry.

2. Cash and Incentive Compensation .

(a) Salary . The Company shall pay you as compensation for your services a base salary at a gross annual rate of $300,000. Such salary shall be payable in accordance with the Company’s standard payroll procedures.

(b) Bonus . You are eligible to receive a semi-annual discretionary bonus of up to a target of 45 % of your Base Eligible Earnings as defined in the Company’s bonus plan. Based on your performance, you can over-achieve your bonus target pursuant to the Company’s bonus plan.

(c) Restricted Stock Units . The Company has granted you certain restricted stock units (“ RSUs ”) under its 2005 Stock Plan (the “ Plan ”), pursuant to that Notice of RSU Award (Grant Number RS000300) dated August 1, 2008 (your “ RSU Award ”).

3. Vacation/PTO, Employee Benefits and other Incentive Compensation . During your Employment you shall be eligible to accrue paid vacation / paid time off in accordance with the Company’s vacation / paid time off policy, as it may be amended from time to time, and at the rate equal to other similarly situated executives. During your Employment, you shall be eligible to participate in the employee benefit and incentive compensation plans maintained by the Company and generally available to similarly situated employees of the Company, subject in each case to the generally applicable terms and conditions of the plan in question and to the determinations of any person or committee administering such plan.

4. Business Expenses . The Company will reimburse you for your necessary and reasonable business expenses incurred in connection with your duties hereunder upon presentation of an itemized account and appropriate supporting documentation, all in accordance with the Company’s generally applicable policies.

5. Termination .

(a) Employment at Will . Your Employment shall be “at will,” meaning that either you or the Company shall be entitled to terminate your Employment at any time and for any reason, with or without Cause (as defined below). Any contrary representations that may have been made to you shall be superseded by this Agreement. This Agreement shall constitute the full and complete agreement between you and the Company on the “at-will” nature of your Employment, which may only be changed in an express written agreement signed by you and a duly authorized officer of the Company.

 

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(b) Rights Upon Termination . Except as expressly provided in Sections 6 and 9(b), (c) and (d), upon the termination of your Employment, you shall only be entitled to the compensation and benefits earned and the reimbursements described in this Agreement for the period preceding the effective date of the termination.

6. Termination Benefits .

(a) General Release . Any other provision of this Agreement notwithstanding, subsections (b) and (c) below shall not apply unless and until (i) you have executed a full and complete general release of all claims substantially in the form attached hereto as Exhibit A within twenty-one (21) days of your termination (and you do not revoke such general release in accordance with its terms) and (ii) you have returned all Company property (other than property of inconsequential value, but the parties agree that among other things, any property capable of containing the Company’s confidential trade secret or proprietary information is material and must be returned) within twenty-one (21) days of your termination.

(b) Vesting Acceleration . If the Company terminates your Employment for any reason other than Cause, death or Disability, then you shall be eligible to vest in the number of RSUs you would have vested in had your Continuous Service Status (as defined in the Plan) continued for the first half of the months remaining between the date of your termination and the fifth (5th) anniversary of your Start Date. If the Company terminates your Employment as a result of your death or Disability, you will be eligible to vest in the number of additional shares you would have vested in had your Continuous Service Status continued for an additional twelve (12) months from your death or Disability. Any RSUs that are eligible to vest pursuant to this Section 6(b) shall vest upon the later of the date the release of claims described in Section 6(a) becomes effective and the Initial Vesting Event (as defined in your RSU Award). Any RSUs that vest pursuant to this Section 6(b) shall be settled within (30) days following the date of vesting but in no event later than March 15 of the calendar year following the calendar year in which the later of the Initial Vesting Event or your termination of Employment occurs. Any vesting acceleration related to termination of your Employment in connection with a Change of Control will be governed by Section 6(c) of this Agreement and will not result in the vesting acceleration provided for in this subsection.

(c) Change of Control Vesting Acceleration . If you are Involuntarily Terminated by the Company, other than as a result of your death or Disability and within one (1) month prior to or within six (6) months following a Change of Control (as defined in the Plan), then you shall be eligible to receive accelerated vesting of the RSUs so that you will become vested in 100% of the RSUs. Any RSUs that vest pursuant to this Section 6(c) shall vest upon the later of the date the release of claims specified in subsection (a) becomes effective and the Initial Vesting Event. Any RSUs that are eligible to vest pursuant to this Section 6(c) shall be settled within thirty (30) days following the date of vesting but in no event later than March 15 of the calendar year following the calendar year in which the later of the Initial Vesting Event and your Involuntary Termination occurs. Notwithstanding any provision of this Agreement to the contrary, if you sign and do not revoke the release mentioned herein and thereafter file a lawsuit claiming you are entitled to additional RSUs or additional shares of the Company’s common stock, the Company, at its option, may unilaterally cancel any shares of the Company’s common stock that you obtained in connection with the vesting acceleration provided for in this Section 6(c).

 

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Notwithstanding the foregoing, if in connection with a Change of Control, the RSUs are not assumed or substituted for an equivalent award (within the meaning of Section 15(c) of the Plan), then you shall be eligible to receive accelerated vesting of the RSUs effective immediately prior to the Change of Control in accordance with the preceding paragraph. Any such RSUs shall be settled within thirty (30) days following the date of the Change of Control but in no event later than March 15 of the calendar year following the calendar year in which the Change of Control occurs.

(d) Definition of “Cause” . For all purposes under this Agreement, “ Cause ” shall mean a determination by the CEO that any of the following have occurred:

(i) you committed an act of material dishonesty in connection with your responsibilities as an employee;

(ii) you failed to comply with the material terms of any written Company policy or rule as they may be in effect from time to time during your employment and such failure is materially and demonstrably injurious to the Company;

(iii) you breached any material term of this Agreement, of the Confidential Information and Invention Assignment Agreement between you and the Company, or any of other written agreement between you and the Company and such breach is materially and demonstrably injurious to the Company;

(iv) you were convicted of, or entered a plea of guilty or nolo contendere to, a felony or crime of moral turpitude; or

(v) you engaged in gross misconduct or gross neglect of your duties and such misconduct or neglect is materially and demonstrably injurious to the Company.

The cessation of your Employment shall not be deemed to be for Cause unless and until you are sent a written notice of the ground for the termination for “Cause” by the CEO finding that, in the good faith opinion of the CEO, you are guilty of the conduct described above, and specifying the particulars thereof in detail. If the CEO does not deliver to you a notice of termination within ninety (90) days after the later of the date the CEO has knowledge that an event constituting Cause has occurred and, where applicable, the date the CEO has knowledge of the materiality of the injury to the Company, the event will no longer constitute Cause. You will have fifteen (15) days to cure from the date the notice is received by you.

(e) Definition of “Involuntary Termination” . For purposes of this Agreement, “ Involuntary Termination ” shall mean the termination of your Employment with the Company by reason of:

(i) Your involuntary dismissal or discharge by the Company, or by any acquiring or successor entity (or parent or any subsidiary thereof employing you) for reasons other than Cause, or

 

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(ii) Your voluntary resignation after the occurrence of one of the following conditions without your prior written consent: (A) a material diminution in your base salary; (B) a material change in geographic location at which you must perform services (a change in location of your office will be considered material only if it increases your current one-way commute by more than fifty (50) miles); (C) any material failure of the successors to the Company after a Change of Control to perform or cause the Company to perform the obligations of the Company under this Agreement; (D) any action or inaction of the Company that constitutes a material breach of the terms of this Agreement; or (E) any other material adverse change in your duties, authorities or responsibilities as specified in Section l(a), above, in each case, only if you provide notice to the Company of the existence of the applicable condition described in Section 6(e)(ii) within 90 days of the initial existence of the condition, the Company fails to remedy the condition within 30 days thereafter, and within the 30 day period immediately following such failure to remedy, you elect to terminate your Employment. The parties intend that this trigger qualify as an involuntary separation from service trigger under Treasury Regulation Section 1.409A-l(n)(2).

(f) Definition of “Disability” . For all purposes under this Agreement, “ Disability ” shall mean your inability to perform the essential functions of your position with or without reasonable accommodation for a period of 120 consecutive days because of your physical or mental impairment.

7. Confidentiality Agreement . You hereby reaffirm your obligations under the Confidential Information and Invention Assignment Agreement between you and the Company, dated February 20, 2008, a copy of which is attached hereto as Exhibit B (the “Confidentiality Agreement”).

8. Successors .

(a) Company’s Successors . This Agreement shall be binding upon any successor (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets. Any such successor will within a reasonable period of becoming the successor assume in writing and be bound by all of the Company’s obligations under this Agreement. For all purposes under this Agreement, the term “ Company ” shall include any successor to the Company’s business or assets that becomes bound by this Agreement.

(b) Your Successors . This Agreement and all of your rights hereunder shall inure to the benefit of, and be enforceable by, your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

9. Miscellaneous Provisions .

(a) Indemnification . The Company agrees that if you are made a party or threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action brought against you by the Company) by reason of the fact that you are or were an employee of the Company or are or were serving at the request of the Company, as a director, officer, member, employee or agent of another corporation

 

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or a partnership, joint venture, trust or other enterprise, you shall be indemnified by the Company to the fullest extent permitted by applicable law and the Company’s certificate of incorporation and by-laws, as the same exists or may hereafter be amended, against all reasonably and actually incurred legal expenses and related costs incurred or suffered by you in connection therewith provided that you cooperate with the Company in connection with such actual or threatened action, suit, proceeding or investigation, and such indemnification shall continue even if you have ceased to be an officer or are no longer employed by the Company and shall inure to the benefit of your heirs, executors and administrators. The Company shall provide you with directors’ and officers’ liability insurance at least as favorable as the insurance coverage provided to other senior executive officers and directors of the Company respecting liabilities, and reasonable legal fees and costs, charges and expenses incurred or sustained by you (or your legal representative or other successors) in connection with any such proceeding. Unless otherwise provided in an indemnification agreement with the Company, no indemnity shall be paid by the Company (i) if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law; (ii) if it is finally determined that, in connection with the above action, suit or proceeding, that your conduct was finally adjudged to have been knowingly fraudulent, deliberately dishonest or willful; or (iii) if a final decision by a Court having jurisdiction in the matter shall determine that such indemnification is not lawful. Unless otherwise provided in an indemnification agreement with the Company, you agree to reimburse the Company for all reasonable expenses paid by the Company in defending any civil or criminal action suit or proceeding against you in the event and only to the extent that it shall be ultimately determined that you are not entitled to be indemnified by the Company for such expenses under the provisions of applicable law, the Company’s bylaws, this Agreement or otherwise.

(b) Legal Fees . Following a Change of Control only, the Company shall pay the legal fees incurred by you to enforce the terms of this Agreement or to dispute the legality of your termination.

(c) Parachute Payments . If any payment or benefit you would receive pursuant to a Change of Control from the Company or otherwise (“ Payment ”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “ Code ”), and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “ Excise Tax ”), then such Payment shall be reduced to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in your receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount and none of the parachute payments are non-qualified deferred compensation subject to Section 409A of the Code, then the reduction shall occur in the manner you elect in writing prior to the date of payment. If any parachute payment constitutes non-qualified deferred compensation subject to Section 409A or you fail to elect an order, then the reduction shall occur in the following order: first a pro rata reduction of (i) cash payments subject to Section 409A of the Code as non-qualified deferred compensation and (ii) cash payments not subject to Section 409A

 

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of the Code, and second a pro rata cancellation of accelerated vesting of (i) equity-based compensation subject to Section 409A of the Code as non-qualified deferred compensation and (ii) equity-based compensation not subject to Section 409A of the Code with, in each case, the cancellation of accelerated vesting being applied first to vesting that is not subject to Treasury Regulation section 1.280G-1 Q/A 24(c) and subsequently to vesting that is subject to such section, . Reduction in either cash payments or equity compensation benefits shall be made pro rata between and among benefits which are subject to Section 409A of the Code and benefits which are exempt from Section 409A of the Code. The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change of Control shall perform the foregoing calculations. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. Any good faith determination of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and you.

(d) Compliance with Section 409A . You and the Company intend to structure and operate the payments and benefits described in this Agreement, and your other compensation, to be exempt from or to comply with the requirements of Section 409A of the Code to the extent applicable. The Company and you intend that your RSUs and RSU Award have been structured to be exempt from or to comply with the requirements of Section 409A of the Code to the extent applicable. The Company agrees not to take any action (or omit to take any action that is required to be taken) in respect of the RSUs (or any other similar award) that is materially inconsistent with, contrary to or in material breach of the terms of the RSUs (or any similar award), other than as required by applicable law, that causes you to incur tax in respect of a violation of Section 409A of the Code with respect to such RSUs unless you request the action (or omission). For the avoidance of doubt, the Company agrees that any failure to follow the payment terms under the RSUs (or any other similar award granted to you) will be considered a material breach. If you or the Company believes, at any time, that any feature of your compensation or benefits (including your RSUs) does not comply with (or is not exempt from) Section 409A of the Code or that any action taken or contemplated to be taken (including any failure to take action) in regards to your compensation or benefits caused or might cause a violation of Section 409A of the Code, you or the Company will promptly advise the other and will reasonably negotiate in good faith to amend the terms of the payments or benefits or alter the action or contemplated action in order that your payments or benefit arrangements comply with (or are exempt from) the requirements of Section 409A of the Code or in order to mitigate any additional taxes that may apply under Section 409A of the Code if compliance or exemption is not practicable. For the avoidance of doubt, the Company is not responsible for the payment of any taxes, including income and excise taxes, that you may incur under Section 409A of the Code, nor will the Company indemnify you for any such liability, unless the Company breaches a material term of this Agreement or of any compensatory program in which you participate and that breach is the cause of the 409A taxation/penalties. Notwithstanding the foregoing, the Company will indemnify you to the greatest extent that it has indemnified or agrees to indemnify any current or former employee who has incurred or incurs the additional taxes under Section 409A in connection with an RSU or similar type of award due to the same or similar circumstances.

(e) Notice . Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally

 

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delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In your case, mailed notices shall be addressed to you at the home address that you most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.

(f) Modifications and Waivers . No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by you and by an authorized officer of the Company (other than you). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

(g) Whole Agreement . No other agreements, representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof. This Agreement (including, for the avoidance of doubt, its Exhibits) and the Confidentiality Agreement contain the entire understanding of the parties with respect to the subject matter hereof.

(h) Withholding Taxes . All payments made under this Agreement shall be subject to reduction to reflect taxes or other charges required to be withheld by law.

(i) Choice of Law and Severability . This Agreement shall be interpreted in accordance with the laws of the State of California without giving effect to provisions governing the choice of law. If any provision of this Agreement becomes or is deemed invalid, illegal or unenforceable in any applicable jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall be deemed amended to the minimum extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision shall be stricken and the remainder of this Agreement shall continue in full force and effect. If any provision of this Agreement is rendered illegal by any present or future statute, law, ordinance or regulation (collectively, the “ Law ”) then that provision shall be curtailed or limited only to the minimum extent necessary to bring the provision into compliance with the Law. All the other terms and provisions of this Agreement shall continue in full force and effect without impairment or limitation.

(j) No Assignment . This Agreement and all of your rights and obligations hereunder are personal to you and may not be transferred or assigned by you at any time. The Company may assign its rights under this Agreement to any entity that assumes the Company’s obligations hereunder in connection with any sale or transfer of all or a substantial portion of the Company’s assets to such entity.

(k) Authority . The Company represents and warrants that (i) the execution of this Agreement has been duly authorized by the Company, including action of the Board, (ii) the execution, delivery and performance of this Agreement by the Company does not and will not violate any law, regulation, order, judgment or decree or any agreement, plan or corporate

 

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governance document of the Company and (iii) upon the execution and delivery of this Agreement, this Agreement shall be the valid and binding obligation of the Company, enforceable in accordance with its terms, except to the extent enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and by the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).

(l) Counterparts . This Agreement may be executed in two or more counterparts; each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[Signature Page Follows]

 

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To indicate your acceptance of the mutual promises contained in this letter agreement, please sign and date this letter in the space provided below and return it to me.

 

Very truly yours,
FACEBOOK, INC.
By:  

/s/ David Ebersman

  (Signature)
Name:  

David Ebersman

Title:  

Chief Financial Officer

 

ACCEPTED AND AGREED:
SHERYL SANDBERG

/s/ Sheryl Sandberg

(Signature)

 

Date: January 27, 2012

 

Exhibit A:    Form of General Release
Exhibit B:    Confidential Information and Invention Assignment Agreement

 

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EXHIBIT A

FORM OF GENERAL RELEASE


General Release of Claims

This General Release of Claims (this “Release”), dated as of                  , 20      , confirms the following understandings and agreements between Facebook, Inc., a Delaware corporation (the “Company”) and Sheryl Sandberg (hereinafter referred to as “you” or “your”).

In consideration of the promises set forth in that certain employment agreement between you and the Company dated February 20, 2008[, as amended] (the “ Employment Agreement ”) as well as any promises set forth in this Release, you agree as follows:

(1) Opportunity for Review and Revocation. [to be included if employee is age 40 or older]. You have twenty-one (21) days to review and consider this Release. Notwithstanding anything contained herein to the contrary, this Release will not become effective or enforceable for a period of seven (7) calendar days following the date of its execution, during which time you may revoke your acceptance of this Release by notifying the General Counsel of the Company, in writing. To be effective, such revocation must be received by the Company no later than 5:00 p.m. on the seventh (7 th ) calendar day following its execution. Provided that the Release is executed and you do not revoke it, the eighth (8 th ) day following the date on which this Release is executed shall be its effective date (the “ Effective Date ”). In the event of your revocation of this Release pursuant to this Section 1, this Release will be null and void and of no effect, and the Company will have no obligations hereunder.

(2) Employee Release and Waiver of Claims .

(a) Notwithstanding the provisions of section 1542 of the Civil Code of California, and in accordance with Section 2(c) and Section 7(a) of the Employment Agreement, you and your representatives, agents, estate, heirs, successors and assigns, absolutely and unconditionally hereby release, remise, discharge, indemnify and hold harmless the Company Releasees (“ Company Releasees ” defined to include the Company and/or any of its parents, subsidiaries or affiliates, predecessors, successors or assigns, and its and their respective current and/or former partners, directors, shareholders/stockholders, officers, employees, attorneys and/or agents, all both individually and in their official capacities), from any and all legally waivable actions or causes of action, suits, claims, complaints, contracts, liabilities, agreements, promises, contracts, torts, debts, damages, controversies, judgments, rights and demands, whether existing or contingent, known or unknown, suspected or unsuspected, which arise out of your employment with, change in employment status with, and/or separation of employment from, the Company. This release is intended by you to be all encompassing and to act as a full and total release of any legally waivable claims, whether specifically enumerated herein or not, that you may have or have had against the Company Releasees arising from conduct occurring up to and through the date of this Release, including, but not limited to, any legally waivable claims arising from any federal, state or local law, regulation or constitution dealing with either employment, employment benefits or employment discrimination such as those laws or regulations concerning discrimination on the basis of race, color, creed, religion, age, sex, sex harassment, sexual orientation, national origin, ancestry, genetic carrier status, handicap or disability, veteran status, any military service or application for military service, or any other category protected under federal or state law; including any claims or causes of action you have or may have relating to discrimination under federal, state or locate statutes (whether before a


court or an administrative agency) including, but not limited to, the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Employee Retirement Income Security Act of 1974 (excluding all claims for accrued, vested benefits under any employee benefit or pension plan of the Company subject to the terms and conditions of such plan and applicable law), the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act, the National Labor Relations Act, the California Fair Employment and Housing Act, the California Constitution, the California Labor Code, and the California Civil Code, all as amended from time to time; any contract, whether oral or written, express or implied; any tort; any claim for equity or other benefits; or any other statutory and/or common law claim.

(b) You acknowledge that your execution of this Agreement shall be effective as a bar to each and every claim specified in Sections 4(a) and 5 of this Agreement. Accordingly, you hereby expressly waive any and all rights and benefits conferred upon you by the provisions of Section 1542 of the California Civil Code and expressly consent that this Agreement shall be given full force and effect with respect to each and all of its express terms and provisions, including those related to unknown and/or unsuspected claims, if any, as well as those relating to any other claims specified in Sections 4(a) and 5 of this Agreement. Section 1542 provides as follows:

“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

You further represent that you understand and acknowledge the significance and consequence of such release as well as the specific waiver of Section 1542.

(c) This Release does not include any claim which, as a matter of law, cannot be released by private agreement. Nor does this Release prohibit or bar you from providing truthful testimony in any legal proceeding or from cooperating with, or making truthful disclosures to, any governmental agency. Notwithstanding the foregoing, with respect to any claim that cannot be released by private agreement, you agree to release and waive your right (if any) to any monetary damages or other recovery as to such claims, including any claims brought on your behalf, either individually or as part of a collective action, by any governmental agency or other third party.

(d) Notwithstanding any provision of this Release to the contrary, by executing this Release, you are not releasing any claims relating to (i) your rights or any other benefits expressly provided under the Employment Agreement including, but not limited to, those provided for in Sections 11(b), 11(c) and 11(d), (ii) any rights relating to the restricted stock units (the “ RSUs ”) granted to you pursuant to the Employment Agreement or otherwise or any rights relating to any other outstanding equity awards or (iii) any indemnification or similar rights you may have as a current or former officer or director of the Company, including, without limitation, any and all rights thereto referenced in the Employment Agreement, the Company’s bylaws, plan of reorganization or liquidation, other governance documents, or any rights with respect to the Company’s directors’ and officers’ insurance policies.

 

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(3) Company Release and Waiver of Claims . The Company covenants that, except for any claim that could be asserted by the Company or its shareholders against you (1) for fraud, breach of fiduciary duty, embezzlement, breach of trust, theft, violation of state or federal securities laws, conversion, misuse or unauthorized disclosure of the Company’s confidential, proprietary or trade secret information; (2) brought to enforce the terms and provisions of this Release or the Employment Agreement (including the Exhibits thereto); or (3) based upon a claim that conduct in which you engaged constituted grounds for termination of your employment for “Cause”, as defined in the Employment Agreement, it hereby waives any non-excluded claims and releases you from such non-excluded claims.

(4) No Suit . You represent that you have not filed any complaints or charges against the Company with any federal, state, or local administrative agency arising out of your employment with the Company on or prior to the Effective Date.

(5) Prior Agreement . You understand and agree that you have continuing obligations under the Confidential Information and Inventions Assignment Agreement between you and the Company dated as of February 20, 2008 (hereinafter, the “ CIIAA ”). A copy of the CIIAA is attached hereto as Exhibit A and incorporated herein by reference. You reaffirm your commitment under the CIIAA in this Release, and agree that, as part of this Release, you will comply fully with the terms of the CIIAA. You also confirm that you have not violated the CIIAA.

(6) Restricted Stock Units . The Company previously granted you RSUs under the Company’s 2005 Stock Plan (the “ Stock Plan ”). Pursuant to the Employment Agreement, as of the Effective Date you will be vested in [NUMBER] of the RSUs. All of your rights and obligations with respect to the RSUs are governed by the terms and conditions of the Restricted Stock Unit Agreement.

(7) Confidentiality . You agree that you will not disclose to others the fact or terms of this Release, except that you may disclose such information to your attorney or accountant in order for such individuals to render services to you.

(8) Successors and Assigns . The provisions hereof shall inure to the benefit of your heirs, executors, administrators, legal personal representatives and assigns and shall be binding upon your heirs, executors, administrators, legal personal representatives and assigns.

(9) Severability . If any provision of this Release, or part thereof, is held invalid, void or voidable as against public policy or otherwise, the invalidity shall not affect other provisions, or parts thereof, which may be given effect without the invalid provision or part. To this extent, the provisions and parts thereof of this Release are declared to be severable. Any waiver of any provision of this Release shall not constitute a waiver of any other provision of this Release unless expressly so indicated otherwise. The language of all parts of this Release shall in all cases be construed according to its fair meaning and not strictly for or against either of the parties.

(10) Governing Law . Any claims arising out of this Release (or any other claims arising out of the relationship between the parties) shall be governed by and construed in

 

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accordance with the laws of the state of California and shall in all respects be interpreted, enforced and governed under the internal and domestic laws of California, without giving effect to the principles of conflicts of laws of such state. Any claims or legal actions by one party against the other shall be commenced and maintained in a court of competent jurisdiction in Santa Clara County, California, and you hereby submit to the jurisdiction and venue of any such court.

(11) Counterparts . This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument.

(12) This Agreement shall not be construed as an admission by you or the Company of any wrongful act, unlawful discrimination, or breach of contract.

IN WITNESS WHEREOF, the undersigned parties have executed this Release as of the date first written above.

 

By:  

/s/ Mark Zuckerberg

  Name: Mark Zuckerberg
  Facebook, Inc.
By:  

/s/ Sheryl Sandberg

  Name: Sheryl Sandberg

I REPRESENT THAT I HAVE READ THE FOREGOING RELEASE, THAT I FULLY UNDERSTAND THE TERMS AND CONDITIONS OF SUCH RELEASE AND THAT I AM KNOWINGLY AND VOLUNTARILY EXECUTING THE SAME WITHOUT DURESS OR COERCION FROM ANY SOURCE. IN ENTERING INTO THIS RELEASE, I DO NOT RELY ON ANY REPRESENTATION, PROMISE OR INDUCEMENT MADE BY THE COMPANY OR ITS REPRESENTATIVES WITH THE EXCEPTION OF THE CONSIDERATION DESCRIBED IN THIS DOCUMENT.

 

By:  

/s/ Sheryl Sandberg

  Name: Sheryl Sandberg

 

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EXHIBIT B

CONFIDENTIAL INFORMATION AND

INVENTION ASSIGNMENT AGREEMENT


EXECUTION COPY

 

FACEBOOK, INC.

CONFIDENTIAL INFORMATION AND

INVENTION ASSIGNMENT AGREEMENT

FOR EMPLOYEES

As a condition of my becoming employed (or my employment being continued) by or retained as a consultant (or my consulting relationship being continued) by Facebook, Inc., a Delaware corporation (“ Facebook ”) or any of its current or future subsidiaries, affiliates, successors or assigns (collectively, the “ Company ”), and in consideration of my employment or consulting relationship with the Company and my receipt of the compensation now and hereafter paid to me by the Company, I agree to the following:

1. Employment or Consulting Relationship . I understand and acknowledge that this Agreement does not alter, amend or expand upon any rights I may have to continue in the employ of, or in a consulting relationship with, or the duration of my employment or consulting relationship with, the Company under any existing agreements between the Company and me or under applicable law. Any employment or consulting relationship between the Company and me, whether commenced prior to or upon or after the date of this Agreement, shall be referred to herein as the “ Relationship .”

2. At-Will Relationship . I understand and acknowledge that my Relationship with the Company is and shall continue to be at-will, as defined under applicable law, meaning that either I or the Company may terminate the Relationship at any time for any reason or no reason, without further obligation or liability, except as set forth in the employment agreement between me and the Company, dated February 20, 2008.

3. Confidential Information .

(a) Company Information . I agree at all times during the term of my Relationship with the Company and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company to the extent necessary to perform my obligations to the Company under the Relationship, or to disclose to any person, firm, corporation or other entity without written authorization of the Board of Directors of the Company, any Confidential Information of the Company which I obtain or create. I further agree not to make copies of such Confidential Information except as authorized by the Company. I understand that “ Confidential Information ” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, suppliers, customer lists and customers (including, but not limited to, customers of the Company on whom I called or with whom I became acquainted during the Relationship), prices and costs, markets, software, developments, inventions, laboratory notebooks, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, marketing, licenses, finances, budgets or other business information disclosed to me by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment or created by me during the period of the Relationship, whether or not during working hours. I understand that Confidential Information includes, but is not limited to, information pertaining to any aspect of


the Company’s business, which is either information not known by actual or potential competitors of the Company or other third parties not under confidentiality obligations to the Company, or is otherwise proprietary information of the Company or its customers or suppliers, whether of a technical nature or otherwise. I further understand that Confidential Information does not include any of the foregoing items which has become publicly and widely known and made generally available through no wrongful act of mine or of others who were under confidentiality obligations as to the item or items involved.

(b) Prior Obligations . I represent that my performance of all terms of this Agreement as an employee or consultant of the Company has not breached and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by me prior or subsequent to the commencement of my Relationship with the Company, and I will not disclose to the Company or use any inventions, confidential or non-public proprietary information or material belonging to any current or former client or employer or any other party. I will not induce the Company to use any inventions, confidential or non-public proprietary information, or material belonging to any current or former client or employer or any other party. I acknowledge and agree that I have listed on Exhibit A all agreements (e.g., non-competition agreements, non-solicitation of customers agreements, non-solicitation of employees agreements, confidentiality agreements, inventions agreements, etc.) with a current or former employer, or any other person or entity, that may restrict my ability to accept employment with the Company or my ability as an employee or consultant to recruit or engage customers or service providers on behalf of the Company, or otherwise relate to or restrict my ability to perform my duties as an employee of the Company or any obligation I may have to the Company.

(c) Third Party Information . I recognize that the Company has received and in the future will receive confidential or proprietary information from third parties subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. I agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the Company consistent with the Company’s agreement with such third party.

4. Inventions .

(a) Inventions Retained and Licensed . I have attached hereto, as Exhibit A , a list describing with particularity all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to the commencement of the Relationship (collectively referred to as “ Prior Inventions ”), which belong solely to me or belong to me jointly with another, which relate in any way to any of the Company’s proposed businesses, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, I represent that there are no such Prior Inventions. If, in the course of my Relationship with the Company, I incorporate into a Company product, process or machine a Prior Invention owned by me or in which I have an interest, the Company is hereby granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual, worldwide license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell and otherwise distribute such Prior Invention as part of or in connection with such product, process or machine.

 

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(b) Assignment of Inventions . I agree that I will promptly make full written disclosure to Facebook, will hold in trust for the sole right and benefit of Facebook, and hereby assign to Facebook, or its designee, all my right, title and interest throughout the world in and to any and all inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of my Relationship with the Company (collectively referred to as “ Inventions ”), except as provided in Section 4(e) below. I further acknowledge that all Inventions which are made by me (solely or jointly with others) within the scope of and during the period of my Relationship with the Company are “ works made for hire ” (to the greatest extent permitted by applicable law) and are compensated by my salary (if I am an employee) or by such amounts paid to me under any applicable consulting agreement or consulting arrangements (if I am a consultant), unless regulated otherwise by the mandatory law of the state of California.

(c) Maintenance of Records . I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my Relationship with the Company. The records may be in the form of notes, sketches, drawings, flow charts, electronic data or recordings, laboratory notebooks, and any other format. The records will be available to and remain the sole property of the Company at all times. I agree not to remove such records from the Company’s place of business except as expressly permitted by Company policy which may, from time to time, be revised at the sole election of the Company for the purpose of furthering the Company’s business. I agree to return all such records (including all copies thereof) to Facebook at the time of termination of my Relationship with the Company as provided for in Section 5.

(d) Patent and Copyright Rights . I agree to assist Facebook, or its designee, at its expense, in every proper way to secure Facebook’s, or its designee’s, rights in the Inventions and any copyrights, patents, trademarks, mask work rights, moral rights, or other intellectual property rights relating thereto in any and all countries, including the disclosure to Facebook or its designee of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, recordations, and all other instruments which Facebook or its designee shall deem necessary in order to apply for, obtain, maintain and transfer such rights, or if not transferable, waive such rights, and in order to assign and convey to Facebook or its designee, and any successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement until the expiration of the last such intellectual property right to expire in any country of the world. If Facebook or its designee is unable because of my mental or physical incapacity or unavailability or for any other reason to secure my signature to apply for or to pursue any application for any United States or foreign patents, copyright, mask works or other registrations covering Inventions or original works of authorship assigned to Facebook or its designee as above, then I hereby irrevocably designate and appoint Facebook and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance or transfer of

 

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letters patent, copyright or other registrations thereon with the same legal force and effect as if originally executed by me. I hereby waive and irrevocably quitclaim to Facebook or its designee any and all claims, of any nature whatsoever, which I now or hereafter have for infringement of any and all proprietary rights assigned to Facebook or such designee.

(e) Exception to Assignments . I understand that the provisions of this Agreement requiring assignment of Inventions to Facebook do not apply to any invention which qualifies fully under the provisions of California Labor Code Section 2870 (attached hereto as Exhibit B ). I will advise the Company promptly in writing of any inventions that I believe meet such provisions and are not otherwise disclosed on Exhibit A .

5. Company Property; Returning Company Documents . I acknowledge and agree that I have no expectation of privacy with respect to the Company’s telecommunications, networking or information processing systems (including, without limitation, stored company files, e-mail messages and voice messages) and that my activity and any files or messages on or using any of those systems may be monitored at any time without notice. I further agree that any property situated on the Company’s premises and owned by the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice. I agree that, at the time of termination of my Relationship with the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, materials, flow charts, equipment, other documents or property, or reproductions of any of the aforementioned items developed by me pursuant to the Relationship or otherwise belonging to the Company, its successors or assigns. In the event of the termination of the Relationship, I agree to sign and deliver the “ Termination Certification ” attached hereto as Exhibit C ; however, my failure to sign and deliver the Termination Certificate shall in no way diminish my continuing obligations under this Agreement.

6. Notification to Other Parties .

(a) Employees . In the event that I leave the employ of the Company, I hereby consent to notification by the Company to my new employer about my rights and obligations under this Agreement.

(b) Consultants . I hereby grant consent to notification by the Company to any other parties besides the Company with whom I maintain a consulting relationship, including parties with whom such relationship commences after the effective date of this Agreement, about my rights and obligations under this Agreement.

7. Solicitation of Employees, Consultants and Other Parties . I agree that during the term of my Relationship with the Company, and for a period of twenty-four (24) months immediately following the termination of my Relationship with the Company for any reason, whether with or without cause, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees or consultants to terminate their relationship with the Company, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Company, either for myself or for any other person or entity. Further, during

 

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my Relationship with the Company and at any time following termination of my Relationship with the Company for any reason, with or without cause, I shall not use any Confidential Information of the Company to attempt to negatively influence any of the Company’s clients or customers from purchasing Company products or services or to solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct his or its purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Company.

8. Representations and Covenants .

(a) Facilitation of Agreement . I agree to execute promptly any proper oath or verify any proper document required to carry out the terms of this Agreement upon the Company’s written request to do so.

(b) Conflicts . I represent that my performance of all the terms of this Agreement does not and will not breach any agreement I have entered into, or will enter into with any third party, including without limitation any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to commencement of my Relationship with the Company. I agree not to enter into any written or oral agreement that conflicts with the provisions of this Agreement.

(c) Voluntary Execution . I certify and acknowledge that I have carefully read all of the provisions of this Agreement and that I understand and will fully and faithfully comply with such provisions.

9. General Provisions .

(a) Governing Law . The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws.

(b) Entire Agreement . This Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all prior discussions between us. No modification or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing signed by both parties. Any subsequent change or changes in my duties, obligations, rights or compensation will not affect the validity or scope of this Agreement.

(c) Severability . If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

(d) Successors and Assigns . This Agreement will be binding upon my heirs, executors, administrators and other legal representatives, and my successors and assigns, and will be for the benefit of the Company, its successors, and its assigns.

(e) Survival . The provisions of this Agreement shall survive the termination of the Relationship and the assignment of this Agreement by the Company to any successor in interest or other assignee.

 

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(f) Remedies . I acknowledge and agree that violation of this Agreement by me may cause the Company irreparable harm, and therefore agree that the Company will be entitled to seek extraordinary relief in court, including but not limited to temporary restraining orders, preliminary injunctions and permanent injunctions without the necessity of posting a bond or other security and in addition to and without prejudice to any other rights or remedies that the Company may have for a breach of this Agreement.

(g) ADVICE OF COUNSEL . I ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, I HAVE HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND I HAVE READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

[Signature Page Follows]

 

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The parties have executed this Agreement on the respective dates set forth below:

 

COMPANY:     EMPLOYEE:
FACEBOOK, INC.                              , an Individual:
By:  

/s/ Mark Zuckerberg

     
Name:  

Mark Zuckerberg

   

/s/ Sheryl Sandberg

      Signature
Title:  

CEO

     
Date:  

Feb. 20, 2008

    Date:  

2/20/08

 

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EXHIBIT A

LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP

EXCLUDED UNDER SECTION 5

 

Title

  

Date

  

Identifying Number

or Brief Description

     No inventions or improvements

     Additional Sheets Attached

 

Signature of Employee/Consultant:   

/s/ Sheryl Sandberg

  
Print Name of Employee/Consultant:   

Sheryl Sandberg

  
Date:   

2/20/08

  


EXHIBIT B

Section 2870 of the California Labor Code is as follows:

(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

(2) Result from any work performed by the employee for the employer.

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.


EXHIBIT C

TERMINATION CERTIFICATION

This is to certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, flow charts, materials, equipment, other documents or property, or copies or reproductions of any aforementioned items belonging to Facebook, Inc., its subsidiaries, affiliates, successors or assigns (together the “ Company ”).

I further certify that I have complied with all the terms of the Company’s Confidential Information and Invention Assignment Agreement signed by me, including the reporting of any inventions and original works of authorship (as defined therein), conceived or made by me (solely or jointly with others) covered by that agreement.

I further agree that, in compliance with the Confidential Information and Invention Assignment Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business plans, financial information or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants or licensees.

I further agree that for twenty-four (24) months from the date of this Certificate, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees or consultants to terminate their relationship with the Company, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Company, either for myself or for any other person or entity. Further, I shall not at any time use any Confidential Information of the Company to negatively influence any of the Company’s clients or customers from purchasing Company products or services or to solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct his or its purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Company.

 

Date:     

 

 

(Employee’s Signature)

 

(Type/Print Employee’s Name)

EXHIBIT 10.8

January 27, 2012

David Ebersman

Facebook, Inc.

1601 Willow Road

Menlo Park, CA 94025

Dear David:

This letter agreement amends and restates the offer letter entered into between you and Facebook, Inc. (the “ Company ”), dated September 9, 2009.

You will continue to work at the Company’s Menlo Park office in the role of Chief Financial Officer, reporting to Mark Zuckerberg.

1. Compensation .

a. Base Wage . In this position, you will earn a base salary of $300,000 per year. Your wages will be payable in two equal payments per month pursuant to the Company’s regular payroll policy. Your pay will be periodically reviewed as a part of the Company’s regular reviews of compensation.

b. Bonus . You may be eligible to receive a semi-annual discretionary bonus of up to a target of 45% of your Base Eligible Earnings as defined in the Company’s bonus plan. Based on your performance, you can over-achieve your bonus target pursuant to the Company’s bonus plan.

c. Equity Awards . The Company acknowledges that it has previously issued equity awards to you under the Company’s 2005 Stock Plan. Nothing in this letter agreement will amend or affect the terms of such awards.

2. Employee Benefits .

a. Paid Time Off . Subject to the Company’s PTO policy, you will be eligible to accrue up to 21 days of PTO per calendar year, pro-rated for the remainder of this calendar year.

b. Group Plans . The Company will provide you with the opportunity to participate in the standard benefits plans currently available to other similarly situated employees, including medical, dental, and vision, subject to any eligibility requirements imposed by such plans.

3. Confidentiality Agreement . By signing this letter agreement, you reaffirm the terms and conditions of the Confidential Information and Invention Assignment Agreement (the “ Confidentiality Agreement ”) by and between you and the Company, dated September 9, 2009.

4. No Conflicting Obligations . You understand and agree that by signing this letter agreement, you represent to the Company that your performance will not breach any other agreement to which you are a party and that you have not, and will not during the term of your employment with the Company, enter into any oral or written agreement in conflict with any of the provisions of this letter or the Company’s policies. You are not to bring with you to the Company, or use or disclose to any person associated with the Company, any confidential or proprietary information belonging to any former employer or other person or entity with respect to which you owe


an obligation of confidentiality under any agreement or otherwise. The Company does not need and will not use such information and we will assist you in any way possible to preserve and protect the confidentiality of proprietary information belonging to third parties. Also, we expect you to abide by any obligations to refrain from soliciting any person employed by or otherwise associated with any former employer and suggest that you refrain from having any contact with such persons until such time as any non-solicitation obligation expires.

5. Outside Activities . While you render services to the Company, you agree that you will not engage in any other employment, consulting or other business activity without the written consent of the Company. In addition, while you render services to the Company, you will not assist any person or entity in competing with the Company, in preparing to compete with the Company or in hiring any employees or consultants of the Company.

6. General Obligations . As an employee, you will be expected to adhere to the Company’s standards of professionalism, loyalty, integrity, honesty, reliability and respect for all. You will also be expected to comply with the Company’s policies and procedures. The Company is an equal opportunity employer.

7. At-Will Employment . Employment with the Company is for no specific period of time. Your employment with the Company will be on an “at will” basis, meaning that either you or the Company may terminate your employment at any time for any reason or no reason. The Company also reserves the right to modify or amend the terms of your employment at any time for any reason. Any contrary representations which may have been made to you are superseded by this letter agreement. This is the full and complete agreement between you and the Company on this term. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at will” nature of your employment may only be changed in an express written agreement signed by you and the Company’s Chief Executive Officer.

8. Withholdings . All forms of compensation paid to you as an employee of the Company shall be less all applicable withholdings.


This letter agreement supersedes and replaces any prior understandings or agreements, whether oral, written or implied, between you and the Company regarding the matters described in this letter. This letter will be governed by the laws of California, without regard to its conflict of laws provisions.

 

Very truly yours,
FACEBOOK, INC.

/s/ Theodore W. Ullyot

By: Theodore W. Ullyot
Vice President, General Counsel and Secretary

 

ACCEPTED AND AGREED:
David Ebersman

/s/ David Ebersman

Signature

Jan. 29, 2012

Date

EXHIBIT 10.9

January 27, 2012

Mike Schroepfer

Facebook, Inc.

1601 Willow Road

Menlo Park, CA 94025

Dear Mike:

This letter agreement amends and restates the offer letter entered into between you and Facebook, Inc. (the “ Company ”), dated August 6, 2008.

You will continue to work at the Company’s Menlo Park office in the role of Vice President of Engineering, reporting to Mark Zuckerberg.

1. Compensation .

a. Base Wage . In this position, you will earn a base salary of $275,000 per year. Your wages will be payable in two equal payments per month pursuant to the Company’s regular payroll policy. Your pay will be periodically reviewed as a part of the Company’s regular reviews of compensation.

b. Bonus . You may be eligible to receive a semi-annual discretionary bonus of up to a target of 45% of your Base Eligible Earnings as defined in the Company’s bonus plan. Based on your performance, you can over-achieve your bonus target pursuant to the Company’s bonus plan.

c. Equity Awards . The Company acknowledges that it has previously issued equity awards to you under the Company’s 2005 Stock Plan. Nothing in this letter agreement will amend or affect the terms of such awards.

2. Employee Benefits .

a. Paid Time Off . Subject to the Company’s PTO policy, you will be eligible to accrue up to 21 days of PTO per calendar year, pro-rated for the remainder of this calendar year.

b. Group Plans . The Company will provide you with the opportunity to participate in the standard benefits plans currently available to other similarly situated employees, including medical, dental, and vision, subject to any eligibility requirements imposed by such plans.

3. Confidentiality Agreement . By signing this letter agreement, you reaffirm the terms and conditions of the Confidential Information and Invention Assignment Agreement (the “ Confidentiality Agreement ”) by and between you and the Company, dated October 3, 2008.

4. No Conflicting Obligations . You understand and agree that by accepting this letter agreement, you represent to the Company that your performance will not breach any other agreement to which you are a party and that you have not, and will not during the term of your employment with the Company, enter into any oral or written agreement in conflict with any of the provisions of this letter or the Company’s policies. You are not to bring with you to the Company, or use or disclose to any person associated with the Company, any confidential or


proprietary information belonging to any former employer or other person or entity with respect to which you owe an obligation of confidentiality under any agreement or otherwise. The Company does not need and will not use such information and we will assist you in any way possible to preserve and protect the confidentiality of proprietary information belonging to third parties. Also, we expect you to abide by any obligations to refrain from soliciting any person employed by or otherwise associated with any former employer and suggest that you refrain from having any contact with such persons until such time as any non-solicitation obligation expires.

5. Outside Activities . While you render services to the Company, you agree that you will not engage in any other employment, consulting or other business activity without the written consent of the Company. In addition, while you render services to the Company, you will not assist any person or entity in competing with the Company, in preparing to compete with the Company or in hiring any employees or consultants of the Company.

6. General Obligations . As an employee, you will be expected to adhere to the Company’s standards of professionalism, loyalty, integrity, honesty, reliability and respect for all. You will also be expected to comply with the Company’s policies and procedures. The Company is an equal opportunity employer.

7. At-Will Employment . Employment with the Company is for no specific period of time. Your employment with the Company will be on an “at will” basis, meaning that either you or the Company may terminate your employment at any time for any reason or no reason. The Company also reserves the right to modify or amend the terms of your employment at any time for any reason. Any contrary representations which may have been made to you are superseded by this letter agreement. This is the full and complete agreement between you and the Company on this term. Although your job duties, title, compensation and benefits, as well as the Company’s personnel policies and procedures, may change from time to time, the “at will” nature of your employment may only be changed in an express written agreement signed by you and the Company’s Chief Executive Officer.

8. Withholdings . All forms of compensation paid to you as an employee of the Company shall be less all applicable withholdings.


This letter agreement supersedes and replaces any prior understandings or agreements, whether oral, written or implied, between you and the Company regarding the matters described in this letter. This letter will be governed by the laws of California, without regard to its conflict of laws provisions.

 

Very truly yours,
FACEBOOK, INC.

/s/ Theodore W. Ullyot

By: Theodore W. Ullyot
Vice President, General Counsel and Secretary

 

ACCEPTED AND AGREED:
Mike Schroepfer

/s/ Mike Schroepfer

Signature

Jan. 30, 2012

Date

EXHIBIT 10.10

January 27, 2012

Mr. Theodore W. Ullyot

Facebook, Inc.

1601 Willow Road

Menlo Park, CA 94025

 

       EMPLOYMENT AGREEMENT

Dear Ted:

This letter agreement amends and restates that certain offer letter entered into between you and Facebook, Inc. (the “ Company ”) on September 24, 2008. You began your employment with the Company on October 20, 2008 (your “ Start Date ”). Your continued employment by the Company shall be governed by the following terms and conditions (this “ Agreement ”).

1. Duties and Scope of Employment .

(a) Position . The Company agrees to employ you in the position of Vice President and General Counsel. You will report to the Company’s Chief Executive Officer and/or Chief Operating Officer and work primarily at the Company’s principal executive office in California, which is currently in Menlo Park.

(b) Obligations to the Company . While you render services to the Company, you agree that you will not engage in any other employment, consulting or other business activity except as authorized by the Conflicts Committee or other written consent of the Company. In addition, while you render services to the Company, you will not assist any person or entity in competing with the Company, in preparing to compete with the Company or in hiring any employees or consultants of the Company. As an employee, you will also be expected to comply with the Company’s policies and procedures.

(c) No Conflicting Obligations . You represent and warrant to the Company that you are under no obligations or commitments, whether contractual or otherwise, that are materially inconsistent with your obligations under this Agreement. In connection with your Employment, you shall not use or disclose any trade secrets or other proprietary information or intellectual property in which you or any other person has any right, title or interest and your Employment will not infringe or violate the rights of any other person. You represent and warrant to the Company that you have returned all property and confidential information belonging to any prior employer.

2. Cash and Incentive Compensation .

(a) Salary . The Company shall pay you as compensation for your services a base salary at a gross annual rate of $275,000. Such salary shall be payable in accordance with the Company’s standard payroll procedures.


(b) Retention Bonus . Commencing on your Start Date and through the fifth anniversary of your Start Date, the Company will pay you an annual retention bonus in the aggregate annual amount of $400,000.00 (each, a “ Retention Bonus ”) to be paid in four equal installments of $100,000.00 each on the last business day of each calendar quarter following your Start Date, conditioned on your continued employment with the Company through each such date.

(c) Restricted Stock Units . The Company has granted you certain restricted stock units (“ RSUs ”) under its 2005 Stock Plan (the “ Plan ”), pursuant to that Notice of RSU Award (Grant Number RS000504) dated January 12, 2009 (your “ RSU Award ”).

(d) Stock Options . The Company has granted you options to purchase common stock in the Company under its Plan, pursuant to that Notice of Stock Option Grant (Grant Numbers 20051633 and 20051634) dated January 12, 2009 (your “ Options ”).

(e) Change of Control Vesting Acceleration . If you are subject to an Involuntary Termination, other than as a result of your death or Disability, within one (1) month prior to or within six (6) months following a Change of Control (as defined in the Plan), then you shall be eligible to receive accelerated vesting of the RSUs and Options, so that you will become vested in 100% of the RSUs and Option shares. In order to be eligible for such acceleration of vesting benefit in connection with your Involuntary Termination, you must execute the Company’s standard form of release of all claims agreements without alteration within twenty one (21) days following your Involuntary Termination (and you must not revoke such general release in accordance with its terms) and you must return all Company property to the Company within twenty-one (21) days following your Involuntary Termination, as provided in Section 6(a). Any RSUs that vest pursuant to this Section 2(e) shall vest upon the later of the date such release of claims becomes effective and the Initial Vesting Event (as defined in the RSU Award), and any Option shares that are eligible to vest pursuant to this Section 2(e) shall vest upon the date the release of claims described in this Section 2(e) becomes effective. Any RSUs that are eligible to vest pursuant to this Section 2(e) shall be settled within (30) days following the date of vesting but in no event later than March 15 of the calendar year following the calendar year in which the later of the Initial Vesting Event and your Involuntary Termination occurs. Notwithstanding any provision of this Agreement to the contrary, if you sign and do not revoke the release mentioned herein and thereafter file a lawsuit claiming you are entitled to additional RSUs or Options or additional shares of the Company’s common stock, the Company, at its option, may unilaterally cancel any shares of the Company’s common stock that you obtained in connection with the vesting acceleration provided for in this Section 2(e).

Notwithstanding the foregoing, if in connection with a Change of Control, the RSUs or the Options are not assumed or substituted for an equivalent award (within the meaning of Section 15(c) of the Plan), then you shall be eligible to receive accelerated vesting of the RSUs or the Options or both, as the case may be, effective immediately prior to the Change of Control in accordance with the preceding paragraph. Any such RSUs shall be settled within thirty (30) days following the date of the Change of Control but in no event later than March 15 of the calendar year following the calendar year in which the Change of Control occurs.

 

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(f) Definition of “Involuntary Termination .” For all purposes under this Agreement, “ Involuntary Termination ” shall mean the termination of your Employment with the Company by reason of:

(i) Your involuntary dismissal or discharge by the Company, or by any acquiring or successor entity (or parent or any subsidiary thereof employing you) for reasons other than Cause (as defined below) or

(ii) Your voluntary resignation after the occurrence of one of the following conditions without your prior written consent: (A) a material diminution in your base salary; (B) a material change in geographic location at which you must perform services (a change in location will be considered material if it increases your one-way commute by more than fifty (50) miles); (C) any material failure of the successors to the Company after a Change of Control to perform or cause the Company to perform the obligations of the Company under this Agreement; (D) any action or inaction of the Company that constitutes a material breach of the terms of this Agreement; or (E) any other material adverse change in your duties, authorities or responsibilities (e.g. your ceasing to be the chief legal officer of the Company), in each case, only if you provide notice to the Company of the existence of the applicable condition described in this Section 2(e) within 90 days of the initial existence of the condition, the Company fails to remedy the condition within 30 days thereafter, and within the 30 day period immediately following such failure to remedy, you elect to terminate your Employment. Notwithstanding any provision of this subsection to the contrary, the Company’s hiring of a new Chief Executive Officer or you reporting to the Company’s President or COO will not result in this subsection (ii) being satisfied. The parties intend that this trigger qualify as an involuntary separation from service trigger under Treasury Regulation Section 1.409A-l(n)(2).

(g) Definition of “Cause .” For all purposes under this Agreement, “ Cause ” shall mean a determination by the CEO that any of the following have occurred:

(i) you committed an act of material dishonesty in connection with your responsibilities as an employee;

(ii) you failed to comply with the material terms of any written Company policy or rule as they may be in effect from time to time during your employment and such failure is materially and demonstrably injurious to the Company;

(iii) you breached any material term of this Agreement, the Confidential Information and Invention Assignment Agreement between you and the Company, or any other written agreement between you and the Company and such breach is materially and demonstrably injurious to the Company;

(iv) you were convicted of, or entered a plea of guilty or nolo contendere to, a felony or crime of moral turpitude; or

(v) you engaged in gross misconduct and such misconduct is materially and demonstrably injurious to the Company.

 

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The cessation of your Employment shall not be deemed to be for Cause unless and until you are sent a written notice of the ground for the termination for “Cause” by the Company finding that, in the good faith opinion of the CEO you are guilty of the conduct described above, and specifying the particulars thereof in detail. If the Company does not deliver to you a notice of termination within ninety (90) days after the later of the date the CEO has knowledge that an event constituting Cause has occurred and, where applicable, the date the CEO has knowledge of the materiality of the injury to the Company, the event will no longer constitute Cause. You will have fifteen (15) days to cure from the date the notice is received by you.

(h) Definition of “Disability .” For all purposes under this Agreement, “ Disability ” shall mean your inability to perform the essential functions of your position with or without reasonable accommodation for a period of 120 consecutive days because of your physical or mental impairment.

(i) Incentive Bonus . In addition, you will be eligible to be considered for an incentive bonus for each fiscal year of the Company. The bonus (if any) will be awarded based on criteria established and approved by the Company’s Board of Directors or its Compensation Committee. Your target bonus will be equal to 45% of your annual base salary. Any bonus for a fiscal year will be paid according to the same payment schedule as applies to the Company’s other officers. The determinations of the Company’s Board of Directors or its Compensation Committee with respect to your bonus will be final and binding.

3. Vacation/PTO, Employee Benefits and other Incentive Compensation . During your Employment, you shall be eligible to accrue paid vacation / paid time off, pro-rated for the remainder of this calendar year, in accordance with the Company’s vacation / paid time off policy, as it may be amended from time to time, and at the rate equal to other similarly situated executives. During your Employment, you shall be eligible to participate in the employee benefit and incentive compensation plans maintained by the Company and generally available to similarly situated employees of the Company on a basis commensurate with other executive employees considering their respective responsibilities and compensation subject in each case to the generally applicable terms and conditions of the plan in question and to the determinations of any person or committee administering such plan.

4. Business Expenses . The Company will reimburse you for your necessary and reasonable business expenses incurred in connection with your duties hereunder upon presentation of an itemized account and appropriate supporting documentation, all in accordance with the Company’s generally applicable policies.

5. Termination .

(a) Employment at Will . Your Employment shall be “at will,” meaning that either you or the Company shall be entitled to terminate your Employment at any time and for any reason, with or without Cause. Any contrary representations that may have been made to you shall be superseded by this Agreement. This Agreement shall constitute the full and complete agreement between you and the Company on the “at-will” nature of your Employment, which may only be changed in an express written agreement signed by you and the CEO of the Company.

 

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(b) Rights Upon Termination . Except as expressly provided in Sections 2(e), 6, 9(a), 9(b), 9(c) and 9(g) of this Agreement, upon the termination of your Employment, you shall only be entitled to the compensation and benefits earned and the reimbursements described in this Agreement for the period preceding the effective date of the termination.

6. Termination Benefits .

(a) General Release . Any other provision of this Agreement notwithstanding, subsection (b) and (c) below shall not apply unless and until (i) you have executed a full and complete general release of all claims substantially in the form attached hereto as Exhibit A within twenty-one (21) days following your termination (and you do not revoke such general release in accordance with its terms) and (ii) you have returned all Company property (other than property of inconsequential value, but the parties agree that, among other things, any property capable of containing the Company’s confidential, trade secret or proprietary information is material and must be returned) to the Company within twenty-one (21) days following your termination.

(b) Vesting Acceleration . If you are subject to an Involuntary Termination, other than as a result of your death or Disability, during your fourth or fifth years of Employment with the Company, then you shall be eligible to vest in 50% of the remaining unvested RSUs and remaining unvested Option shares. Any RSUs that are eligible to vest pursuant to this Section 6(b) shall vest upon the later of the date the release of claims described in Section 6(a) becomes effective and the Initial Vesting Event, and any Option shares that are eligible to vest pursuant to this Section 6(b) shall vest upon the date the release of claims described in Section 6(a) becomes effective. Any RSUs that vest pursuant to this Section 6(b) shall be settled within (30) days following the date of vesting but in no event later than March 15 of the calendar year following the calendar year in which the later of the Initial Vesting Event or your termination of Employment, as described in this Section 6(b), occurs. Any vesting acceleration related to your termination of your Employment in connection with a Change of Control will be governed by Section 2(e) of this Agreement and will not result in the vesting acceleration provided for in this Section 6(b).

(c) Cash Severance . If you are subject to an Involuntary Termination, other than as a result of your death or Disability at any time during your Employment, the Company will pay you a lump sum severance amount equal to one (1) times the sum of (i) your annual base salary in effect immediately prior to the date of your termination and (ii) your annual Retention Bonus within ten (10) days after the release contemplated by subsection (a) above becomes effective and irrevocable but in no event later than March 15 of the calendar year following the calendar year in which your termination of employment occurs.

7. Confidentiality Agreement . You hereby reaffirm your obligations under the Confidential Information and Invention Assignment Agreement between you and the Company, dated September 24, 2008, a copy of which is attached hereto as Exhibit B (the “ Confidentiality Agreement ”).

 

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8. Successors .

(a) Company’s Successors . This Agreement shall be binding upon any successor (whether direct or indirect and whether by purchase, lease, merger, consolidation, liquidation or otherwise) to all or substantially all of the Company’s business and/or assets. Any such successor will within a reasonable period of becoming the successor assume in writing and be bound by all of the Company’s obligations under this Agreement. For all purposes under this Agreement, the term “ Company ” shall include any successor to the Company’s business or assets that becomes bound by this Agreement.

(b) Your Successors . This Agreement and all of your rights hereunder shall inure to the benefit of, and be enforceable by, your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

9. Miscellaneous Provisions .

(a) Indemnification . The Company agrees that if you are made a party or threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative by reason of the fact that you are or were an employee of the Company or are or were serving at the request of the Company, as a director, officer, member, employee or agent of another corporation or a partnership, joint venture, trust or other enterprise, you shall be indemnified by the Company to the fullest extent permitted by applicable law and the Company’s certificate of incorporation and by-laws, as the same exists or may hereafter be amended, against all reasonably and actually incurred legal expenses and related costs incurred or suffered by you in connection therewith provided that you cooperate with the Company in connection with such actual or threatened action, suit, proceeding or investigation, and such indemnification shall continue even if you have ceased to be an officer or are no longer employed by the Company and shall inure to the benefit of your heirs, executors and administrators. The Company shall provide you with directors’ and officers’ liability insurance at least as favorable as the insurance coverage provided to other senior executive officers and directors of the Company respecting liabilities, and reasonable legal fees and costs, charges and expenses incurred or sustained by you (or your legal representative or other successors) in connection with any such proceeding. Unless otherwise provided in an indemnification agreement with the Company, no indemnity shall be paid by the Company (i) if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law; (ii) if it is finally determined that, in connection with the above action, suit or proceeding, that your conduct was finally adjudged to have been knowingly fraudulent, deliberately dishonest or willful; or (iii) if a final decision by a Court having jurisdiction in the matter shall determine that such indemnification is not lawful. Unless otherwise provided in an indemnification agreement with the Company, you agree to reimburse the Company for all reasonable expenses paid by the Company in defending any civil or criminal action suit or proceeding against you in the event and only to the extent that it shall be ultimately determined that you are not entitled to be indemnified by the Company for such expenses under the provisions of applicable law, the Company’s bylaws, this Agreement or otherwise.

(b) Legal Fees . Following a Change of Control only, the Company shall pay the legal fees incurred by you to enforce the terms of this Agreement or to dispute the legality of your termination.

 

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(c) Parachute Payments . If any payment or benefit you would receive pursuant to a Change of Control from the Company or otherwise (“ Payment ”) would (i) constitute a “parachute payment” within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended (the “ Code ”), and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “ Excise Tax ”), then such Payment shall be reduced to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in your receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount and none of the parachute payments are non-qualified deferred compensation subject to Section 409A of the Code, then the reduction shall occur in the manner you elect in writing prior to the date of payment. If any parachute payment constitutes non-qualified deferred compensation subject to Section 409A or you fail to elect an order, then the reduction shall occur in the following order: first a pro rata reduction of (i) cash payments subject to Section 409A of the Code as non-qualified deferred compensation and (ii) cash payments not subject to Section 409A of the Code, and second a pro rata cancellation of accelerated vesting of (i) equity-based compensation subject to Section 409A of the Code as non-qualified deferred compensation and (ii) equity-based compensation not subject to Section 409A of the Code, with, in each case, the cancellation of accelerated vesting being applied first to vesting that is not subject to Treasury Regulation section 1.280G-1 Q/A 24(c) and subsequently to vesting that is subject to such section. Reduction in either cash payments or equity compensation benefits shall be made pro rata between and among benefits which are subject to Section 409A of the Code and benefits which are exempt from Section 409A of the Code. The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change of Control shall perform the foregoing calculations. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. Any good faith determination of the accounting firm made hereunder shall be final, binding and conclusive upon the Company and you.

(d) Notice . Notices and all other communications contemplated by this Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or when mailed by U.S. registered or certified mail, return receipt requested and postage prepaid. In your case, mailed notices shall be addressed to you at the home address that you most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to its corporate headquarters, and all notices shall be directed to the attention of its Secretary.

(e) Modifications and Waivers . No provision of this Agreement shall be modified, waived or discharged unless the modification, waiver or discharge is agreed to in writing and signed by you and by an authorized officer of the Company (other than you). No waiver by either party of any breach of, or of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or of the same condition or provision at another time.

 

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(f) Whole Agreement . No other agreements, representations or understandings (whether oral or written and whether express or implied) which are not expressly set forth in this Agreement have been made or entered into by either party with respect to the subject matter hereof. This Agreement (including, for the avoidance of doubt, its Exhibits) and the Confidentiality Agreement contain the entire understanding of the parties with respect to the subject matter hereof.

(g) Taxes . All payments made under this Agreement shall be subject to reduction to reflect taxes or other charges required to be withheld by law. You and the Company intend to structure and operate the payments and benefits described in this Agreement, and your other compensation, to be exempt from or to comply with the requirements of Section 409A of the Code to the extent applicable. The Company and you intend that your RSUs and RSU Award have been structured to be exempt from or to comply with the requirements of Section 409A of the Code to the extent applicable. The Company agrees not to take any action (or omit to take any action that is required to be taken) in respect of the RSUs (or any other similar award) that is materially inconsistent with, contrary to or in material breach of the terms of the RSUs (or any similar award), other than as required by applicable law, that causes you to incur tax in respect of a violation of Section 409 A of the Code with respect to such RSUs unless you request the action (or omission). For the avoidance of doubt, the Company agrees that any failure to follow the payment terms under the RSUs (or any other similar award granted to you) will be considered a material breach for this purpose. If you or the Company believes, at any time, that any feature of your compensation or benefits (including your RSUs) does not comply with (or is not exempt from) Section 409A of the Code or that any action taken or contemplated to be taken (including any failure to take action) in regards to your compensation or benefits caused or might cause a violation of Section 409A of the Code, you or the Company will promptly advise the other and will reasonably negotiate in good faith to amend the terms of the payments or benefits or alter the action or contemplated action in order that your payments or benefit arrangements comply with (or are exempt from) the requirements of Section 409A of the Code or in order to mitigate any additional taxes that may apply under Section 409A of the Code if compliance or exemption is not practicable. For the avoidance of doubt, the Company is not responsible for the payment of any taxes, including income and excise taxes, that you may incur under Section 409A of the Code, nor will the Company indemnify you for any such liability, unless the Company breaches a material term of this Agreement or of any compensatory program in which you participate and that breach is the cause of the 409A taxation/penalties. Notwithstanding the foregoing, the Company will indemnify you to the greatest extent that it has indemnified or agrees to indemnify any current or former employee who has incurred or incurs the additional taxes under Section 409A in connection with an RSU or similar type of award due to the same or similar circumstances.

(h) Choice of Law and Severability . This Agreement shall be interpreted in accordance with the laws of the State of California without giving effect to provisions governing the choice of law. If any provision of this Agreement becomes or is deemed invalid, illegal or unenforceable in any applicable jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall be deemed amended to the minimum extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision shall be stricken and the remainder of this Agreement shall continue in full force and effect. If any

 

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provision of this Agreement is rendered illegal by any present or future statute, law, ordinance or regulation (collectively, the “ Law ”) then that provision shall be curtailed or limited only to the minimum extent necessary to bring the provision into compliance with the Law. All the other terms and provisions of this Agreement shall continue in full force and effect without impairment or limitation.

(i) No Assignment . This Agreement and all of your rights and obligations hereunder are personal to you and may not be transferred or assigned by you at any time. The Company may assign its rights under this Agreement to any entity that assumes the Company’s obligations hereunder in connection with any sale or transfer of all or a substantial portion of the Company’s assets to such entity.

(j) Authority . The Company represents and warrants that (i) the execution, delivery and performance of this Agreement by the Company does not and will not violate any law, regulation, order, judgment or decree or any agreement, plan or corporate governance document of the Company and (ii) upon the execution and delivery of this Agreement, this Agreement shall be the valid and binding obligation of the Company, enforceable in accordance with its terms, except to the extent enforceability may be limited by bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally and by the effect of general principles of equity (regardless of whether enforceability is considered in a proceeding in equity or at law).

(k) Counterparts . This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

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To indicate your acceptance of the mutual promises contained in this letter agreement, please sign and date this letter in the space provided below and return it to me.

 

Very truly yours,
FACEBOOK, INC.
By:  

/s/ David Ebersman

(Signature)
Name:  

David Ebersman

Title:  

Chief Financial Officer

 

ACCEPTED AND AGREED:
THEODORE ULLYOT
/s/ Theodore Ullyot
(Signature)
   
Date: January 27, 2012

 

Exhibit A:    Form of General Release
Exhibit B:    Confidential Information and Invention Assignment Agreement

 

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EXHIBIT A

FORM OF GENERAL RELEASE


General Release of Claims

This General Release of Claims (this “Release”), dated as of              , 20      , confirms the following understandings and agreements between Facebook, Inc., a Delaware corporation (the “Company”) and                      (hereinafter referred to as “you” or “your”).

In consideration of the promises set forth in that certain employment agreement between you and the Company dated September       , 2008 [, as amended] (the “ Employment Agreement ”) as well as any promises set forth in this Release, you agree as follows:

(1) Opportunity for Review and Revocation. [to be included if employee is age 40 or older]. You have twenty-one (21) days to review and consider this Release. Notwithstanding anything contained herein to the contrary, this Release will not become effective or enforceable for a period of seven (7) calendar days following the date of its execution, during which time you may revoke your acceptance of this Release by notifying the Chief Operating Officer of the Company, in writing. To be effective, such revocation must be received by the Company no later than 5:00 p.m. on the seventh (7 th ) calendar day following its execution. Provided that the Release is executed and you do not revoke it, the eighth (8 th ) day following the date on which this Release is executed shall be its effective date (the “ Effective Date ”). In the event of your revocation of this Release pursuant to this Section 1, this Release will be null and void and of no effect, and the Company will have no obligations hereunder. [if employee is less than age 40: You have seven (7) days to review and consider this Release (the “ Deadline ”). The effective date of this Release is the date on which you have signed and returned to the Chief Operating Officer of the Company the signed Release within the Deadline.]

(2) Employee Release and Waiver of Claims .

(a) Notwithstanding the provisions of section 1542 of the Civil Code of California, and in accordance with Section 2(f) and Section 6(a) of the Employment Agreement, you and your representatives, agents, estate, heirs, successors and assigns, absolutely and unconditionally hereby release, remise, discharge, indemnify and hold harmless the Company Releasees ( Company Releasees defined to include the Company and/or any of its parents, subsidiaries or affiliates, predecessors, successors or assigns, and its and their respective current and/or former partners, directors, shareholders/stockholders, officers, employees, attorneys and/or agents, all both individually and in their official capacities), from any and all legally waivable actions or causes of action, suits, claims, complaints, contracts, liabilities, agreements, promises, contracts, torts, debts, damages, controversies, judgments, rights and demands, whether existing or contingent, known or unknown, suspected or unsuspected, which arise out of your employment with, change in employment status with, and/or separation of employment from, the Company. This release is intended by you to be all encompassing and to act as a full and total release of any legally waivable claims, whether specifically enumerated herein or not, that you may have or have had against the Company Releasees arising from conduct occurring up to and through the date of this Release, including, but not limited to, any legally waivable claims arising from any federal, state or local law, regulation or constitution dealing with either employment, employment benefits or employment discrimination such as those laws or regulations concerning discrimination on the basis of race, color, creed, religion, age, sex, sex harassment, sexual orientation, national origin, ancestry, genetic carrier status, handicap or


disability, veteran status, any military service or application for military service, or any other category protected under federal or state law; including any claims or causes of action you have or may have relating to discrimination under federal, state or locate statutes (whether before a court or an administrative agency) including, but not limited to, the Age Discrimination in Employment Act of 1967, Title VII of the Civil Rights Act of 1964, the Employee Retirement Income Security Act of 1974 (excluding all claims for accrued, vested benefits under any employee benefit or pension plan of the Company subject to the terms and conditions of such plan and applicable law), the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act, the National Labor Relations Act, the California Fair Employment and Housing Act, the California Constitution, the California Labor Code, and the California Civil Code, all as amended from time to time; any contract, whether oral or written, express or implied; any tort; any claim for equity or other benefits; or any other statutory and/or common law claim.

(b) You acknowledge that your execution of this Agreement shall be effective as a bar to each and every claim specified in Section 2(a) of this Agreement. Accordingly, you hereby expressly waive any and all rights and benefits conferred upon you by the provisions of Section 1542 of the California Civil Code and expressly consent that this Agreement shall be given full force and effect with respect to each and all of its express terms and provisions, including those related to unknown and/or unsuspected claims, if any, as well as those relating to any other claims specified in Sections 2(a) of this Agreement. Section 1542 provides as follows:

“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”

You further represent that you understand and acknowledge the significance and consequence of such release as well as the specific waiver of Section 1542.

(c) This Release does not include any claim which, as a matter of law, cannot be released by private agreement. Nor does this Release prohibit or bar you from providing truthful testimony in any legal proceeding or from cooperating with, or making truthful disclosures to, any governmental agency. Notwithstanding the foregoing, with respect to any claim that cannot be released by private agreement, you agree to release and waive your right (if any) to any monetary damages or other recovery as to such claims, including any claims brought on your behalf, either individually or as part of a collective action, by any governmental agency or other third party.

(d) Notwithstanding any provision of this Release to the contrary, by executing this Release, you are not releasing any claims relating to (i) your rights or any other benefits expressly provided under the Employment Agreement, (ii) any rights relating to the restricted stock units (the “ RSUs ”) granted to you pursuant to the Employment Agreement, any rights relating to the stock option (the “ Option ”) granted to you pursuant to the Employment Agreement or otherwise or any rights relating to any other outstanding equity awards or (iii) any indemnification or similar rights you may have as a current or former officer or director of the Company, including, without limitation, any and all rights thereto referenced in the Employment

 

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Agreement, the Company’s bylaws, plan of reorganization or liquidation, other governance documents, or any rights with respect to the Company’s directors’ and officers’ insurance policies.

(3) Company Release and Waiver of Claims . The Company covenants that, except for any claim that could be asserted by the Company or its shareholders against you (1) for fraud, breach of fiduciary duty, embezzlement, breach of trust, theft, violation of state or federal securities laws, conversion, misuse or unauthorized disclosure of the Company’s confidential, proprietary or trade secret information; (2) brought to enforce the terms and provisions of this Release or the Employment Agreement (including the Exhibits thereto); or (3) based upon a claim that conduct in which you engaged constituted grounds for termination of your employment for “Cause”, as defined in the Employment Agreement, it hereby waives any non-excluded claims and releases you from such non-excluded claims.

(4) No Suit . You represent that you have not filed any complaints or charges against the Company with any federal, state, or local administrative agency arising out of your employment with the Company on or prior to the Effective Date.

(5) Prior Agreement . You understand and agree that you have continuing obligations under the Confidential Information and Inventions Assignment Agreement between you and the Company dated as of              , 2008 (hereinafter, the “ CIIAA ”). A copy of the CIIAA is attached hereto as Exhibit A and incorporated herein by reference. You reaffirm your commitment under the CIIAA in this Release, and agree that, as part of this Release, you will comply fully with the terms of the CIIAA. You also confirm that you have not violated the CIIAA.

(6) Restricted Stock Units and Option . The Company previously granted you RSUs and the Option under the Company’s 2005 Stock Plan (the “ Stock Plan ”). Pursuant to the Employment Agreement, as of the Effective Date you will be vested in [NUMBER] of the RSUs and [NUMBER] of the shares subject to the Option. All of your rights and obligations with respect to the RSUs are governed by the terms and conditions of the Restricted Stock Unit Agreement, and all of your rights and obligations with respect to the Option are governed by the terms and conditions of the applicable Stock Option Agreement.

(7) Confidentiality . You agree that you will not disclose to others the fact or terms of this Release, except that you may disclose such information to your attorney or accountant in order for such individuals to render services to you.

(8) Successors and Assigns . The provisions hereof shall inure to the benefit of your heirs, executors, administrators, legal personal representatives and assigns and shall be binding upon your heirs, executors, administrators, legal personal representatives and assigns.

(9) Severability. If any provision of this Release, or part thereof, is held invalid, void or voidable as against public policy or otherwise, the invalidity shall not affect other provisions, or parts thereof, which may be given effect without the invalid provision or part. To this extent, the provisions and parts thereof of this Release are declared to be severable. Any waiver of any provision of this Release shall not constitute a waiver of any other provision of this Release unless expressly so indicated otherwise. The language of all parts of this Release shall in all cases be construed according to its fair meaning and not strictly for or against either of the parties.

 

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(10) Governing Law . Any claims arising out of this Release (or any other claims arising out of the relationship between the parties) shall be governed by and construed in accordance with the laws of the state of California and shall in all respects be interpreted, enforced and governed under the internal and domestic laws of California, without giving effect to the principles of conflicts of laws of such state. Any claims or legal actions by one party against the other shall be commenced and maintained in a court of competent jurisdiction in Santa Clara County, California, and you hereby submit to the jurisdiction and venue of any such court.

(11) Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which taken together will constitute one and the same instrument.

(12) This Agreement shall not be construed as an admission by you or the Company of any wrongful act, unlawful discrimination, or breach of contract.

IN WITNESS WHEREOF, the undersigned parties have executed this Release as of the date first written above.

 

By:  

 

  Name:
  Facebook, Inc
By:  

 

  Name: Ted Ullyot

I REPRESENT THAT I HAVE READ THE FOREGOING RELEASE, THAT I FULLY UNDERSTAND THE TERMS AND CONDITIONS OF SUCH RELEASE AND THAT I AM KNOWINGLY AND VOLUNTARILY EXECUTING THE SAME WITHOUT DURESS OR COERCION FROM ANY SOURCE. IN ENTERING INTO THIS RELEASE, I DO NOT RELY ON ANY REPRESENTATION, PROMISE OR INDUCEMENT MADE BY THE COMPANY OR ITS REPRESENTATIVES WITH THE EXCEPTION OF THE CONSIDERATION DESCRIBED IN THIS DOCUMENT.

 

By:  

 

  Name: Ted Ullyot

 

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EXHIBIT B

CONFIDENTIAL INFORMATION AND

INVENTION ASSIGNMENT AGREEMENT


FACEBOOK, INC.

CONFIDENTIAL INFORMATION AND

INVENTION ASSIGNMENT AGREEMENT

FOR EMPLOYEES

As a condition of my becoming employed (or my employment being continued) by or retained as a consultant (or my consulting relationship being continued) by Facebook, Inc., a Delaware corporation (“ Facebook ”) or any of its current or future subsidiaries, affiliates, successors or assigns (collectively, the “ Company ”), and in consideration of my employment or consulting relationship with the Company and my receipt of the compensation now and hereafter paid to me by the Company, I agree to the following:

1. Employment or Consulting Relationship . I understand and acknowledge that this Agreement does not alter, amend or expand upon any rights I may have to continue in the employ of, or in a consulting relationship with, or the duration of my employment or consulting relationship with, the Company under any existing agreements between the Company and me or under applicable law. Any employment or consulting relationship between the Company and me, whether commenced prior to or upon or after the date of this Agreement, shall be referred to herein as the “ Relationship .”

2. At-Will Relationship . I understand and acknowledge that my Relationship with the Company is and shall continue to be at-will, as defined under applicable law, meaning that either I or the Company may terminate the Relationship at any time for any reason or no reason, without further obligation or liability, except as set forth in the Employment Agreement.

3. Confidential Information .

(a) Company Information . I agree at all times during the term of my Relationship with the Company and thereafter, to hold in strictest confidence, and not to use, except for the benefit of the Company to the extent necessary to perform my obligations to the Company under the Relationship, or to disclose to any person, firm, corporation or other entity without written authorization of the Board of Directors of the Company, any Confidential Information of the Company which I obtain or create. I further agree not to make copies of such Confidential Information except as authorized by the Company. I understand that “ Confidential Information ” means any Company proprietary information, technical data, trade secrets or know-how, including, but not limited to, research, product plans, products, services, suppliers, customer lists and customers (including, but not limited to, customers of the Company on whom I called or with whom I became acquainted during the Relationship), prices and costs, markets, software, developments, inventions, laboratory notebooks, processes, formulas, technology, designs, drawings, engineering, hardware configuration information, lists of, or information relating to, employees and consultants of the Company (including, but not limited to, the names, contact information, jobs, compensation and expertise of such employees and consultants), lists of, or information relating to, suppliers and customers (including, but not limited to, customers of the Company on whom I called or with whom I became acquainted during the Relationship), price lists, pricing methodologies, cost data, market share data, marketing plans, licenses,


contract information, business plans, financial forecasts, historical financial data, budgets or other business information disclosed to me by the Company either directly or indirectly in writing, orally or by drawings or observation of parts or equipment or created by me during the period of the Relationship, whether or not during working hours. I understand that Confidential Information includes, but is not limited to, information pertaining to any aspect of the Company’s business, which is either information not known by actual or potential competitors of the Company or other third parties not under confidentiality obligations to the Company, or is otherwise proprietary information of the Company or its customers or suppliers, whether of a technical nature or otherwise. I further understand that Confidential Information does not include any of the foregoing items which has become publicly and widely known and which has been made generally available through no wrongful act of mine or of others who were under confidentiality obligations as to the item or items involved.

(b) Prior Obligations . I represent that my performance of all terms of this Agreement as an employee or consultant of the Company has not breached and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by me prior or subsequent to the commencement of my Relationship with the Company, and I will not disclose to the Company or use any inventions, confidential or non-public proprietary information or material belonging to any current or former client or employer or any other party. I will not induce the Company to use any inventions, confidential or non-public proprietary information, or material belonging to any current or former client or employer or any other party. I acknowledge and agree that I have listed on Exhibit A all agreements (e.g., non-competition agreements, non-solicitation of customers agreements, non-solicitation of employees agreements, confidentiality agreements, inventions agreements, etc.) with a current or former employer, or any other person or entity, that may restrict my ability to accept employment with the Company or my ability as an employee or consultant to recruit or engage customers or service providers on behalf of the Company, or otherwise relate to or restrict my ability to perform my duties as an employee of the Company or any obligation I may have to the Company.

(c) Third Party Information . I recognize that the Company has received and in the future will receive confidential or proprietary information from third parties subject to a duty on the Company’s part to maintain the confidentiality of such information and to use it only for certain limited purposes. I agree to hold all such confidential or proprietary information in the strictest confidence and not to disclose it to any person, firm or corporation or to use it except as necessary in carrying out my work for the Company consistent with the Company’s agreement with such third party.

4. Inventions .

(a) Inventions Retained and Licensed . I have attached hereto, as Exhibit A , a list describing with particularity all inventions, original works of authorship, developments, improvements, and trade secrets which were made by me prior to the commencement of the Relationship (collectively referred to as “ Prior Inventions ”), which belong solely to me or belong to me jointly with another, which relate in any way to any of the Company’s proposed businesses, products or research and development, and which are not assigned to the Company hereunder; or, if no such list is attached, I represent that there are no such Prior Inventions. If, in the course of my Relationship with the Company, I incorporate into a Company product, process

 

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or machine a Prior Invention owned by me or in which I have an interest, the Company is hereby granted and shall have a non-exclusive, royalty-free, irrevocable, perpetual, worldwide license (with the right to sublicense) to make, have made, copy, modify, make derivative works of, use, sell and otherwise distribute such Prior Invention as part of or in connection with such product, process or machine.

(b) Assignment of Inventions . I agree that I will promptly make full written disclosure to Facebook, will hold in trust for the sole right and benefit of Facebook, and hereby assign to Facebook, or its designee, all my right, title and interest throughout the world in and to any and all inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets, whether or not patentable or registrable under copyright or similar laws, which I may solely or jointly conceive or develop or reduce to practice, or cause to be conceived or developed or reduced to practice, during the period of my Relationship with the Company (collectively referred to as “ Inventions ”), except as provided in Section 4(e) below. I further acknowledge that all Inventions which are made by me (solely or jointly with others) within the scope of and during the period of my Relationship with the Company are “ works made for hire ” (to the greatest extent permitted by applicable law) and are compensated by my salary (if I am an employee) or by such amounts paid to me under any applicable consulting agreement or consulting arrangements (if I am a consultant), unless regulated otherwise by the mandatory law of the state of California.

(c) Maintenance of Records . I agree to keep and maintain adequate and current written records of all Inventions made by me (solely or jointly with others) during the term of my Relationship with the Company. The records may be in the form of notes, sketches, drawings, flow charts, electronic data or recordings, laboratory notebooks, and any other format. The records will be available to and remain the sole property of the Company at all times. I agree not to remove such records from the Company’s place of business except as expressly permitted by Company policy which may, from time to time, be revised at the sole election of the Company for the purpose of furthering the Company’s business. I agree to return all such records (including all copies thereof) to Facebook at the time of termination of my Relationship with the Company as provided for in Section 5.

(d) Patent and Copyright Rights . I agree to assist Facebook, or its designee, at its expense, in every proper way to secure Facebook’s, or its designee’s, rights in the Inventions and any copyrights, patents, trademarks, mask work rights, moral rights, or other intellectual property rights relating thereto in any and all countries, including the disclosure to Facebook or its designee of all pertinent information and data with respect thereto, the execution of all applications, specifications, oaths, assignments, recordations, and all other instruments which Facebook or its designee shall deem necessary in order to apply for, obtain, maintain and transfer such rights, or if not transferable, waive such rights, and in order to assign and convey to Facebook or its designee, and any successors, assigns and nominees the sole and exclusive rights, title and interest in and to such Inventions, and any copyrights, patents, mask work rights or other intellectual property rights relating thereto. I further agree that my obligation to execute or cause to be executed, when it is in my power to do so, any such instrument or papers shall continue after the termination of this Agreement until the expiration of the last such intellectual property right to expire in any country of the world. If Facebook or its designee is unable because of my mental or physical incapacity or unavailability or for any other reason to secure

 

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my signature to apply for or to pursue any application for any United States or foreign patents, copyright, mask works or other registrations covering Inventions or original works of authorship assigned to Facebook or its designee as above, then I hereby irrevocably designate and appoint Facebook and its duly authorized officers and agents as my agent and attorney in fact, to act for and in my behalf and stead to execute and file any such applications and to do all other lawfully permitted acts to further the application for, prosecution, issuance, maintenance or transfer of letters patent, copyright or other registrations thereon with the same legal force and effect as if originally executed by me. I hereby waive and irrevocably quitclaim to Facebook or its designee any and all claims, of any nature whatsoever, which I now or hereafter have for infringement of any and all proprietary rights assigned to Facebook or such designee.

(e) Exception to Assignments . I understand that the provisions of this Agreement requiring assignment of Inventions to Facebook do not apply to any invention which qualifies fully under the provisions of California Labor Code Section 2870 (attached hereto as Exhibit B ). I will advise the Company promptly in writing of any inventions that I believe meet such provisions and are not otherwise disclosed on Exhibit A .

5. Company Property; Returning Company Documents . I acknowledge and agree that I have no expectation of privacy with respect to the Company’s telecommunications, networking or information processing systems (including, without limitation, stored company files, e-mail messages and voice messages) and that my activity and any files or messages on or using any of those systems may be monitored at any time without notice. I further agree that any property situated on the Company’s premises and owned by the Company, including disks and other storage media, filing cabinets or other work areas, is subject to inspection by Company personnel at any time with or without notice. I agree that, at the time of termination of my Relationship with the Company, I will deliver to the Company (and will not keep in my possession, recreate or deliver to anyone else) any and all devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, materials, flow charts, equipment, other documents or property, or reproductions of any of the aforementioned items developed by me pursuant to the Relationship or otherwise belonging to the Company, its successors or assigns. In the event of the termination of the Relationship, I agree to sign and deliver the “ Termination Certification ” attached hereto as Exhibit C ; however, my failure to sign and deliver the Termination Certificate shall in no way diminish my continuing obligations under this Agreement.

6. Notification to Other Parties .

(a) Employees . In the event that I leave the employ of the Company, I hereby consent to notification by the Company to my new employer about my rights and obligations under this Agreement.

(b) Consultants . I hereby grant consent to notification by the Company to any other parties besides the Company with whom I maintain a consulting relationship, including parties with whom such relationship commences after the effective date of this Agreement, about my rights and obligations under this Agreement.

 

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7. Solicitation of Employees, Consultants and Other Parties . As described above, I acknowledge and agree that the Company’s Confidential Information includes information relating to the Company’s employees, consultants, customers and others, and that I will not use or disclose such Confidential Information except as authorized by the Company. I further agree as follows:

(a) Employees, Consultants . I agree that during the term of the Relationship, and for a period of twelve (12) months immediately following the termination of the Relationship for any reason, whether with or without cause, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees or consultants to terminate their relationship with the Company, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Company, either for myself or for any other person or entity.

(b) Other Parties . I agree that during the term of the Relationship, and for a period of twelve (12) months immediately following the termination of the Relationship for any reason, whether with or without cause, I shall not use any Confidential Information of the Company to negatively influence any of the Company’s clients or customers from purchasing Company products or services or to solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct any purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Company.

8. Representations and Covenants .

(a) Facilitation of Agreement . I agree to execute promptly any proper oath or verify any proper document required to carry out the terms of this Agreement upon the Company’s written request to do so.

(b) Conflicts . I represent that my performance of all the terms of this Agreement does not and will not breach any agreement I have entered into, or will enter into with any third party, including without limitation any agreement to keep in confidence proprietary information acquired by me in confidence or in trust prior to commencement of my Relationship with the Company. I agree not to enter into any written or oral agreement that conflicts with the provisions of this Agreement.

(c) Voluntary Execution . I certify and acknowledge that I have carefully read all of the provisions of this Agreement and that I understand and will fully and faithfully comply with such provisions.

9. General Provisions .

(a) Governing Law . The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of California, without giving effect to the principles of conflict of laws.

(b) Entire Agreement . This Agreement sets forth the entire agreement and understanding between the Company and me relating to the subject matter herein and merges all

 

-5-


prior discussions between us. No modification or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless in writing signed by both parties. Any subsequent change or changes in my duties, obligations, rights or compensation will not affect the validity or scope of this Agreement.

(c) Severability . If one or more of the provisions in this Agreement are deemed void by law, then the remaining provisions will continue in full force and effect.

(d) Successors and Assigns . This Agreement will be binding upon my heirs, executors, administrators and other legal representatives, and my successors and assigns, and will be for the benefit of the Company, its successors, and its assigns.

(e) Survival . The provisions of this Agreement shall survive the termination of the Relationship and the assignment of this Agreement by the Company to any successor in interest or other assignee.

(f) Remedies . I acknowledge and agree that violation of this Agreement by me may cause the Company irreparable harm, and therefore agree that the Company will be entitled to seek extraordinary relief in court, including but not limited to temporary restraining orders, preliminary injunctions and permanent injunctions without the necessity of posting a bond or other security and in addition to and without prejudice to any other rights or remedies that the Company may have for a breach of this Agreement.

(g) ADVICE OF COUNSEL . I ACKNOWLEDGE THAT, IN EXECUTING THIS AGREEMENT, I HAVE HAD THE OPPORTUNITY TO SEEK THE ADVICE OF INDEPENDENT LEGAL COUNSEL, AND I HAVE READ AND UNDERSTOOD ALL OF THE TERMS AND PROVISIONS OF THIS AGREEMENT. THIS AGREEMENT SHALL NOT BE CONSTRUED AGAINST ANY PARTY BY REASON OF THE DRAFTING OR PREPARATION HEREOF.

[Signature Page Follows]

 

-6-


The parties have executed this Agreement on the respective dates set forth below:

 

COMPANY:     EMPLOYEE:
FACEBOOK, INC.     Theodore W. Ullyot , an Individual:
By:  

/s/ Lori Goler

     
Name:  

Lori Goler

   

/s/ Theodore W. Ullyot

      Signature
Title:  

 

     
Date:  

 

    Date:  

9/24/2008

 

-7-


EXHIBIT A

LIST OF PRIOR INVENTIONS

AND ORIGINAL WORKS OF AUTHORSHIP

EXCLUDED UNDER SECTION 5

 

Title

 

Date

 

Identifying Number
or Brief Description

     No inventions or improvements

     Additional Sheets Attached

 

Signature of Employee/Consultant:    
Print Name of Employee/Consultant:    
Date:    
 


EXHIBIT B

Section 2870 of the California Labor Code is as follows:

(a) Any provision in an employment agreement which provides that an employee shall assign, or offer to assign, any of his or her rights in an invention to his or her employer shall not apply to an invention that the employee developed entirely on his or her own time without using the employer’s equipment, supplies, facilities, or trade secret information except for those inventions that either:

(1) Relate at the time of conception or reduction to practice of the invention to the employer’s business, or actual or demonstrably anticipated research or development of the employer; or

(2) Result from any work performed by the employee for the employer.

(b) To the extent a provision in an employment agreement purports to require an employee to assign an invention otherwise excluded from being required to be assigned under subdivision (a), the provision is against the public policy of this state and is unenforceable.


EXHIBIT C

TERMINATION CERTIFICATION

This is to certify that I do not have in my possession, nor have I failed to return, any devices, records, data, notes, reports, proposals, lists, correspondence, specifications, drawings, blueprints, sketches, laboratory notebooks, flow charts, materials, equipment, other documents or property, or copies or reproductions of any aforementioned items belonging to Facebook, Inc., its subsidiaries, affiliates, successors or assigns (together the “ Company ”).

I further certify that I have complied with all the terms of the Company’s Confidential Information and Invention Assignment Agreement signed by me, including the reporting of any inventions and original works of authorship (as defined therein), conceived or made by me (solely or jointly with others) covered by that agreement.

I further agree that, in compliance with the Confidential Information and Invention Assignment Agreement, I will preserve as confidential all trade secrets, confidential knowledge, data or other proprietary information relating to products, processes, know-how, designs, formulas, developmental or experimental work, computer programs, data bases, other original works of authorship, customer lists, business plans, financial information or other subject matter pertaining to any business of the Company or any of its employees, clients, consultants or licensees.

I further agree that for twelve (12) months from the date of this Certificate, I shall not either directly or indirectly solicit, induce, recruit or encourage any of the Company’s employees or consultants to terminate their relationship with the Company, or attempt to solicit, induce, recruit, encourage or take away employees or consultants of the Company, either for myself or for any other person or entity. Further, I shall not at any time use any Confidential Information of the Company to negatively influence any of the Company’s clients or customers from purchasing Company products or services or to solicit or influence or attempt to influence any client, customer or other person either directly or indirectly, to direct his or its purchase of products and/or services to any person, firm, corporation, institution or other entity in competition with the business of the Company.

 

Date:    

 

 

(Employee’s Signature)

 

(Type/Print Employee’s Name)

EXHIBIT 10.11

 

  

[*]    

   Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.

LEASE

WILSON MENLO PARK CAMPUS, LLC,

a Wisconsin limited liability company

Landlord,

and

FACEBOOK, INC.,

a Delaware corporation

Tenant


TABLE OF CONTENTS

 

         page  

1.

 

USE AND RESTRICTIONS ON USE

     3   

2.

 

TERM

     5   

3.

 

RENT

     5   

4.

 

ADDITIONAL RENT

     5   

5.

 

SECURITY DEPOSIT

     7   

6.

 

ALTERATIONS

     7   

7.

 

REPAIR

     8   

8.

 

LIENS

     9   

9.

 

ASSIGNMENT AND SUBLETTING

     10   

10.

 

INDEMNIFICATION

     10   

11.

 

INSURANCE

     11   

12.

 

WAIVER OF SUBROGATION

     12   

13.

 

SERVICES AND UTILITIES

     12   

14.

 

HOLDING OVER

     12   

15.

 

SUBORDINATION

     12   

16.

 

RULES AND REGULATIONS

     13   

17.

 

REENTRY BY LANDLORD

     13   

18.

 

DEFAULT

     13   

19.

 

REMEDIES

     15   

20.

 

BUSINESS DAYS

     17   

21.

 

QUIET ENJOYMENT

     17   

22.

 

CASUALTY

     17   

23.

 

EMINENT DOMAIN

     18   

24.

 

SALE BY LANDLORD

     19   

25.

 

ESTOPPEL CERTIFICATES

     19   

26.

 

SURRENDER OF PREMISES

     20   

27.

 

NOTICES

     20   

28.

 

TAXES PAYABLE BY TENANT

     20   

29.

 

DEFINED TERMS AND HEADINGS

     20   

30.

 

REPRESENTATIONS

     21   

31.

 

FINANCIAL STATEMENTS AND CREDIT REPORTS

     21   

32.

 

COMMISSIONS

     21   

33.

 

TIME AND APPLICABLE LAW

     22   

34.

 

SUCCESSORS AND ASSIGNS

     22   

35.

 

ENTIRE AGREEMENT; SEVERABILITY

     22   

36.

 

EXAMINATION NOT OPTION

     22   

37.

 

RECORDATION

     22   

38.

 

OPTION TO RENEW

     22   

 

i


TABLE OF CONTENTS

(continuation)

 

         page  

39.

 

OPTIONS TO PURCHASE

     24   

40.

 

RIGHT OF FIRST OFFER TO PURCHASE

     25   

41.

 

TENANT’S SECURITY SYSTEM

     26   

42.

 

CONFIDENTIALITY PROVISIONS

     26   

43.

 

FITNESS CENTER

     27   

44.

 

GENERATOR

     27   

45.

 

SATELLITE DISH

     28   

46.

 

SIGNAGE

     28   

47.

 

FURNITURE

     28   

48.

 

WAIVER OF LANDLORD’S LIEN

     28   

49.

 

LIMITATION OF TENANT’S LIABILITY

     28   

50.

 

LIMITATION OF LANDLORD’S LIABILITY

     29   

51.

 

JAMS ARBITRATION

     29   

EXHIBIT A-1 – THE PREMISES

EXHIBIT A-2 – LEGAL DESCRIPTION OF THE PROJECT

EXHIBIT B – TENANT IMPROVEMENTS

EXHIBIT C – RULES AND REGULATIONS

EXHIBIT D – FORM OF PURCHASE AGREEMENT

EXHIBIT E – FORM OF ACKNOWLEDGEMENT AGREEMENT

EXHIBIT F – PROJECT PROPERTY INSURANCE

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

ii


SINGLE TENANT INDUSTRIAL NET LEASE

REFERENCE PAGES

 

BUILDING:   

Collectively, the nine (9) buildings located at the Project (defined below) and located at 10, 11, 12, 14, 15, 16, 17, 18 and 19 Network Circle, Menlo Park, California as depicted on Exhibit A-1 .

 

The Buildings are sometimes collectively referred to herein as the “Buildings” or the “Building.”

PROJECT:    That certain real property located in Menlo Park, California consisting of approximately 56.908 acres of land being more particularly described on Exhibit A-2 attached hereto together with the Buildings and any other improvements located thereon.
LANDLORD:    WILSON MENLO PARK CAMPUS, LLC, a Wisconsin limited liability company
LANDLORD’S ADDRESS:   

c/o RREEF

101 California Street, 26th Floor

San Francisco, California 94111

Attn: Asset Manager

 

With a copy to:

 

RREEF

875 N. Michigan Avenue, 41st floor

Chicago, IL 60611

Attn: Portfolio Manager

 

With a copy to:

 

SSL Law Firm, LLP

575 Market Street, Suite 2700

San Francisco, California 94105

Attn: Pamela A. Lakey, Esq.

WIRE INSTRUCTIONS AND/OR ADDRESS FOR RENT PAYMENT:   

Wilson Menlo Park Campus, a Property of Wilson

Menlo Park Campus LLC

[Intentionally omitted]

TENANT:   

FACEBOOK, INC.,

a Delaware corporation

TENANT’S NOTICE ADDRESS:   

1050 Page Mill Road

Palo Alto, California 94304

Attn: Real Estate Counsel

with a copy to:   

1050 Page Mill Road

Palo Alto, California 94304

Attn: Director of Real Estate

and a copy to:   

Paul, Hastings, Janofsky & Walker LLP

55 Second Street, 24th Floor

San Francisco, California 94105

Attn: Stephen Berkman, Esq.

 

1


BUILDING RENTABLE AREA:    Approximately 1,022,009 rentable square feet (for outline of Premises see Exhibit A-1 )
PERMITTED USE:    General office use and legal related ancillary uses including computer labs, training facilities, classrooms, duplicating photographic reproduction and/or offset printing facilities, mailroom facilities, storage of equipment, records, files and other similar items, server rooms, bar, cafeteria for food preparation and service, laundry services and other uses permitted by Regulations.
COMMENCEMENT DATE:    February 7, 2011
TERM OF LEASE:    Approximately fifteen (15) years, beginning on the Commencement Date and ending on the Termination Date, as such Term may be extended pursuant to the Lease.
TERMINATION DATE:    February 6, 2026
ANNUAL RENT and MONTHLY INSTALLMENT OF RENT (Article 3):   

 

Period

   Rentable  Square
Footage
   Annual Rent    Annual Rent      Monthly Installment
of Rent

from

  

through

      Per Square Foot      

2/7/2011

   2/6/2012    1,022,009    $10.80    $ 11,037,697.20       $919,808.10

2/7/2012

   2/6/2013    1,022,009    $13.80    $ 14,103,724.20       $1,175,310.35

2/7/2013

   2/6/2014    1,022,009    $15.60    $ 15,943,340.40       $1,328,611.70

2/7/2014

   2/6/2015    1,022,009    $16.07    $ 16,423,684.63       $1,368,640.39

2/7/2015

   2/6/2016    1,022,009    $16.55    $ 16,914,248.95       $1,409,520.75

2/7/2016

   2/6/2017    1,022,009    $17.05    $ 17,425,253.45       $1,452,104.45

2/7/2017

   2/6/2018    1,022,009    $17.56    $ 17,946,478.04       $1,495,539.84

2/7/2018

   2/6/2019    1,022,009    $18.09    $ 18,488,142.81       $1,540,678.57

2/7/2019

   2/6/2020    1,022,009    $18.63    $ 19,040,027.67       $1,586,668.97

2/7/2020

   2/6/2021    1,022,009    $19.19    $ 19,612,352.71       $1,634,362.73

2/7/2021

   2/6/2022    1,022,009    $19.77    $ 20,205,117.93       $1,683,759.83

2/7/2022

   2/6/2023    1,022,009    $20.36    $ 20,808,103.24       $1,734,008.60

2/7/2023

   2/6/2024    1,022,009    $20.97    $ 21,431,528.73       $1,785,960.73

2/7/2024

   2/6/2025    1,022,009    $21.60    $ 22,075,394.40       $1,839,616.20

2/7/2025

   2/6/2026    1,022,009    $22.25    $ 22,739,700.25       $1,894,975.02

 

SECURITY DEPOSIT:

  None

ASSIGNMENT/SUBLETTING FEE:

  N/A

REAL ESTATE BROKER:

  None

The Reference Pages information is incorporated into and made a part of the Lease. In the event of any conflict between any Reference Pages information and the Lease, the Lease shall control. The Lease includes Exhibits A through F , all of which are made a part of the Lease.

 

2


LEASE

By this Lease Landlord leases to Tenant and Tenant leases from Landlord the Project as set forth and described on the Reference Pages (the “Premises”). The Reference Pages, including all terms defined thereon, are incorporated as part of this Lease. The Premises are demised and let subject to (i) the existing state of title of any of the Premises, including all covenants, restrictions, reservations, liens, conditions and easements and other encumbrances of records as of the Commencement Date (collectively, “Permitted Encumbrances”), (ii) any state of facts which an accurate survey or physical inspection of the Premises might show as of the Commencement Date, (iii) all Regulations (defined below), and (iv) the condition of the Premises as of the Commencement Date, without representation or warranty by Landlord. Landlord and Tenant acknowledge and agree that pursuant to certain permits issued by the California Department of Transportation (“CalTrans”), the Project has use of a tunnel connecting the Project to certain real property located south of Highway 84 (the “Tunnel”). Throughout the Term, Tenant shall have use of the Tunnel, subject to any terms, conditions and limitations imposed by CalTrans and any Regulations on such use of the Tunnel. None of Landlord, the Landlord Entities and any parties claiming by or through Landlord or any of the Landlord Entities shall have the right to use the Tunnel during the Term.

1. USE AND RESTRICTIONS ON USE.

1.1 The Premises are to be used solely for the Permitted Use. Tenant shall not allow the Premises to be used for any unlawful purpose or commit any waste. Tenant shall comply with all federal, state and city laws, codes, ordinances, rules and regulations (collectively, “Regulations”) applicable to the use of the Premises and its occupancy, or to the use, manner of use, occupancy, possession, operation, maintenance, alteration, repair or restoration of any of the Premises and with any easement agreement, covenants, restrictions and conditions, declarations, licenses and other agreements listed as Permitted Encumbrances or as may hereafter affect the Premises (collectively, “Easement Agreements”) even if compliance therewith necessitates structural changes or improvements or results in interference with the use or enjoyment of any of the Premises and shall promptly comply with all governmental orders and directions for the correction, prevention and abatement of any violations in the Building or appurtenant land, caused or permitted by, or resulting from the use by, Tenant, or in or upon, or in connection with, the Premises, all at Tenant’s sole expense. Neither Landlord nor Tenant shall alter, modify, amend or terminate any Easement Agreement, give any consent or approval thereunder, or enter into any new Easement Agreement without, in each case, the prior written consent of the other party, which consent shall not be unreasonably withheld, conditioned or delayed. Tenant shall not be bound by any alterations, modification or amendments to any Easement Agreement or any new Easement Agreements entered into without Tenant’s consent. Landlord hereby acknowledges that Tenant may desire from time to time during the Term to apply for entitlements, seek rezoning, or otherwise endeavor to negotiate agreements with the governmental entities having jurisdiction over the Project, including seeking modifications to the current conditional development permit issued by the City of Menlo Park necessary to increase the number of employees and/or vehicle trips allowed on the Premises (collectively, the “Entitlements”). Tenant shall obtain any Entitlements at Tenant’s sole cost and expense, subject to the limitations set forth herein. Tenant shall notify Landlord in writing of any Entitlements that Tenant intends to seek for the Project, and thereafter Tenant shall keep Landlord apprised in writing of the status of its efforts in this regard on a reasonably regular basis (and in no event less frequently than every ninety (90) days during any time that Tenant is seeking Entitlements hereunder). Tenant shall not seek any Entitlements or modifications to any Entitlements which will have a material adverse effect on the value of the Project without Landlord’s consent not to be unreasonably withheld, conditioned or delayed; provided, that, Landlord hereby consents to modifications to the current conditional development permit issued by the City of Menlo Park necessary to increase the number of employees and/or vehicle trips allowed on the Premises (including approving any mitigation measures or conditions of approval in connection therewith). Landlord shall respond to any such request for consent within ten (10) business days after receipt of request. If Landlord fails to respond within such ten (10) business day period, then Tenant may deliver a second written notice to Landlord requesting such consent which notice shall state in bold and all caps, “ LANDLORD’S FAILURE TO RESPOND TO THIS NOTICE WITHIN FIVE (5) BUSINESS DAYS SHALL BE DEEMED TO BE LANDLORD’S CONSENT TO THE MATTERS SET FORTH HEREIN .” If Landlord fails to respond to such second written notice within five (5) business days after receipt thereof, then Landlord shall be deemed to have consented to such request. Landlord shall reasonably cooperate with Tenant to execute any applications for permits or approvals or other documents or consents related to the Entitlements (such as development agreements) reasonably required by Tenant in connection with modifying any existing Entitlements or seeking new Entitlements to the extent permitted hereunder; provided that such cooperation shall be at no cost or expense to Landlord or any Landlord Entities. Tenant shall promptly notify Landlord in writing of any Entitlements obtained by Tenant with respect to the Project. Landlord shall not modify any Entitlements or enter into any new Entitlements in any manner during the Term without the prior written consent of Tenant to be granted or withheld in Tenant’s sole and absolute discretion.

 

3


Tenant covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, that this Lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any persons or group of persons, on account of race, color, creed, marital status, ancestry, religion, sex, or national origin, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment, of the Premises herein leased, nor shall the Tenant himself, or any person claiming under or through him, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, occupancy, or tenants, sublessees, subtenants, or vendees in the Premises of herein leased.

Reference is made to Section II.C.2 of that certain San Francisco Bay Conservation and Development Commission Permit No. 26-78 issued on December 1, 1978, as amended through October 20, 1994 (AMENDMENT NO. FIVE) and recorded in the Official Records of the County of San Mateo as document number 94-170831 (the “BCDC Permit”), which BCDC Permit requires express reference in this Lease, including specific reference to the public access provisions (including, without limitation, Section I.A.3, II.B, and III. B) and the parking provisions (including, without limitation, Section I.A.8, II.B.4 and III.B) thereof.

1.2 Tenant shall not, and shall not direct, suffer or permit any of its agents, contractors, employees, licensees or invitees (collectively, the “Tenant Entities”) to at any time use, store, generate, treat, discharge, disburse, handle, manufacture, transport or dispose of (collectively, “Handle”) in or about the Project (collectively, “Hazardous Materials”) flammables, explosives, radioactive materials, hazardous wastes or materials, toxic wastes or materials, or other similar substances, petroleum products or derivatives or any substance subject to regulation by or under any federal, state and local laws and ordinances relating to the protection of the environment or the keeping, use or disposition of environmentally hazardous materials, substances, or wastes, presently in effect or hereafter adopted, all amendments to any of them, and all rules and regulations issued pursuant to any of such laws or ordinances (collectively, “Environmental Laws”) in any manner not fully in compliance with all Environmental Laws, in, on or about the Project; provided that Tenant shall always Handle any such Hazardous Materials in a safe and lawful manner and never allow such Hazardous Materials to contaminate the Project or appurtenant land or the environment. Tenant shall protect, defend, indemnify and hold each and all of the Landlord Entities (as defined in Article 29) harmless from and against any and all loss, claims, liability or costs (including court costs and attorney’s fees) incurred by reason of any actual or asserted failure of Tenant to fully comply with all applicable Environmental Laws with respect to the Project, or the presence, Handling, use or disposition in or from the Premises during the Term of any Hazardous Materials by Tenant or any Tenant Entity (even though permissible under all applicable Environmental Laws or the provisions of this Lease), or by reason of any actual or asserted failure of Tenant to keep, observe, or perform any provision of this Section 1.2. Tenant shall provide Landlord a copy of any Material Safety Data Sheet (MSDS) and any other permits, applications or written responses completed in connection with Tenant’s or any Tenant Entity’s Handling of Hazardous Materials at, on our about the Project and prepared by or on behalf of Tenant and furnished to applicable governmental agencies as required by or otherwise in compliance with any applicable Regulations.

1.3 Subject to the terms of Article 17, upon prior written notice from Landlord, Tenant shall permit such persons as Landlord may designate from time to time (“Site Reviewers”) to visit the Premises, once per year or at any other time that Landlord, in its sole discretion, reasonably believes that the Premises or the Project have become contaminated with Hazardous Materials that must be removed under applicable Regulations or otherwise in breach of the provisions of this Lease (each, an “Environmental Violation”), and perform environmental site investigations and assessments (“Site Assessments”) on the Premises for the purpose of determining whether there exists any Environmental Violation or any condition which could result in any Environmental Violation. Such Site Assessments may include both above and below the ground testing for Environmental Violations and such other tests as may be necessary, in the opinion of the Site Reviewers, to conduct the Site Assessments. Tenant shall supply to the Site Reviewers such historical and operational information regarding the Premises as may be reasonably requested by the Site Reviewers to facilitate the Site Assessments, and shall make available for meetings with the Site Reviewers appropriate personnel having knowledge of such matters. The cost of performing any Site Assessment that reveals any Environmental Violation shall be paid by Tenant within thirty (30) days following Landlord’s written demand, together with reasonable supporting documentation of such cost and any other Site Assessments performed by Landlord shall be at Landlord’s sole cost and expense and in the event of any Environmental Violation by Tenant, Tenant shall, at Tenant’s sole cost and expense, promptly perform any required or necessary investigation, repair, cleanup, or detoxification of the Premises and the Project to bring the same to its condition prior to the occurrence of the Environmental Violation, but in no event less than good condition.

 

4


2. TERM.

2.1 The Term of this Lease shall begin on the date as shown on the References Pages as the Commencement Date (“Commencement Date”), and shall terminate on the date as shown on the Reference Pages as the Termination Date (“Termination Date”), unless sooner terminated by the provisions of this Lease.

2.2 Tenant shall be deemed to have accepted possession of the Premises in its “as is” condition and configuration as of the Commencement Date. Tenant hereby acknowledges and agrees that the Commencement Date shall not be delayed for any reason, including but not limited to, any holding over by prior occupants, and no such holding over shall subject Landlord to any liability for any loss or damage resulting therefrom.

2.3 This is a net lease and all rent and other charges payable hereunder shall be paid without notice or demand, set off, counterclaim, recoupment, abatement, suspension, deferment, diminution, deduction, reduction or defense except as expressly set forth herein.

3. RENT .

3.1 Tenant agrees to pay to Landlord the Annual Rent in effect from time to time by paying the Monthly Installment of Rent then in effect on or before the first day of each full calendar month during the Term, except that the first month’s rent shall be paid upon the execution of this Lease. The Monthly Installment of Rent in effect at any time shall be one-twelfth (1/12) of the Annual Rent in effect at such time. Rent for any period during the Term which is less than a full month shall be a prorated portion of the Monthly Installment of Rent based upon the number of days in such month. Said rent shall be paid to Landlord, without deduction or offset and without notice or demand, at the Rent Payment Address, as set forth on the Reference Pages, or to such other person or at such other place as Landlord may from time to time designate in writing. Unless specified in this Lease to the contrary, all amounts and sums payable by Tenant to Landlord pursuant to this Lease shall be deemed additional rent.

3.2 Tenant recognizes that late payment of any rent or other sum due under this Lease will result in administrative expense to Landlord, the extent of which additional expense is extremely difficult and economically impractical to ascertain. Tenant therefore agrees that if rent or any other sum is not paid when due and payable pursuant to this Lease, such late payment will accrue interest at the rate of five percent (5%) plus the Prime Rate (as hereinafter defined) per annum from the date due until paid; provided however, that the foregoing interest shall not apply to the first such late payment in any twelve (12) month period of the Term of this Lease until following written notice to Tenant and the expiration of five (5) days thereafter without cure. The provisions of this Section 3.2 in no way relieve Tenant of the obligation to pay rent or other payments on or before the date on which they are due, nor do the terms of this Section 3.2 in any way affect Landlord’s remedies pursuant to Article 19 of this Lease in the event said rent or other payment is unpaid after date due. For purposes hereof, the “Prime Rate” shall be the per annum interest rate publicly announced by Bank of America as its prime or base rate (or, if Bank of America ceases to exist or to announce a prime or base rate, the prime or base rate of another national banking association).

4. ADDITIONAL RENT .

4.1 Tenant shall pay as additional rent the following: (a) Landlord’s costs and expenses of maintaining the insurance as set forth in Section 11.4 below (“Insurance Costs”), (b) all Taxes (defined below) incurred on the Project during the Term, and (c) a property management fee equal to $50,000 per Lease Year (the “Management Fee”). Notwithstanding the foregoing, Tenant shall only be liable to reimburse Landlord for Insurance Costs to the extent Landlord’s insurance is in commercially reasonable amounts and of types of insurance coverage, consistent with Landlord’s investment manager’s standard risk management program and which at the time is usual and commonly obtained by institutional landlords with respect to properties similar in type of project size, nature, use and location to the Project. “Taxes” shall be defined as real estate taxes and any other taxes, charges and assessments which are levied with respect to the Project or the land appurtenant to the Project, or with respect to any improvements, fixtures and equipment or other property of Landlord including the Tenant Improvements, real or personal, located in the Project and used in connection with the operation of the Project and said land, any payments to any ground lessor in reimbursement of payments of Taxes made by such lessor. For purposes of this Lease, each fiscal year (as determined by Landlord from time to time) falling partly or wholly within the Term shall be a “Lease Year.” Taxes shall not include any corporate franchise, or estate, inheritance or net income tax, or documentary transfer tax (unless such taxes are in lieu of or a substitute for any other tax, assessment or other charge upon or with respect to the Premises which, if it were in effect, would be payable by Tenant under the provisions hereof or by the terms of such tax, assessment or other charge), or any taxes to be paid by Tenant pursuant to Article 28.

 

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4.2 On or before the commencement of each Lease Year, Landlord shall provide to Tenant Landlord’s good faith written estimate of the monthly installment of Insurance Costs and Taxes payable under Section 4.1 for such Lease Year or portion thereof. Landlord will give Tenant written notification of the amount of such estimate and Tenant agrees that it will pay, concurrently with Tenant’s payment of each Monthly Installment of Rent due in such Lease Year, additional rent equal to one-twelfth (1/12 th ) of the amount of such estimate and $4,166.66 per month for the Management Fee. Within ninety (90) days after the end of each Lease Year, Landlord shall deliver a written notice to Tenant setting forth the actual determination of Tenant’s liability for Taxes and Insurance Costs in the previous Lease Year and when Tenant is so notified in writing, then:

4.2.1 If the total additional rent Tenant actually paid pursuant to Section 4.2 is less than the actual Taxes and Insurance Costs, then Tenant shall pay to Landlord as additional rent in one lump sum within thirty (30) days of receipt of Landlord’s bill therefor such deficiency; and

4.2.2 If the total additional rent Tenant actually paid pursuant to Section 4.2 is more than the actual Taxes and Insurance Costs, then Landlord shall credit the difference against the then next due payments to be made by Tenant under this Article 4, or, if this Lease has terminated, refund the difference in cash.

4.3 If the Commencement Date is other than January 1 or if the Termination Date is other than December 31, Tenant’s liability for Taxes and Insurance Costs and the Management Fee for the year in which said date occurs shall be prorated based upon a three hundred sixty-five (365) day year. Even though the Term has expired and Tenant has vacated the premises, when the final determination is made of the actual Taxes and Insurance Costs for the year in which this Lease terminated, Tenant shall pay any difference due over the estimated Taxes and Insurance Costs paid; and conversely any overpayment, less any amounts due Landlord under this Lease, shall be rebated to Tenant.

4.4 Tenant shall, before interest or penalties are due thereon, pay and discharge all charges for (a) any Easement Agreement or other agreements maintained for the benefit of any of the Premises during the Term, (b) all assessments and levies, all sewer, permit, inspection and license fees, all rents and charges for water, sewer, utility and communication services relating to the any of Premises during the Term, all other public charges whether of a like or different nature, even if unforeseen or extraordinary, imposed upon or assessed against (i) Tenant, (ii) Tenant’s leasehold interest in the Project, (iii) any of the Project, and (iv) Landlord as a result of or arising in respect of the ownership, occupancy, use or possession of any of the Project or any activity conducted on, in or about any of the Project (collectively, the “Impositions”). Impositions shall not include any costs incurred by Landlord related to the sale, financing or ground leasing of the Project or any portion thereof by Landlord.

4.5 In addition to Tenant’s payment of Taxes, Insurance Costs, the Management Fee and Impositions hereunder, Tenant shall pay and discharge, as additional rent, any costs, expenses and fees of Tenant and Landlord which are incurred in connection or associated with any act undertaken by Landlord at the request of Tenant within thirty (30) days of demand together with reasonable supporting documentation; provided, that, (i) this Section 4.5 shall not supersede any other express provision of this Lease regarding reimbursement of costs incurred by Landlord (e.g. Section 6.2 regarding reimbursement of Review Fees (as hereinafter defined)) and (ii) Landlord shall provide Tenant at least ten (10) days advance notice that Landlord intends to incur costs, expenses or fees as the result of any act undertaken at the request of Tenant, which costs, expenses or fees Landlord intends to seek reimbursement for under this Section 4.5 and Tenant may elect that Landlord not undertake the act in question or incur the applicable costs, expenses or fees.

4.6 During the Term, Tenant may review, at Tenant’s sole cost and expense, the books and records supporting Landlord’s determination of actual Taxes and Insurance Costs for any Lease Year in an office of Landlord or Landlord’s agent, during normal business hours, upon giving Landlord at lease five (5) days advance written notice, subject to execution of a commercially reasonable confidentiality agreement. If Landlord and Tenant determine that actual Taxes or Insurance Costs for the Project for the year in question were less than stated by more than five percent (5%), Landlord, within thirty (30) days after its receipt of invoices therefor from Tenant, shall reimburse Tenant for the reasonable amounts paid by Tenant to third parties in connection with such review by Tenant.

4.7 Tenant, at its sole cost, will have the exclusive right, at any time during the Term, to seek a reduction in the assessed valuation of the Premises for tax assessment purposes and/or any increase in the tax rate applicable to the Premises. If Tenant elects to contest the Taxes, Tenant may provide Landlord notice from time to time in writing (a “Tax Dispute Notice”) of any such disputed matters. In such event, Landlord will pay the Taxes under protest. Landlord will appoint Tenant as its agent for the purpose of obtaining information and other data from the County or City assessor and instituting and maintaining any proceeding or contest of Taxes. Landlord will not be required to join in any proceeding or contest brought by Tenant, unless the provisions of any Regulations require that the proceeding or contest be brought by or

 

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in the name of Landlord or owner of the Premises, in which case, Landlord shall use commercially reasonable efforts to contest those matters set forth in the applicable Tax Dispute Notice on behalf of Tenant. Upon reasonable request from Tenant, Landlord shall furnish, on a timely basis, such data, documents, information and assistance and make such appearances as may be reasonably required by Tenant. After the effective date of any reduction in value or tax rate applicable to the Premises, Tenant will be entitled to pay Taxes based on such reduced valuation or tax rate in accordance with the terms of this Lease. Tenant shall have the right to settle or compromise any such contest through negotiations. Tenant shall pay any and all losses, judgments, decrees and costs and expenses in connection with any such contest and shall, promptly after the final determination of such contest, fully pay and discharge the amounts which shall be levied, assessed, charged or imposed or be determined to be payable therein or in connection therewith, together with all penalties, fines, interest, costs and expenses thereof or in connection therewith, and perform all acts the performance of which shall be ordered or decreed as a result thereof. Tenant shall reimburse Landlord within thirty (30) days of invoice together with reasonable supporting documentation for all costs and expenses reasonably incurred by Landlord in contesting such matters. During the Term, Landlord shall not settle any appeal or other proceeding regarding any tax dispute without obtaining Tenant’s prior written approval, which approval shall not be unreasonably withheld, conditioned or delayed. Landlord shall deliver a copy of real estate tax bills or notifications of valuation increases to Tenant promptly after receipt of same by Landlord. No such contest shall subject Landlord to the risk of any civil or criminal liability.

4.8 If, by law, Landlord may elect to cause any special assessment applicable to the Project to be paid in installments (whether or not interest accrues on the unpaid balance), at Tenant’s option, Landlord shall so elect to cause such special assessment to be paid in installments as they become due.

4.9 Notwithstanding anything herein to the contrary, and subject to the terms of this Section 4.9, Tenant shall not be required to pay in any Lease Year during the first ten (10) years of the initial Term, any increase in Taxes caused by any change of ownership (within the meaning of Sections 60 and 61, Division 1, Chapter 2 of the California Revenue and Taxation Code or any successor provision) of all or any portion of the Project (a “Prop 13 Event”) that occurs after the Commencement Date and before the expiration of the tenth (10th) Lease Year. Commencing on the first day of the eleventh (11th) Lease Year, Tenant shall be obligated to pay the full amount of any and all increases in Taxes resulting from a Prop 13 Event (including a Prop 13 Event that occurred during the first ten (10) Lease Years of the initial Term). For purposes of this Section, any increase in Taxes that results from a statutory annual inflationary increase in Taxes shall not be deemed to be caused by a Prop 13 Event. The terms of this Section apply only to any increase in Taxes which occurs as a result of a Prop 13 Event (subject to the terms of this Section) and not to any other increases in Taxes.

5. SECURITY DEPOSIT. [INTENTIONALLY OMITTED]

6. ALTERATIONS .

6.1 Except as provided for in Exhibit B to this Lease and as otherwise set forth herein, Tenant shall not (i) demolish any Building, (ii) construct or install upon the Premises any new building or (iii) make or suffer to be made any alterations, additions, or improvements, including, but not limited to, the attachment of any fixtures or equipment in, on, or to the Premises or any part thereof that (a) materially and adversely affect any Building system (including, without limitation, mechanical, electrical system, heating, ventilating and air conditioning systems, fire protection and other life safety systems (including sprinklers and smoke detectors) or plumbing systems); provided, that, any replacement of any Building systems with new Building systems of equal or greater functionality as the existing Building system shall not be deemed to have a material or adverse effect on such Building system, (b) materially and adversely affect the foundation, slab, load bearing walls or other structural portions of the Building, or the structural portions of any roof, including any roof replacement, or (c) trigger any environmental remediation work at or about the Project (each of the foregoing, a “Major Alterations”) without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Any alteration, addition, or improvement that does not constitute a Major Alteration hereunder shall be hereinafter referred to as a “Minor Alteration”. Landlord’s consent shall not be required for any Minor Alteration. When applying for consent to a Major Alteration, Tenant shall, if requested by Landlord, furnish complete plans and specifications for the same. In addition, upon completion, Tenant shall furnish to Landlord as-built plans and specifications for any non-cosmetic Minor Alterations that require a permit or other governmental approval or for which such plans and specifications are required due to the nature of the work being performed. Landlord shall respond to Tenant in writing within ten (10) business days after receipt of Tenant’s request for consent to a Major Alteration. If Landlord fails to respond to any such request within ten (10) business day period set forth above, Tenant shall have the right to provide Landlord with a second request. Tenant’s second request must specifically state that Landlord’s failure to respond within a period of five (5) additional business days shall be deemed to be an approval by Landlord of the proposed Major Alteration. If Landlord’s failure to respond continues for an additional five (5) days after its receipt of Tenant’s second request, the proposed Major Alteration for which Tenant has requested such consent shall be deemed to have been

 

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approved by Landlord. If Landlord proposes changes in response to any request for a Major Alteration, then upon resubmission of plans and specifications for such Major Alteration, Landlord shall have five (5) business days to approve or reasonably disapprove the proposed Major Alteration. Landlord’s failure to respond within such five (5) business day period shall be deemed to be Landlord’s approval of the proposed Major Alteration.

6.2 Any alterations, additions, or improvements to the Project made by or on behalf of Tenant shall be made using a contractor selected by Tenant in its sole and absolute discretion at Tenant’s sole cost and expense. Tenant shall reimburse Landlord for any reasonable third-party costs actually incurred by Landlord in connection with the review and approval of any Major Alteration (“Review Fees”) not to exceed one-half percent (0.5%) of the cost of such Major Alteration, with all such amounts being due thirty (30) days after Landlord’s demand together with reasonable supporting documentation. Notwithstanding the foregoing, Tenant shall not be required to reimburse Landlord for any Review Fees incurred in connection with the Tenant Improvements (as defined in the Work Letter attached hereto). All alterations, additions or improvements to the Premises, including Major Alterations made by Tenant (collectively, “Alterations”) shall be constructed in accordance with all Regulations, and Tenant shall, prior to construction of any Major Alterations, provide the additional insurance required under Article 11.

6.3 Tenant, at Tenant’s sole cost and expense, shall be required to remove the following items from the Premises upon the expiration or earlier termination of this Lease (and to repair any damage to the Premises resulting from such removal): (i) signage installed by Tenant, (ii) Tenant’s furniture, fixtures, equipment and other movable personal property (“Tenant’s Personal Property”), (iii) any Dish/Antennae (as hereinafter defined) installed by Tenant, (iv) any Tenant’s Security System (as hereinafter defined) installed by Tenant, (v) any cabling installed by Tenant (collectively, the “Required Removables”). Other than the Required Removables, upon the expiration or earlier termination of this Lease, Tenant shall have no obligation to remove any Alterations installed or constructed in, on or about the Premises.

6.4 If Tenant makes any Alterations pursuant to this Article 6 or as required by Article 7, whether or not Landlord’s consent is required, then (a) all such Alterations shall be performed by Tenant in a good and workmanlike manner, (b) all such Alterations shall be completed in compliance with all Regulations, (c) all such Alterations shall comply with the insurance requirements of Tenant set forth in Article 11, (d) Tenant shall promptly discharge or remove all liens filed against any of the Premises arising out of such Alterations, (e) Tenant shall procure and pay for all permits and licenses required in connection with any such Alterations, and (f) all such Alterations shall be the property of Landlord and shall be subject to this Lease as a portion of the Premises.

7. REPAIR .

7.1 Landlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Premises. By being in possession of the Premises, Tenant has accepted them as being in good order, condition and repair and in the condition in which Landlord is obligated to deliver them. It is hereby understood and agreed that no representations respecting the condition of the Premises have been made by Landlord to Tenant, except as specifically set forth in this Lease. Landlord shall not be liable for any failure to make any repairs or to perform any maintenance for any reason whatsoever.

7.2 Tenant shall, at its own cost and expense, keep and maintain all parts of the Premises in good condition, promptly making all necessary repairs and replacements, whether structural or non-structural, ordinary or extraordinary to keep the Premises in good condition (including, but not limited to, repair and replacement of the following as necessary to keep the same in good condition: roofs and roof membranes, foundations and load bearing walls of the Premises, all fixtures installed by or on behalf of Tenant, water heaters serving the Premises, windows, glass and plate glass, doors, exterior stairs, skylights, any office entries, interior walls and finish work, floors and floor coverings, heating and air conditioning systems, electrical systems and fixtures, sprinkler systems and other equipment, gores and vault spaces adjoining any of the Premises, dock boards, truck doors and dock bumpers). Tenant shall also be responsible for maintaining in good condition the exterior areas of the Project, including, without limitation, parking lots (including striping), driveways, landscaping, fountains, ponds, drains, plumbing work and fixtures, and performance of regular removal of trash and debris. Tenant shall bear the full cost of structural repairs and maintenance to preserve the Premises in good condition. Notwithstanding anything to the contrary set forth in this Lease, the following shall apply to any capital repairs or replacements to the Project (collectively, “Capital Items”): (i) Tenant shall perform all Capital Items, (ii) any Capital Items performed in the first ten (10) Lease Years of the Term shall be performed at Tenant’s sole cost and expense, (iii) any Capital Items performed after the first ten (10) Lease Years of the Term shall be subject to the following: (A) Tenant may perform the Capital Item at its sole cost and expense if Tenant so elects, (B) Tenant may elect to provide written notice (a “Capital Item Request Notice”) to Landlord of the necessity of such Capital Item and Tenant’s desire that Landlord share in the cost of such Capital Item in accordance with this Section 7.2, (C) within ten (10) business days after

 

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receipt of a Capital Item Request Notice, Landlord shall deliver written notice to Tenant electing to share in the cost of the Capital Item set forth in the Capital Item Request Notice in accordance with this Section 7.2 or declining to share in such costs (and Landlord’s failure to respond within such ten (10) business day period shall be deemed to be Landlord’s election not to share in the cost of such Capital Item), (D) if Landlord declines to share in the cost of such capital item, then Tenant shall have no obligation to perform such Capital Item (and notwithstanding anything to the contrary set forth herein, Tenant shall not be in default of this Lease or otherwise be liable to Landlord for failing to perform such Capital Item), and (E) if Landlord elects (or is deemed to have elected) to share in the cost of such Capital Item, then (I) the cost of the applicable Capital Item shall be amortized on a straight-line basis over its useful life, (II) upon completion of the applicable Capital Item, Landlord shall reimburse Tenant for the amortized cost of the applicable Capital Item to the extent in excess of the remaining Term of this Lease within thirty (30) days of invoice together with reasonable supporting documentation, and (III) if Tenant exercises any Renewal Option thereafter, then each month during the applicable Renewal Term, upon receipt of invoice, Tenant shall reimburse Landlord for the amortized cost of the applicable Capital Item for such month.

7.3 Except as expressly provided in Articles 22 and 23, there shall be no abatement of rent and no liability of Landlord by reason of any injury to or interference with Tenant’s business arising from the making of any repairs, alterations or improvements in or to any portion of the Project or to fixtures, appurtenances and equipment in the Project. Tenant hereby waives any and all rights under and benefits of subsection 1 of Section 1932 and Sections 1941 and 1942 of the California Civil Code, or any similar or successor Regulations or other laws now or hereinafter in effect.

7.4 Tenant shall, at Tenant’s sole cost and expense, procure and maintain regularly scheduled preventive maintenance/service contracts (copies of which shall be delivered to Landlord upon request), in form and substance approved by Tenant, for: (a) heating, air conditioning and ventilation equipment; (b) boiler, fired or unfired pressure vessels; (c) fire sprinkler and/or standpipe and hose or other automatic fire extinguishing systems, including fire alarm and/or smoke detection; (d) elevators; (e) landscaping and irrigation systems; (f) roof covering and drain maintenance; and (g) asphalt and parking lot maintenance. The term of any such service contracts shall not extend beyond the Term.

7.5 Tenant shall have a period of thirty (30) days from the date of written notice from Landlord within which to cure any failure to fulfill any of its obligations under this Article 7; provided, however, that if such failure is curable but cannot be cured within such thirty (30) day period, Tenant shall have such additional time as may be reasonably required to cure so long as Tenant commences such cure within the initial thirty (30) day period and diligently prosecutes such cure to completion. If Tenant fails to cure such failure as provided above, or in the event of an emergency which materially adversely affects all or any part of the Premises, Landlord may, at Landlord’s election, cure such failure at Tenant’s cost and expense, and the expenses thereof incurred by Landlord shall be reimbursed as additional rent within thirty (30) days after submission of a bill or statement therefore, together with reasonable supporting documentation.

7.6 LANDLORD LEASES AND WILL LEASE AND TENANT TAKES AND WILL TAKE THE PREMISES AS IS . TENANT ACKNOWLEDGES THAT LANDLORD (WHETHER ACTING AS LANDLORD HEREUNDER OR IN ANY OTHER CAPACITY) HAS NOT MADE AND WILL NOT MAKE, NOR SHALL LANDLORD BE DEEMED TO HAVE MADE, ANY WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE PREMISES, INCLUDING ANY WARRANTY OR REPRESENTATION AS TO (i) ITS FITNESS, DESIGN OR CONDITION FOR ANY PARTICULAR USE OR PURPOSE, (ii) THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN, (iii) THE EXISTENCE OF ANY DEFECT, LATENT OR PATENT, (iv) LANDLORD’S TITLE THERETO, (v) VALUE, (vi) COMPLIANCE WITH SPECIFICATIONS, (vii) LOCATION, (viii) USE, (ix) CONDITION, (x) MERCHANTABILITY, (xi) QUALITY, (xii) DESCRIPTION, (xiii) DURABILITY, (xiv) OPERATION, (xv) THE EXISTENCE OF ANY HAZARDOUS SUBSTANCE, HAZARDOUS CONDITION OR HAZARDOUS ACTIVITY OR (xvi) COMPLIANCE OF THE PREMISES WITH ANY REGULATIONS OR EASEMENT AGREEMENTS; AND ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY TENANT. TENANT ACKNOWLEDGES THAT THE PREMISES IS OF ITS SELECTION AND TO ITS SPECIFICATIONS AND THAT THE PREMISES HAS BEEN INSPECTED BY TENANT AND IS SATISFACTORY TO IT. IN THE EVENT OF ANY DEFECT OR DEFICIENCY IN ANY OF THE PREMISES OF ANY NATURE, WHETHER LATENT OR PATENT, LANDLORD SHALL NOT HAVE ANY RESPONSIBILITY OR LIABILITY WITH RESPECT THERETO OR FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING STRICT LIABILITY IN TORT). THE PROVISIONS OF THIS SECTION 7.6 HAVE BEEN NEGOTIATED, AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES BY LANDLORD, EXPRESS OR IMPLIED, WITH RESPECT TO ANY OF THE PREMISES, ARISING PURSUANT TO THE UNIFORM COMMERCIAL CODE OR ANY OTHER LAW NOW OR HEREAFTER IN EFFECT OR ARISING OTHERWISE.

 

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8. LIENS. Tenant shall keep the Project and appurtenant land and Tenant’s leasehold interest in the Premises free from any liens arising out of any services, work or materials performed, furnished, or contracted for by Tenant, or obligations incurred by Tenant. In the event that Tenant fails, within thirty (30) days following the imposition of any such lien, to either cause the same to be released of record or provide Landlord with insurance or bond against the same issued by a reputable national title insurance or bonding company, as applicable, or such other protection against the same as Landlord shall accept (such failure to constitute an Event of Default), Landlord shall have the right to cause the same to be released by such means as it shall deem proper, including payment of the claim giving rise to such lien. All such sums paid by Landlord and all expenses incurred by it in connection therewith shall be payable to it by Tenant within thirty (30) days of Landlord’s demand, together with reasonable supporting documentation. NOTICE IS HEREBY GIVEN THAT LANDLORD SHALL NOT BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO TENANT OR TO ANYONE HOLDING OR OCCUPYING ANY OF THE PREMISES THROUGH OR UNDER TENANT, AND THAT NO MECHANICS’ OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO ANY OF THE PREMISES. LANDLORD MAY AT ANY TIME, AND AT LANDLORD’S REQUEST TENANT SHALL PROMPTLY, POST ANY NOTICES ON THE PREMISES REGARDING SUCH NON-LIABILITY OF LANDLORD.

9. ASSIGNMENT AND SUBLETTING.

9.1 Tenant shall have the right to assign or pledge this Lease or to sublet all or any portion of the Premises whether voluntarily or by operation of law, or permit the use or occupancy of the Premises by anyone other than Tenant without the prior consent of Landlord. Tenant shall provide Landlord written notice of any assignment or subletting within thirty (30) days following the effective date thereof. Within thirty (30) days following the effective date of any sublease (other than the Permitted Sublease (as hereinafter defined)), Tenant shall execute and deliver and cause any subtenant to execute and deliver to Landlord an acknowledgement agreement in the form attached hereto as Exhibit E or other similar, commercially reasonable form acceptable to Landlord in its reasonable discretion.

9.2 Notwithstanding any assignment or subletting, permitted or otherwise, Tenant shall at all times remain directly, primarily and fully responsible and liable for the payment of the rent specified in this Lease and for compliance with all of its other obligations under the terms, provisions and covenants of this Lease. Upon the occurrence of an Event of Default, if the Premises or any part of them are then assigned or sublet, Landlord, in addition to any other remedies provided in this Lease or provided by law, may, at its option, collect directly from such assignee or subtenant all rents due and becoming due to Tenant under such assignment or sublease and apply such rent against any sums due to Landlord from Tenant under this Lease, and no such collection shall be construed to constitute a novation or release of Tenant from the further performance of Tenant’s obligations under this Lease.

9.3 Concurrent with the execution and delivery of this Lease, Tenant shall sublet Buildings 12, 14, 15 and 16 of the Premises to Oracle America Inc., a Delaware corporation (“Subtenant”), pursuant to the terms of that certain Sublease Agreement dated on or about the date hereof (the “Permitted Sublease”). Landlord acknowledges and agrees that Landlord has received a copy of the Permitted Sublease and reviewed the same. Landlord agrees that so long as Subtenant performs the obligations, covenants and agreements of Subtenant as set forth in the Permitted Sublease, Tenant shall not be deemed to be in default of the terms and conditions set forth in this Lease even in those instances where the terms and conditions set forth in the Sublease and this Lease may conflict; provided however, that the foregoing shall not be deemed to modify in any way Tenant’s obligation to pay any rent or other charges payable under this Lease or require Landlord to perform any of the obligations of Tenant as sublandlord under the Permitted Sublease.

10. INDEMNIFICATION. None of the Landlord Entities shall be liable and Tenant hereby waives all claims against them for any damage to any property or any injury to any person in or about the Premises by or from any cause whatsoever (including without limiting the foregoing, rain or water leakage of any character from the roof, windows, walls, basement, pipes, plumbing works or appliances, the Premises not being in good condition or repair, gas, fire, oil, electricity or theft), except to the extent caused by or arising from the gross negligence or willful misconduct of Landlord or its agents, employees or contractors. Except to the extent arising from the gross negligence or willful misconduct of Landlord, its agents, employees or contractors, Tenant shall protect, indemnify and hold the Landlord Entities harmless from and against any and all loss, claims, liability or costs (including court costs and attorney’s fees) incurred by reason of (a) any damage to any property (including but not limited to property of any Landlord Entity at or about the Premises) or any injury (including but not limited to death) to any person occurring in, on or about the Premises to the extent that such injury or damage shall be caused by or arise from any act, neglect, fault, or omission by or of Tenant or any Tenant Entity to meet any standards imposed by any duty with respect to the injury or damage; (b) the conduct or management of any work or thing whatsoever done by the Tenant in or about the Premises or from transactions of the Tenant concerning the Premises; or (c) Tenant’s failure to comply with any and all Regulations applicable to the condition or use of the Premises or its occupancy.

 

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Landlord shall protect, indemnify and hold the Tenant harmless from and against any and all loss, claims, liability or costs (including court costs and attorney’s fees) incurred by reason of any damage to any property or any injury (including but not limited to death) to any person occurring in, on or about the Premises to the extent that such injury or damage shall be caused by or arise from the negligence or willful misconduct of Landlord or any of Landlord’s agents, employees or contractors. The provisions of this Article shall survive the termination of this Lease with respect to any claims or liability accruing prior to such termination.

11. INSURANCE.

11.1 Tenant shall keep in force throughout the Term: (a) a Commercial General Liability insurance policy or policies (including coverage for any Fitness Center use without exclusion) with a limit of not less than $5,000,000 per occurrence and not less than $10,000,000 in the annual aggregate, covering bodily injury and property damage liability and $5,000,000 products/completed operations aggregate; (b) Business Auto Liability covering owned, non-owned and hired vehicles with a limit of not less than $2,000,000 per accident; (c) Worker’s Compensation insurance with limits as required by statute and Employers Liability with limits of $1,000,000 each accident, $1,000,000 disease policy limit, $500,000 disease – each employee; (d) All Risk or Special Form coverage protecting Tenant against loss of or damage to Tenant’s Personal Property to the full replacement value of the property so insured; (e) Business Interruption Insurance with limit of liability representing loss of at least approximately twelve (12) months of Tenant’s rental obligations hereunder.

11.2 The aforesaid policies shall (a) be provided at Tenant’s expense and (b) be issued by an insurance company with a minimum Best’s rating of “A-:VII” during the Term. Tenant’s Commercial General Liability policy shall name Landlord, Lender, Landlord’s investment manager and Landlord’s property manager as additional insureds. Tenant shall endeavor to cause the aforesaid policies to provide that said policies shall not be canceled unless ten (10) days prior written notice shall have been given to Landlord. A certificate of Liability insurance on ACORD Form 25 and a certificate of Property insurance on ACORD Form 27 shall be delivered to Landlord by Tenant upon the Commencement Date and upon renewal of said insurance. Tenant’s Commercial General Liability policy shall be primary and non-contributory. So long as the coverage afforded Landlord, the other additional insureds and any designees of Landlord shall not be reduced or otherwise adversely affected, all or part of Tenant’s insurance may be carried under a blanket policy covering the Premises and any other of Tenant’s locations, or by means of a so called “Umbrella” policy.

11.3 Whenever Tenant shall undertake to make any Alterations in, to or about the Premises and during the construction of the Tenant Improvements, the aforesaid insurance protection must extend to and include injuries to persons and damage to property arising in connection with such Alterations and the Tenant Improvements, without limitation including liability under any applicable structural work act. Whenever Tenant shall undertake to make any Major Alterations in, to or about the Premises and during the construction of the Tenant Improvements, Tenant shall maintain commercially reasonable Builder’s Risk insurance; and the policies of or certificates evidencing such insurance must be delivered to Landlord prior to the commencement of any such Major Alterations or prior to commencing the Tenant Improvements, as applicable.

11.4 Landlord shall keep in force throughout the Term: (a) a Commercial General Liability insurance policy or policies with a limit of not less than $5,000,000 per occurrence and not less than $10,000,000 in the annual aggregate, covering bodily injury and property damage liability and $5,000,000 products/completed operations aggregate; (b) Business Auto Liability covering owned, non-owned and hired vehicles with a limit of not less than $2,000,000 per accident; (c) Worker’s Compensation insurance with limits as required by statute and Employers Liability with limits of $1,000,000 each accident, $1,000,000 disease policy limit, $500,000 disease – each employee (“Landlord’s Liability Insurance”). Landlord shall have the right to make changes during the Term to the deductibles, endorsements, and/or amounts of Landlord’s Liability Insurance and the costs thereof shall also be included in Insurance Costs provided that such changes are and remain consistent with Landlord’s investment manager’s standard risk management program and such changes are and remain usual and commonly obtained by institutional landlords with respect to properties similar in type of project size, nature, use and location to the Project. Landlord’s insurance policies shall be issued by an insurance company with a minimum Best’s rating of “A-:VII” during the Term. A certificate of Liability insurance on ACORD Form 25 shall be delivered to Tenant by Landlord upon the Commencement Date and at least thirty (30) days prior to each renewal of said insurance.

11.5 In addition, Tenant shall keep in force throughout the Term insurance coverage for the Project (including the Buildings, Tenant Improvements and Alterations) protecting against loss of or damage to the Project (including the Buildings, Tenant Improvements and Alterations) in accordance with the minimum requirements of Exhibit F attached hereto (“Project Property Insurance”). If Tenant fails to carry Project Property Insurance, then Landlord shall have the right to procure the same and the costs thereof shall be paid by Tenant within thirty (30) days after demand together with

 

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reasonable supporting documentation. Not more often then every three (3) calendar years during the Term, Landlord and Tenant shall re-evaluate the minimum requirements set forth on Exhibit F attached hereto and shall make modifications thereto consistent with commercially reasonable insurance practices at the time of such re-evaluation. No modification shall be made to Exhibit F unless consistent with commercially reasonable insurance practices at the time of such re-evaluation as reasonably determined by both Landlord and Tenant.

12. WAIVER OF SUBROGATION. Tenant and Landlord hereby mutually waive their respective rights of recovery against each other for any loss to the extent such loss is covered by any policy of property insurance carried (or required to be carried pursuant to the terms and conditions of this Lease) for the benefit of the respective party. Each party shall obtain any special endorsements required by their insurer to evidence compliance with the aforementioned waiver.

13. SERVICES AND UTILITIES. Tenant shall procure and pay for all water, gas, heat, light, power, trash, recycling, landscape maintenance, parking lot sweeping and resurfacing, elevator, security, communications, janitorial, pest control, telephone, sewer, sprinkler system charges and other utilities and services used on or from the Premises, together with any taxes, penalties, and surcharges or the like pertaining thereto and any maintenance charges for utilities. Tenant shall furnish all electric light bulbs, tubes and ballasts, battery packs for emergency lighting and fire extinguishers. Landlord shall in no event be liable for any interruption or failure of utility services on or to the Premises. Notwithstanding the foregoing, except as provided in Article 12 to the contrary, Tenant shall not be required to waive any claims against Landlord (other than for any special or consequential damages and for loss or damage to Tenant’s business) where such interruption or failure in utility services is due solely to the gross negligence or willful misconduct of Landlord or any of its agents, contractors or employees.

14. HOLDING OVER.

14.1 Subject to Section 14.2 below, Tenant shall pay Landlord for each day Tenant retains possession of the Premises or part of them after termination of this Lease by lapse of time or otherwise at the rate (“Holdover Rate”) which shall be one hundred fifty percent (150%) of the amount of the Monthly Installment of Rent for the last period prior to the date of such termination plus all monthly additional rent payable under Section 4.1, prorated on a daily basis. If Landlord gives notice to Tenant of Landlord’s election to such effect, such holding over shall constitute renewal of this Lease for a period from month to month at the Holdover Rate, but if the Landlord does not so elect, no such renewal shall result notwithstanding acceptance by Landlord of any sums due hereunder after such termination; and instead, a tenancy at sufferance at the Holdover Rate shall be deemed to have been created. In any event, no provision of this Article 14 shall be deemed to waive Landlord’s right of reentry or any other right under this Lease or at law.

14.2 Notwithstanding anything to the contrary set forth in Section 14.1 above, so long as Tenant is not in default under this Lease beyond any applicable notice and cure period, Tenant shall have the right to holdover (the “Permitted Holdover”) in the Premises only for up to six (6) consecutive one-month periods, commencing as of the first calendar month immediately following the expiration of the then current Term, subject to the remaining terms of this Section 14.2, if Tenant delivers to Landlord prior written notice of Tenant’s intent to so occupy the Premises (“Tenant’s Holdover Notice”) on or before the date that is one hundred eighty (180) days prior to the expiration of the then current Term. Tenant’s Holdover Notice shall specify the period of time (not to exceed six (6) consecutive months) that Tenant shall holdover in the Premises in accordance with this Section 14.2 (the “Permitted Holdover Period”). If Tenant engages in a Permitted Holdover in accordance with this Section 14.2, then during the Permitted Holdover Period Tenant shall occupy the Premises in its as-is condition and configuration subject to all the terms and conditions of this Lease, provided that during the Permitted Holdover Period, Tenant shall pay rent at the rate which shall be one hundred twenty-five percent (125%) of the amount of the Monthly Installment of Rent for the last period prior to the date of such termination plus all monthly additional rent payable under Section 4.1, prorated on a daily basis,. If Tenant fails to timely deliver Tenant’s Holdover Notice as set forth above and holds over in the Premises or any portion thereof upon the expiration or earlier termination of this Lease or if Tenant engages in a Permitted Holdover and fails to vacate and surrender the Premises on or prior to expiration or earlier termination of the Permitted Holdover Period, Tenant shall be deemed in holdover of the Premises and such holdover shall be subject to the provisions of Section 14.1 above. Nothing herein shall grant Tenant the right to hold over or otherwise occupy the Premises at any time following the expiration or earlier termination of the Permitted Holdover Period.

15. SUBORDINATION. This Lease shall be subject and subordinate at all times to ground or underlying leases and to the lien of any mortgages or deeds of trust now or hereafter placed on, against or affecting the Project, Landlord’s interest or estate in the Project, or any ground or underlying lease (each, a “Mortgage”); provided, however, that if the lessor, mortgagee, trustee, or holder of any such mortgage or deed of trust (each, a “Lender”) elects to have Tenant’s interest in this Lease be superior to any such instrument, then, by notice to Tenant, this Lease shall be deemed superior, whether this Lease

 

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was executed before or after said instrument; provided, further, that Tenant’s agreement to subordinate this Lease to any Mortgage shall be subject to Tenant’s receipt of an SNDA Agreement (as hereinafter defined). An “SNDA Agreement” shall mean an agreement between Landlord, Tenant and Lender reasonably acceptable to Tenant, which provides, among other things, that, so long as Tenant is paying the rent due under the Lease and is not otherwise in default under the Lease beyond any applicable cure period, its right to possession and the other terms of the Lease shall remain in full force and effect. The SNDA Agreement may provide that (a) neither mortgagee nor any successor-in-interest shall be bound by (i) any payment of the Monthly Installment of Rent or additional rent or other sum due under this Lease for more than one (1) month in advance and (b) neither mortgagee nor any successor-in-interest will be liable for the return of any security deposit, except to the extent such deposits have been received by mortgagee. Any SNDA Agreement shall expressly provide that (i) upon any party succeeding to the interest of Landlord under this Lease, such party shall be liable for the payment of any unpaid portion of the Allowance (as defined in the Work Letter), (ii) the provisions of this Lease regarding any Casualty or Condemnation (each as hereinafter defined) and the adjustment, negotiation, settlement and payment of any Net Award (as hereinafter defined) shall control not withstanding any conflicting provisions in the Mortgage, and (iii) upon any party succeeding to the interest of Landlord under this Lease, any accumulated amounts which Tenant may have to set-off against rent and other amounts due under this Lease pursuant to Section 19.8 below shall continue in full force and effect and be binding against such party and Tenant shall have the continued right to set-off such amounts against rent and other amounts due under this Lease. Notwithstanding the foregoing, in no event shall the Purchase Options and Right of First Offer be subordinate to the lien of any Mortgage and Tenant shall not be required to subordinate the Purchase Options and Right of First Offer to the lien of any Mortgage. Landlord represents and warrants that as of the Commencement Date, the only Lender having a Mortgage is Wells Fargo Bank, N.A.

16. RULES AND REGULATIONS. Tenant shall faithfully observe and comply with all the rules and regulations as set forth in Exhibit C to this Lease (the “Rules and Regulations”). To the extent of any conflict between the Rules and Regulations and the terms and conditions of this Lease, the terms and conditions of this Lease shall control.

17. REENTRY BY LANDLORD .

17.1 Landlord reserves and shall at all times have the right to re-enter the Premises to inspect the same, to show said Premises to prospective purchasers, Lenders or tenants, to verify compliance or non-compliance by Tenant with its obligations hereunder and the existence or non-existence of an Event of Default or event which with the passage of time and/or notice would constitute an Event of Default, and to exercise any rights and to take such other action with respect to the Premises as is permitted by any provision of this Lease, without abatement of rent. Landlord agrees that except in the event Landlord and Tenant otherwise mutually agree to the contrary, Landlord shall not show the Premises to prospective tenants except during the last twelve (12) months of the then current Term of this Lease. Notwithstanding anything to the contrary set forth herein, except (i) to the extent requested by Tenant, and/or (ii) in the event of an emergency, Landlord shall provide to Tenant at least one business day’s prior written notice before Landlord enters the interior portion of the Premises and perform such entry during normal business hours (i.e. 9:00 a.m to 6:00 p.m. Mondays through Fridays). Tenant hereby waives any claim for damages for any injury or inconvenience to or interference with Tenant’s business and any loss of occupancy or quiet enjoyment of the Premises occasioned by any action of Landlord authorized by this Article 17. Notwithstanding the foregoing, except in emergency situations, as determined by Landlord, Landlord shall exercise reasonable efforts to perform any entry into the Premises in a manner that is reasonably designed to minimize interference with the operation of Tenant’s business in the Premises. Except in the case of an emergency where necessary to prevent imminent damage to persons or the Building, Landlord and Landlord’s representatives shall comply with Tenant’s commercially reasonable security and confidentiality requirements with respect to such entry. Tenant shall be entitled to have an employee of Tenant accompany the person(s) entering the interior portions of the Premises, provided Tenant makes such employee available at the time Landlord or such other party desires to enter the Premises. Landlord acknowledges and agrees that due to the nature of Tenant’s business certain portions of the Premises may be reasonably designated by Tenant from time to time as highly sensitive and confidential (the “High Sensitivity Areas”). Landlord shall not be permitted to enter any High Sensitivity Areas except in the case of an emergency.

18. DEFAULT .

18.1 The following events shall be deemed to be Events of Default under this Lease:

18.1.1 Tenant shall fail to pay when due any sum of money becoming due to be paid to Landlord under this Lease, whether such sum be any installment of the rent reserved by this Lease, any other amount treated as additional rent under this Lease, or any other payment or reimbursement to Landlord required by this Lease, whether or not treated as additional rent under this Lease, and such failure shall continue for a period of ten (10) days after written notice that such payment was not made when due.

 

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18.1.2 Tenant shall fail to comply with any term, provision or covenant of this Lease which is not provided for in another Section of this Article and shall not cure such failure within thirty (30) days after written notice of such failure to Tenant provided, however, that such failure shall not be an event of default if such failure could not reasonably be cured during such thirty (30) day period, Tenant has commenced the cure within such thirty (30) day period and thereafter is diligently pursuing such cure to completion.

18.1.3 Subject to Section 14.2, Tenant shall fail to vacate the Premises immediately upon termination of this Lease, by lapse of time or otherwise, or upon termination of Tenant’s right to possession only.

18.1.4 Tenant shall become insolvent, admit in writing its inability to pay its debts generally as they become due, file a petition in bankruptcy or a petition to take advantage of any insolvency statute, make an assignment for the benefit of creditors, make a transfer in fraud of creditors, apply for or consent to the appointment of a receiver of itself or of the whole or any substantial part of its property, or file a petition or answer seeking reorganization or arrangement under the federal bankruptcy laws, as now in effect or hereafter amended, or any other applicable law or statute of the United States or any state thereof.

18.1.5 A court of competent jurisdiction shall enter an order, judgment or decree adjudicating Tenant bankrupt, or appointing a receiver of Tenant, or of the whole or any substantial part of its property, without the consent of Tenant, or approving a petition filed against Tenant seeking reorganization or arrangement of Tenant under the bankruptcy laws of the United States, as now in effect or hereafter amended, or any state thereof, and such order, judgment or decree shall not be vacated or set aside or stayed within ninety (90) days from the date of entry thereof.

18.1.6 Tenant shall fail to deliver any certificate (or written comments thereto) required under Section 25.1 below within the period following a second notice as set forth therein.

18.1.7 Facebook, Inc. shall (i) sell all or substantially all of its assets except this Lease (a “Complete Asset Sale”), (ii) at the time of such sale no person or entity remains liable for the performance of Tenant’s obligations under this Lease (including any prior assignee of Tenant’s obligations under this Lease who remains liable therefor) with a net worth of at least $250,000,000 (the “Net Worth Threshold”) as of the date of the Complete Asset Sale and (iii) within thirty (30) days of Landlord obtaining knowledge of the Complete Asset Sale (x) Landlord delivers written notice to Tenant that Landlord requires additional security for the performance of Tenant’s obligations under this Lease and (y) within ninety (90) days after receipt of such written notice, Tenant fails to either: (A) deliver to Landlord a guaranty agreement in commercially reasonable form from a person or entity with a net worth equal to or greater than the Net Worth Threshold as of the date of the Complete Asset Sale guarantying the performance of Tenant’s remaining obligations under this Lease from and after the Complete Asset Sale or (B) deliver to Landlord a security deposit for the remainder of the Term in the amount of $10,000,000 in the form of either (I) cash or (II) a commercially reasonable letter of credit. Notwithstanding the foregoing, if an affiliate of Facebook, Inc. exists with a net worth equal to greater than the Net Worth Threshold at the time of a Complete Asset Sale, then Tenant may not elect the option set forth in clause (B) of the preceding sentence.

18.2 The following events shall be deemed to be events of default by Landlord under this Lease:

18.2.1 Landlord shall fail to pay when due any sum of money becoming due to be paid to Tenant under this Lease, and such failure shall continue for a period of ten (10) business days after written notice that such payment was not made when due.

18.2.2 Landlord shall fail to comply with any term, provision or covenant of this Lease which is not provided for in another Section of this Article and shall not cure such failure within thirty (30) days after written notice of such failure to Landlord provided, however, that such failure shall not be an event of default if such failure could not reasonably be cured during such thirty (30) day period, Landlord has commenced the cure within such thirty (30) day period and thereafter is diligently pursuing such cure to completion.

18.2.3 Landlord shall become insolvent, admit in writing its inability to pay its debts generally as they become due, file a petition in bankruptcy or a petition to take advantage of any insolvency statute, make an assignment for the benefit of creditors, apply for or consent to the appointment of a receiver of itself or of the whole or any substantial part of its property, or file a petition or answer seeking reorganization or arrangement under state or federal bankruptcy laws, as now in effect or hereafter amended.

18.2.4 A court of competent jurisdiction shall enter an order, judgment or decree adjudicating Landlord bankrupt, or appointing a receiver of Landlord, or of the whole or any substantial part of its property, without the consent of

 

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Landlord, or approving a petition filed against Landlord seeking reorganization or arrangement of Landlord under the bankruptcy laws of the United States, as now in effect or hereafter amended, or any state thereof, and such order, judgment or decree shall not be vacated or set aside or stayed within ninety (90) days from the date of entry thereof.

18.2.5 Landlord shall fail to deliver any certificate (or written comments thereto) required under Section 25.2 below within the period following a second notice as set forth therein.

19. REMEDIES .

19.1 Upon the occurrence of any Event or Events of Default under this Lease, whether enumerated in Article 18 or not, Landlord shall have the option to pursue any one or more of the following remedies without any notice (except as expressly prescribed herein) or demand whatsoever:

19.1.1 Terminate this Lease and Tenant’s right to possession of the Premises and recover from Tenant an award of damages equal to the sum of the following:

19.1.1.1 The Worth at the Time of Award of the unpaid rent which had been earned at the time of termination;

19.1.1.2 The Worth at the Time of Award of the amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rent loss that Tenant proves could have been reasonably avoided;

19.1.1.3 The Worth at the Time of Award of the amount by which the unpaid rent for the balance of the Term after the time of award exceeds the amount of such rent loss that Tenant proves could be reasonably avoided;

19.1.1.4 Any other amount necessary to compensate Landlord for all the detriment either proximately caused by Tenant’s failure to perform Tenant’s obligations under this Lease or which in the ordinary course of things would be likely to result therefrom; and

19.1.1.5 All such other amounts in addition to or in lieu of the foregoing as may be permitted from time to time under applicable law.

The “Worth at the Time of Award” of the amounts referred to in parts 19.1.1.1 and 19.1.1.2 above, shall be computed by allowing interest at the lesser of a per annum rate equal to five percent (5%) plus the Prime Rate per annum. The “Worth at the Time of Award” of the amount referred to in part 19.1.1.3, above, shall be computed by discounting such amount at the discount rate of the Federal Reserve Bank of San Francisco at the time of award plus one percent (1%).

19.1.2 Employ the remedy described in California Civil Code § 1951.4 (Landlord may continue this Lease in effect after Tenant’s breach and abandonment and recover rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations); or

19.1.3 Notwithstanding Landlord’s exercise of the remedy described in California Civil Code § 1951.4 in respect of an Event or Events of Default, at such time thereafter as Landlord may elect in writing, to terminate this Lease and Tenant’s right to possession of the Premises and recover an award of damages as provided above in Section 19.1.1.

19.2 The subsequent acceptance of rent hereunder by Landlord shall not be deemed to be a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, other than the failure of Tenant to pay the particular rent so accepted, regardless of Landlord’s knowledge of such preceding breach at the time of acceptance of such rent. No waiver by Landlord of any breach hereof shall be effective unless such waiver is in writing and signed by Landlord.

19.3 TENANT AND LANDLORD HEREBY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, THE RIGHT TO TRIAL BY JURY IN ANY LITIGATION ARISING OUT OF OR RELATING TO THIS LEASE.

 

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19.4 No right or remedy herein conferred upon or reserved to Landlord or Tenant is intended to be exclusive of any other right or remedy, and each and every right and remedy shall be cumulative and in addition to any other right or remedy given hereunder or now or hereafter existing by agreement, applicable law or in equity. In addition to other remedies provided in this Lease, Landlord and Tenant shall be entitled, to the extent permitted by applicable law, to injunctive relief, or to a decree compelling performance of any of the covenants, agreements, conditions or provisions of this Lease, or to any other remedy allowed to Landlord or Tenant at law or in equity. Forbearance by Landlord or Tenant to enforce one or more of the remedies herein provided upon an event of default shall not be deemed or construed to constitute a waiver of such event of default.

19.5 This Article 19 shall be enforceable to the maximum extent such enforcement is not prohibited by applicable law, and the unenforceability of any portion thereof shall not thereby render unenforceable any other portion.

19.6 If legal proceedings are initiated to enforce any term of this Lease, to recover any Rent due under this Lease, for the breach of any covenant or condition of this Lease, or for the restitution of the Premises to Landlord and/or eviction of Tenant, the prevailing party shall be entitled to recover, as an element of its cost of suit and not as damages, reasonable attorneys’ fees and costs to be fixed by the court.

19.7 Upon the occurrence of an Event of Default, Landlord may (but shall not be obligated to) cure such Event of Default at Tenant’s sole expense without being deemed in any manner guilty of trespass, eviction or forcible entry and detainer and without incurring any liability for any damage or interruption of Tenant’s business resulting therefrom and Tenant agrees to reimburse Landlord within thirty (30) days of Landlord’s demand, together with reasonably supporting documentation, as additional rent, for any expenses which Landlord may incur in thus effecting compliance with Tenant’s obligations under this Lease, plus interest from the date of expenditure by Landlord at a rate equal to the lesser of eight percent (8%) per annum and the maximum rate permitted by Regulations.

19.8 If Landlord is obligated to pay any amount of money to Tenant pursuant to this Lease (including, without limitation, the Allowance (as defined in the Work Letter)) or the Lease Security Documents (as hereinafter defined) and Landlord fails to timely pay, such amount shall accrue interest (at a rate equal to the lesser of eight percent (8%) per annum and the maximum rate permitted by Regulations) compounded daily. Also, in addition to any other rights and remedies available at law or in equity, Tenant may deliver written notice to Landlord of such failure and if Landlord fails to pay the applicable amount to Tenant within thirty (30) days after receipt of such notice, Tenant may immediately set-off such amount (including such interest) against rent and other amounts due under this Lease, in which case, Tenant shall provide Landlord a written notice (a “Set-Off Notice”) of such set-off (including the amount of such set-off and interest). Interest shall be calculated from the date a particular payment was due until the earlier of the date of such set-off or payment. Within thirty (30) days after receipt of a Set-Off Notice, if Landlord disputes in good faith the set-off or the amount thereof set forth in a Set-Off Notice, then Landlord may deliver written notice (an “Arbitration Notice”) to Tenant of such dispute and the matter shall be submitted to arbitration in accordance with Article 51 below. Landlord shall not be obligated to submit a any dispute under this Section 19.8 to arbitration and Landlord may instead pursue other remedies under this Lease or otherwise available to Landlord at law in order to resolve such dispute; provided, that, upon delivery of an Arbitration Notice, Landlord shall have irrevocably committed to arbitration in accordance with Article 51 below as the sole and exclusive means of resolving any such dispute and such arbitration shall be binding upon the parties. If following the conclusion of such arbitration it is determined that Tenant impermissibly set-off against rent and other amounts due under this Lease, then Tenant shall within thirty (30) days after the conclusion of such arbitration make a cash payment to Landlord in the amount as determined in the arbitration which Tenant impermissibly set-off (which amount shall include interest at a rate equal to the lesser of eight percent (8%) per annum and the maximum rate permitted by Regulations compounded daily from the date such off-set rent was due until paid).

19.9 In addition to Tenant’s other remedies, if Landlord fails to make any disbursement of the Allowance (as defined in the Work Letter) within thirty (30) days after receipt of a Draw Package, then after the expiration of such thirty (30) day period, Tenant may deliver a written notice to Landlord of such failure which written notice must substantially state in bold and all caps “ LANDLORD’S FAILURE TO MAKE A DISBURSEMENT OF THE ALLOWANCE WITHIN THIRTY (30) DAYS AFTER RECEIPT OF THIS NOTICE MAY RESULT IN TENANT’S EXERCISE OF THE PURCHASE OPTION ”. If Landlord fails to make the applicable disbursement within thirty (30) days after receipt of such notice (the “Thirty Day Cure Period”), then Tenant shall have the right to exercise the Purchase Option by providing Landlord written notice at any time prior to the earlier to occur of (x) Landlord making the applicable disbursement of the Allowance or (y) sixty (60) days after the expiration of the Thirty Day Cure Period (which notice shall specify the “Closing Date” which shall be a date within thirty (30) days after the delivery of such notice), in which case, the terms and conditions of Section 39 below shall apply to such exercise of the Purchase Option except (i) Tenant’s notice delivered pursuant to this Section 19.9 shall be deemed to be the “Exercise Notice”, (ii) the “Closing Date” shall be the

 

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date specified in Tenant’s notice delivered pursuant to this Section 19.9, and (iii) Tenant shall receive a credit against the Purchase Price equal to (A) any accumulated amounts which Tenant has the right to set-off against rent and other amounts due under this Lease under Section 19.8 above, and (B) any unpaid portion of the Allowance.

20. BUSINESS DAYS. As used herein, the term “business day” shall mean a day that is not a Saturday, Sunday or legal holiday. In the event that the date for the performance of any covenant or obligation under this Agreement shall fall on a Saturday, Sunday or legal holiday under the laws of the States of California, the date for performance thereof shall be extended to the next business day.

21. QUIET ENJOYMENT. Landlord represents and warrants that it has full right and authority to enter into this Lease and that Tenant, while paying the rental and performing its other covenants and agreements contained in this Lease, shall peaceably and quietly have, hold and enjoy the Premises for the Term without hindrance or molestation from Landlord subject to the terms and provisions of this Lease. Landlord shall not be liable for any interference or disturbance by other tenants or third persons, nor shall Tenant be released from any of the obligations of this Lease because of such interference or disturbance.

22. CASUALTY .

22.1 If any fire or other casualty (a “Casualty”) to the Premises occurs, Tenant shall promptly notify Landlord. Tenant shall be responsible for the adjustment, collection and compromise of the Net Award (defined below) payable in connection with a Casualty; provided, that, Tenant shall not agree upon or otherwise settle the Net Award with any insurer without Landlord’s prior written consent not to be unreasonably withheld, conditioned or delayed. Landlord agrees to sign, upon the request of Tenant, any proofs of loss, receipts, vouchers and releases in connection therewith on commercially reasonable forms. Tenant shall be solely liable for the payment of any applicable deductibles. “Net Award” shall mean (a) the entire award payable to Landlord by reason of a Condemnation (defined in Section 23.1), whether pursuant to judgment, agreement or otherwise or (b) the entire net proceeds of Project Property Insurance payable by reason of a Casualty. Except as expressly set forth herein, if any Casualty shall occur, this Lease shall continue, notwithstanding such event, and there shall be no abatement or reduction of any rent. Promptly after the insurer’s acceptance of the claim, Tenant shall commence and diligently continue to restore the Premises to their value, condition and character immediately prior to such event (assuming the Premises to have been in the condition required by this Lease); provided that, Tenant shall have the right to restore Alterations paid for by Tenant but Tenant shall have no obligation to restore any Alterations paid for by Tenant (other than Restorable Alterations which in any event Tenant shall be obligated to restore). Any Net Award shall be made available to Tenant solely for the restoration of any of the Premises pursuant to and in accordance with the provisions of Section 22.2 hereof. For purposes of this Lease, the term “Restorable Alterations” shall mean those Alterations that are (i) Capital Items made at the Premises after the expiration of the initial ten (10) years of the Lease Term which Capital Items are paid for in whole or in part by Landlord as set forth in Section 7.2 of this Lease above, and (ii) repairs and replacements of the Building systems, foundation, slab, load bearing walls or other structural portions of the Buildings or roofs made by Tenant.

22.2 Unless this Lease is terminated pursuant to Sections 22.4 below, during the restoration of the Premises, Tenant shall monthly submit to Landlord the following (a “Restoration Draw Package”): (i) for informational purposes only, the schedule of values, by trade, of percentage of completion of the restoration of the Premises, detailing the portion of the work completed and the portion not completed, (ii) valid and binding executed conditional mechanic’s lien releases from all of Tenant’s contractors (along with unconditional mechanics lien releases with respect to payments made pursuant to Tenant’s prior submission hereunder), and (iii) payment receipts for items paid for since the last submittal.

22.3 Notwithstanding anything to the contrary set forth herein, (i) Tenant shall have no right to terminate this Lease as the result of any Casualty which occurred prior to the Commencement Date (a “Pre-Existing Casualty”), (ii) Tenant shall be require to perform any restoration of the Project required as the result of any Pre-Existing Casualty, at Tenant’s sole cost and expense, and (iii) upon receipt of Restoration Draw Package(s), Landlord shall make available to Tenant any insurance proceeds or purchase price reduction received by Landlord as the result of any Pre-Existing Casualty for the repair and maintenance of the Project.

22.4 Notwithstanding anything to the contrary set forth herein, Tenant shall have the right to terminate this Lease if all of the following occur: (i) at least fifty percent (50%) of the rentable square footage of the Buildings is rendered untenantable by a Casualty; and (ii) there is less than three (3) years of the then current Term remaining on the date of such Casualty; and (iii) Tenant provides Landlord with written notice of its intent to terminate within sixty (60) days after the date of the Casualty. Landlord shall be entitled to and Tenant shall assign to Landlord all Net Awards (except the portion applicable to Alterations paid for by Tenant (other than Restorable Alterations)) upon any such termination of this Lease.

 

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22.5 If Tenant terminates this Lease pursuant to Sections 22.4 above, then Tenant may remain in possession of all or any portion of the Premises, for up to one hundred eighty (180) days after such termination date (which time period shall be specifically identified by Tenant in its written termination notice), in which case, the terms and conditions of this Lease shall continue to apply to the portion of the Premises occupied by Tenant and Tenant shall pay as the Monthly Installment of Rent during such period an amount equal to the Monthly Installment of Rent payable under this Lease for the last full month prior to the date of such termination prorated based on the ratio that the rentable square footage of the Premises actually occupied by Tenant during such period bears to the total rentable square footage of the Premises prior to the occurrence of the applicable Casualty which shall be recalculated on a monthly basis during each month of such one hundred eighty (180) day period to reflect the actual rentable square footage of the Premises which Tenant continues to occupy.

22.6 In addition to Tenant’s other remedies, if any Casualty occurs which renders fifty (50%) or more of the rentable area of the Buildings unusable, then Tenant shall have the right to exercise the Purchase Option by providing Landlord written notice within sixty (60) after the occurrence of such Casualty, which notice shall specify the “Closing Date” (which shall be a date within thirty (30) days after the delivery of such notice), in which case, the terms and conditions of Section 39 below shall apply to such exercise of the Purchase Option except (i) Tenant’s notice delivered pursuant to this Section 22.6 shall be deemed to be the “Exercise Notice”, (ii) the “Closing Date” shall be the date specified in Tenant’s notice delivered pursuant to this Section 22.6, and (iii) Landlord shall assign any interest of Landlord in the Net Award to Tenant at the closing of the Purchase Option.

22.7 Tenant hereby waives any and all rights under and benefits of Sections 1932(2) and 1933(4) of the California Civil Code, or any similar or successor Regulations or other laws now or hereinafter in effect.

22.8 Any insurance proceeds owed under Project Property Insurance and not used by Tenant in restoration of the Premises (including Restorable Alterations) shall be the property of Landlord except the portion applicable to Alterations paid for by Tenant (other than Restorable Alterations), which shall be retained by Tenant.

23. EMINENT DOMAIN.

23.1 If there occurs any taking or damaging of all or a portion of any of the Premises (i) in or by condemnation or other eminent domain proceedings pursuant to any Regulations, general or special, or (ii) by reason of any agreement with any condemnor in settlement of or under threat of any such condemnation or other eminent domain proceeding (each, a “Condemnation”), that is not a Total Condemnation (defined below) shall occur, this Lease shall continue, notwithstanding such event, and rent payable hereunder during the unexpired Term shall be reduced to such extent as may be fair and reasonable under the circumstances. Tenant and Landlord, promptly upon receiving any notice or knowledge of the institution of or intention to institute any proceeding for Condemnation (a “Condemnation Notice”), shall notify the other party thereof. Tenant shall be entitled to participate with Landlord in any adjustment, collection and compromise of the Net Award (defined below) payable in connection with a Condemnation and Landlord shall not agree upon or otherwise settle the Net Award without Tenant’s prior written consent not to be unreasonably withheld, conditioned or delayed. No agreement with any condemnor in settlement or under threat of any Condemnation shall be made by Tenant or Landlord without the written consent of the other party, not to be unreasonably withheld, conditioned or delayed. Subject to the provisions of this Section 23.1, Tenant hereby irrevocably assigns to Landlord any award or payment to which Tenant is or may be entitled by reason of any Condemnation, whether the same shall be paid or payable for Tenant’s leasehold interest hereunder or otherwise; but nothing in this Lease shall impair Tenant’s right to any award or payment on account of Tenant’s trade fixtures, equipment or other tangible property which is not part of the base Building systems and equipment, moving expenses or loss of business, if available, and the value of tenant improvements and Alterations that are paid for by Tenant.

23.2 Promptly after Landlord’s receipt of the Net Award, Tenant shall commence and diligently continue to restore the Premises as nearly as possible to their value, condition and character immediately prior to such event (assuming the Premises to have been in the condition required by this Lease); provided that, Tenant shall have no obligation to restore any Alterations paid for by Tenant. During such restoration, Tenant may submit Restoration Draw Packages to Landlord from time to time. Within thirty (30) days after receipt of any such Restoration Draw Package, Landlord shall reimburse Tenant for the amounts set forth therein up to the amount of the Net Award received in connection with the applicable Condemnation. Any condemnation award paid to Landlord hereunder and a part of a Net Award that is not used by Tenant in restoration of the Premises (including Restorable Alterations) shall be the property of Landlord. For purposes of clarification, Tenant shall have no obligation to expend additional sums above and beyond any Net Award actually received by Tenant in the restoration of the Premises.

 

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23.3 If a Condemnation in which more than fifty percent (50%) or more of the Premises are taken or which otherwise materially impairs access to the Premises or parking thereon (a “Total Condemnation”) occurs, Tenant may elect to terminate this Lease by providing written notice to Landlord within sixty (60) days after the date of the Casualty, in which case, Tenant shall have no obligation to restore the Premises. If Tenant terminates this Lease pursuant to this Section 23.3, then Tenant may remain in possession of all or any portion of the Premises not so taken, for up to one hundred eighty (180) days after such termination date (which time period shall be specifically identified by Tenant in its written termination notice), in which case, the terms and conditions of this Lease shall continue to apply to the portion of the Premises occupied by Tenant, and Tenant shall pay as the Monthly Installment of Rent during such period an amount equal to the Monthly Installment of Rent payable under this Lease for the last full month prior to the date of such termination prorated based on the ratio that the rentable square footage of the Premises actually occupied by Tenant during such period bears to the total rentable square footage of the Premises prior to the occurrence of the Total Condemnation which shall be recalculated on a monthly basis during each month of such one hundred eighty (180) day period to reflect the actual rentable square footage of the Premises which Tenant continues to occupy.

23.4 In addition to Tenant’s other remedies, if a Total Condemnation occurs, then Tenant shall have the right to exercise the Purchase Option by providing Landlord written notice within sixty (60) after the occurrence of such Total Condemnation (which notice shall specify the “Closing Date” which shall be a date within thirty (30) days after the delivery of such notice), in which case, the terms and conditions of Section 39 below shall apply to such exercise of the Purchase Option except (i) Tenant’s notice delivered pursuant to this Section 23.4 shall be deemed to be the “Exercise Notice”, (ii) the “Closing Date” shall be date specified in Tenant’s notice delivered pursuant to this Section 23.4, and (iii) Landlord shall assign the Net Award to Tenant at the closing of the Purchase Option.

23.5 Tenant hereby waives any and all rights under and benefits of Section 1265.130 of the California Code of Civil Procedure, or any similar or successor Regulations or other laws now or hereinafter in effect.

24. SALE BY LANDLORD. In event of a sale or conveyance by Landlord of the Project, the same shall operate to release Landlord from any liability upon any of the covenants or conditions, expressed or implied, contained in this Lease in favor of Tenant to the extent arising or required to be performed after the date of such transfer, and in such event Tenant agrees to look solely to the responsibility of the successor in interest of Landlord in and to this Lease for any liability upon any of the covenants or conditions, expressed or implied, contained in this Lease in favor of Tenant to the extent arising or required to be performed after the date of such transfer, provided that, any successor shall have assumed or otherwise become liable for all of Landlord’s obligations under this Lease either by contractual obligation, assumption agreement or by operation of law, and further provided that Landlord and its successors, as the case may be, shall remain liable after their respective periods of ownership with respect to any sums due in connection with a breach or default by such party that arose during or prior to such period of ownership by such party. Except as set forth in this Article 24, this Lease shall not be affected by any such sale and Tenant agrees to attorn to the purchaser or assignee. Notwithstanding anything to the contrary set forth herein, the entity originally named as “Landlord” in this Lease shall remain liable for the payment of the Allowance notwithstanding any sale or conveyance of the Project.

25. ESTOPPEL CERTIFICATES .

25.1 Within twenty (20) days following any written request which Landlord may make from time to time, Tenant shall execute and deliver (or provide written comments to any proposed certificate delivered by Landlord) to Landlord or mortgagee or prospective mortgagee a statement certifying: (a) the date of commencement and expiration of this Lease; (b) the fact that this Lease is unmodified and in full force and effect (or, if there have been modifications to this Lease, that this lease is in full force and effect, as modified, and stating the date and nature of such modifications); (c) the date to which the rent and other sums payable under this Lease have been paid; (d) the fact that there are no current defaults under this Lease by either Landlord or Tenant except as specified in Tenant’s statement; (e) whether or not Tenant has exercised a Purchase Option or the Right of First Offer, and (f) such other factual matters as may be reasonably requested by Landlord. Tenant agrees that any statement delivered pursuant to this Article 25 may be relied upon by any mortgagee, beneficiary or purchaser of Landlord. Tenant irrevocably agrees that if Tenant fails to execute and deliver such certificate within such twenty (20) day period (or provide written comments to any proposed certificate delivered by Landlord), Landlord may provide to Tenant a second written request with respect to such estoppel certificate which written notice must state in bold and all caps “ FAILURE TO RESPOND TO THIS WRITTEN NOTICE WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT HEREOF SHALL CONSTITUTE AN EVENT OF DEFAULT ”. If Tenant fails to execute and deliver such certificate (or provide written comments to any proposed certificate delivered by Landlord) within a five (5) business day period following the receipt of Landlord’s second written request therefor, such failure shall constitute an Event of Default.

 

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25.2 Landlord shall, within twenty (20) days after receipt of a written request from Tenant, execute and deliver (or provide written comments to any proposed certificate delivered by Tenant) to Tenant a statement certifying: (a) the date of commencement and expiration of this Lease; (b) the fact that this Lease is unmodified and in full force and effect (or, if there have been modifications to this Lease, that this lease is in full force and effect, as modified, and stating the date and nature of such modifications); (c) the date to which the rent and other sums payable under this Lease have been paid; (d) the fact that there are no current defaults under this Lease by either Landlord or Tenant except as specified in Landlord’s statement; (e) whether or not Tenant has exercised a Purchase Option or the Right of First Offer, and (f) such other factual matters as may be reasonably requested by Tenant. Landlord agrees that any statement delivered pursuant to this Article 25 may be relied upon by any assignee, lender, subtenant or investor of Tenant. Landlord irrevocably agrees that if Landlord fails to execute and deliver such certificate within such twenty (20) day period (or provide written comments to any proposed certificate delivered by Tenant), Tenant may provide to Landlord a second written request with respect to such estoppel certificate which written notice must state in bold and all caps “ FAILURE TO RESPOND TO THIS WRITTEN NOTICE WITHIN FIVE (5) BUSINESS DAYS AFTER RECEIPT HEREOF SHALL CONSTITUTE AN EVENT OF DEFAULT ”. If Landlord fails to execute and deliver such certificate (or provide written comments to any proposed certificate delivered by Tenant) within a five (5) business day period following the receipt of Tenant’s second written request therefor, such failure shall constitute an event of default.

26. SURRENDER OF PREMISES .

26.1 Tenant and Landlord shall meet for two (2) joint inspections of the Premises, the first to occur at least thirty (30) days (but no more than sixty (60) days) before the last day of the Term, and the second to occur not later than forty-eight (48) hours after Tenant has vacated the Premises.

26.2 All Alterations shall be and remain the property of Landlord during the Term. At the end of the Term or any renewal of the Term or other sooner termination of this Lease, Tenant will peaceably deliver up to Landlord possession of the Premises in good condition, together with all Alterations by whomsoever made, broom clean and free of all debris, excepting only ordinary wear and tear and damage by fire or other casualty that is not Tenant’s obligation to repair hereunder and with all Required Removables removed. In addition, if Tenant elects to remove any Generator, Tenant shall remove the same on or before the expiration or earlier termination of this Lease and repair any damage to the Premises caused by such removal. Any Required Removables and Generators not so removed shall be deemed abandoned by Tenant and title to the same shall thereupon pass to Landlord under this Lease as by a bill of sale, but Tenant shall remain responsible for the cost of removal and disposal of such Required Removables and Generators, as well as any damage caused by such removal.

26.3 All obligations of Tenant under this Lease not fully performed as of the expiration or earlier termination of the Term shall survive the expiration or earlier termination of the Term.

27. NOTICES. Any notice or document required or permitted to be delivered under this Lease shall be addressed to the intended recipient, by fully prepaid registered or certified United States Mail return receipt requested, or by reputable independent contract delivery service furnishing a written record of attempted or actual delivery, and shall be deemed to be delivered when tendered for delivery to the addressee at its address set forth on the Reference Pages, or at such other address as it has then last specified by written notice delivered in accordance with this Article 27, whether or not actually accepted or received by the addressee. Any such notice or document may also be personally delivered if a receipt is signed by and received from, the individual, if any, named in Tenant’s Notice Address.

28. TAXES PAYABLE BY TENANT. Tenant shall be responsible for the payment of any and all taxes levied or assessed against Tenant and which become payable during the term hereof upon Tenant’s Personal Property.

29. DEFINED TERMS AND HEADINGS. The Article headings shown in this Lease are for convenience of reference and shall in no way define, increase, limit or describe the scope or intent of any provision of this Lease. Any indemnification or insurance of Landlord shall apply to and inure to the benefit of all the following “Landlord Entities”, being Landlord, Landlord’s investment manager, and the trustees, boards of directors, officers, general partners, beneficiaries, stockholders, employees and agents of each of them. In any case where this Lease is signed by more than one person, the obligations under this Lease shall be joint and several. The terms “Tenant” and “Landlord” or any pronoun used in place thereof shall indicate and include the masculine or feminine, the singular or plural number, individuals, firms or corporations, and their and each of their respective successors, executors, administrators and permitted assigns, according to the context hereof. Tenant and Landlord hereby accept and agree to be bound by the figures for the rentable square footage of the Premises shown on the Reference Pages.

 

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30. REPRESENTATIONS .

30.1 Tenant represents and warrants that Tenant has been and is qualified to do business in the state in which the Project is located, that the entity has full right and authority to enter into this Lease, and that all persons signing on behalf of the entity were authorized to do so by appropriate actions. Tenant agrees to deliver to Landlord, simultaneously with the delivery of this Lease, a corporate resolution, proof of due authorization by partners, formal certificate of Tenant’s corporate secretary, or other appropriate documentation reasonably acceptable to Landlord evidencing the due authorization of Tenant to enter into this Lease.

30.2 Tenant hereby represents and warrants that Tenant is not (i) the target of any sanctions program that is established by Executive Order of the President or published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“OFAC”); (ii) designated by the President or OFAC pursuant to the Trading with the Enemy Act, 50 U.S.C. App. § 5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the Patriot Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or any Executive Order of the President issued pursuant to such statutes; or (iii) named on the following list that is published by OFAC: “List of Specially Designated Nationals and Blocked Persons.” If the foregoing representation is untrue at any time during the Term, an Event of Default will be deemed to have occurred, without the necessity of notice to Tenant.

30.3 Landlord represents and warrants that Landlord is qualified to do business in the state in which the Project is located, that Landlord has full right and authority to enter into this Lease, and that all persons signing on behalf of Landlord were authorized to do so by appropriate actions.

30.4 Landlord hereby represents and warrants that Landlord is not : (i) the target of any sanctions program that is established by Executive Order of the President or published by the OFAC; (ii) designated by the President or OFAC pursuant to the Trading with the Enemy Act, 50 U.S.C. App. § 5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the Patriot Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or any Executive Order of the President issued pursuant to such statutes; or (iii) named on the following list that is published by OFAC: “List of Specially Designated Nationals and Blocked Persons.” If the foregoing representation is untrue at any time during the Term, an event of default will be deemed to have occurred, without the necessity of notice to Landlord.

31. FINANCIAL STATEMENTS AND CREDIT REPORTS.

Subject to the terms and conditions of this Article 31, at Landlord’s written request in connection with a sale or financing of the Project (but not more than once during any Lease Year), Tenant shall deliver to Landlord a copy of Tenant’s most recent audited financial statement, or, if unaudited, certified by an officer of Tenant as being true, complete and correct in all material respects, which Tenant may provide by read-only portal access to a secure website. Landlord agrees that Tenant’s financial statements are deemed to be Tenant’s confidential information. Landlord hereby agrees to maintain Tenant’s financial statements as proprietary and confidential and will take reasonable measures to avoid disclosure and unauthorized use of the financial statements (including, without limitation, measures at least as stringent as it takes to protect its own confidential information of a similar nature). Landlord agrees not to disclose Tenant’s financial statements to any third party other than as-needed to any lender, prospective lender, or purchaser and to Landlord’s attorneys, accountants, investment advisors and similar business advisors, provided that in the case of each such disclosure: (a) such disclosures are for bona fide business purposes related to the Project; (b) all such third parties have signed a commercially reasonable non-disclosure agreement prior to receiving any of Tenant’s financial statements (a copy of which shall be delivered to Tenant prior to any such parties receiving any such financial statements); and (c) Landlord will be liable to Tenant for any breaches of such confidentiality obligations by such third parties. Notwithstanding the foregoing, the obligation of confidentiality provided for with respect to Tenant’s financial statements shall not apply to the extent the financial statements: (i) are required to be disclosed by any Regulations after giving reasonable notice to Tenant to allow Tenant time to seek a protective order, to the extent permitted by Regulations, (ii) are, at the time of delivery, already in the lawful possession of the receiving party, (iii) are, at the time of disclosure, in a public offering or in the public domain, or, after disclosure by a person or entity not subject to the confidentiality obligations herein, has become part of the public domain, (iv) are independently developed (1) by the receiving party without breaching the confidentiality obligations herein, or (2) by parties who have not had, either directly or indirectly, access to or knowledge of the financial statements; or (v) are disclosed with Tenant’s prior written consent. The foregoing shall not apply so long as Tenant’s current annual report (in compliance with applicable securities laws) for such applicable year is available to Landlord in the public domain. The confidentiality obligations in regards to Tenant’s financial statements shall be as set forth in this Article 31 and Article 42 of this Lease shall not apply to Tenant’s financial statements.

 

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32. COMMISSIONS. Each of the parties represents and warrants to the other that it has not dealt with any broker or finder in connection with this Lease, except as described on the Reference Pages.

33. TIME AND APPLICABLE LAW. Time is of the essence of this Lease and all of its provisions. This Lease shall in all respects be governed by the laws of the state in which the Project is located.

34. SUCCESSORS AND ASSIGNS. Subject to the provisions of Article 9, the terms, covenants and conditions contained in this Lease shall be binding upon and inure to the benefit of the heirs, successors, executors, administrators and assigns of the parties to this Lease.

35. ENTIRE AGREEMENT; SEVERABILITY. This Lease, together with its exhibits, contains all agreements of the parties to this Lease and supersedes any previous negotiations. There have been no representations made by the Landlord or any of its representatives or understandings made between the parties other than those set forth in this Lease and its exhibits. This Lease may not be modified except by a written instrument duly executed by the parties to this Lease. If any provision of this Lease shall be invalid, unenforceable or ineffective for any reason whatsoever, all other provisions hereof shall be and remain in effect.

36. EXAMINATION NOT OPTION. Submission of this Lease shall not be deemed to be a reservation of the Premises. Neither Landlord nor Tenant shall be bound by this Lease until this Lease is fully executed and delivered by both parties.

37. RECORDATION. Concurrently with the execution and delivery of this Lease, a short form memorandum of this Lease has been recorded in the Official Records of San Mateo County, California. Tenant shall record all necessary documentation to release such memorandum of lease of record within thirty (30) days following the earlier to occur of (i) the Termination Date, or (ii) termination of this Lease or Tenant’s right to possession under this Lease. If Tenant fails to have such memorandum released within such thirty (30) day period, Landlord shall be entitled to take all action as is reasonably necessary to cause such memorandum to be released. In such event, Tenant, within thirty (30) days after demand together with reasonable supporting documentation, shall reimburse Landlord for any reasonable costs and expenses, including reasonable attorneys’ fees, incurred by Landlord in causing the notice of lease to be released of record.

38. OPTION TO RENEW. Provided this Lease is in full force and effect and Tenant is not in default under any of the other terms and conditions of this Lease beyond any applicable notice and cure period at the time of notification, Tenant shall have two (2) successive options to renew (each, a “Renewal Option”) the Term of this Lease (each, a “Renewal Term”), for the portion of the Premises being leased by Tenant as of the date the applicable Renewal Term is to commence, on the same terms and conditions set forth in this Lease, except as modified by the terms, covenants and conditions as set forth below. The term of the first Renewal Term (if exercised by Tenant) shall be ten (10) years. The term of the second Renewal Term (if exercised by Tenant) shall be nine (9) years and three hundred sixty four (364) days.

38.1 If Tenant elects to exercise the applicable Renewal Option, then Tenant shall provide Landlord with written notice (the “Renewal Option Exercise Notice”) no earlier than the date which is five hundred forty (540) days prior to the expiration of then current Term of this Lease but no later than the date which is three hundred sixty-five (365) days prior to the expiration of the then current Term of this Lease. If Tenant fails to provide such notice, Tenant shall have no further or additional right to extend or renew the Term of this Lease. Within thirty (30) days after Tenant’s written request, such request to be made no earlier than thirty (30) days prior to the first date on which Tenant may exercise its Renewal Option, Landlord shall advise Tenant in writing of Landlord’s determination of the Prevailing Market rate for the applicable Renewal Term (“Landlord’s Prevailing Market Determination”).

38.2 The Annual Rent and Monthly Installment of Rent in effect at the expiration of the then current Term of this Lease shall be revised to be ninety-five percent (95%) of the Prevailing Market (as defined in Section 38.9) rate as of the commencement of the Renewal Term. Unless Tenant has previously requested (and Landlord has delivered) a written notice setting forth Landlords’ Prevailing Market Determination, within ten (10) days after receipt of the Renewal Option Exercise Notice, Landlord shall deliver a written notice to Tenant setting forth Landlord’s Prevailing Market Determination. Landlord and Tenant shall have thirty (30) days following Tenant’s receipt of Landlord’s Prevailing Market Determination (or for thirty (30) days following Landlord’s receipt of the Renewal Option Exercise Notice (if Tenant has previously requested (and Landlord has delivered) a written notice setting forth Landlords’ Prevailing Market Determination)) to agree on a mutually acceptable Annual Rent and Monthly Installment of Rent for the applicable

 

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Renewal Term. If following the expiration of such thirty (30) day period, Landlord and Tenant have not reached agreement on the Annual Rent and Monthly Installment of Rent for the applicable Renewal Term, then within ten (10) days after the expiration of such thirty (30) day period, Tenant shall elect in writing (“Tenant’s Election Notice”) to (i) accept Landlord’s Prevailing Market Determination, in which case, ninety five percent (95%) of Landlord’s Prevailing Market Determination shall be the Annual Rent and Monthly Installment of Rent for the applicable Renewal Term, (ii) revoke the Renewal Option Exercise Notice, in which, case such notice shall be null and void and of no further effect and Tenant shall have no further or additional right to extend or renew the Term of this Lease, or (iii) proceed to arbitration in accordance with Section 38.3 below, in which case, Tenant’s Election Notice shall set forth Tenant’s determination of the Prevailing Market rate for the Premises during the applicable Renewal Term (“Tenant’s Prevailing Market Determination”). Tenant’s failure to set forth Tenant’s Prevailing Market Determination in Tenant’s Election Notice shall be deemed to be a revocation of the Renewal Option Exercise Notice under clause (ii) of the preceding sentence.

38.3 If Tenant elects to arbitrate the Annual Rent and Monthly Installment of Rent for the applicable Renewal Term pursuant to Section 38.2 above, then Landlord and Tenant shall mutually select a single appraiser (the “Appraiser”) to determine which of Landlord’s Prevailing Market Determination or Tenant’s Prevailing Market Determination most closely reflects the Prevailing Market rate for the Premises during the applicable Renewal Term. The Appraiser must be certified as an MAI appraiser, shall be a disinterested party with no ongoing business relations with either party, and shall have had at least five (5) years experience within the previous ten (10) years as a real estate appraiser working in Menlo Park, California, with working knowledge of current rental rates and practices for commercial office properties. For purposes hereof, an “MAI” appraiser means an individual who holds an MAI designation conferred by, and is an independent member of, the American Institute of Real Estate Appraisers (or its successor organization, or in the event there is no successor organization, the organization and designation most similar). If an Appraiser has not been so appointed within twenty (20) days after Tenant’s delivery of Tenant’s Election Notice, then either party, on behalf of both, may request such appointment by the San Francisco office of the American Arbitration Association (or any successor thereto), or in the absence, failure, refusal or inability of such entity to act, then either party may apply to the presiding judge of the San Francisco Superior Court, for the appointment of the Appraiser, and the other party shall not raise any question as to the court’s full power and jurisdiction to make the appointment.

38.4 Within thirty (30) days after the appointment of the Appraiser, the Appraiser shall make his or her determination of which of Landlord’s Prevailing Market Determination or Tenant’s Prevailing Market Determination most closely reflects the Prevailing Market rate and such determination shall be binding on both Landlord and Tenant. If the Appraiser believes that expert advice would materially assist him or her, he or she may retain one or more qualified persons to provide such expert advice. The parties shall share equally in the costs of the Appraiser and of any experts retained by the Appraiser. Any fees of any appraiser, counsel or experts engaged directly by Landlord or Tenant, however, shall be borne by the party retaining such appraiser, counsel or expert. Each party may submit any written materials to the arbitrator. No witnesses or oral testimony (i.e. no hearing) shall be permitted in connection with the Appraiser’s decision unless agreed to by both parties. No ex parte communications shall be permitted between the Appraiser and either Landlord or Tenant following appointment of the Appraiser until conclusion of the arbitration process. The Appraiser is authorized to walk both the Premises and any comparable space (to the extent access is made available).

38.5 Intentionally Omitted.

38.6 If the Prevailing Market rate has not been determined by the commencement date of the applicable Renewal Term, Tenant shall pay Monthly Installments of Rent upon the terms and conditions in effect during the last month of the immediately preceding Term until such time as the Prevailing Market rate has been determined. Upon such determination, the Annual Rent and Monthly Installments of Rent for the Premises shall be retroactively adjusted to the commencement of such Renewal Term for the Premises.

38.7 Intentionally Omitted.

38.8 If Tenant fails to validly exercise the first Renewal Option, Tenant shall have no further right extend the term of this Lease. In addition, if both Renewal Options are validly exercised or if Tenant fails to validly exercise the second Renewal Option, Tenant shall have no further right to extend the term of this Lease. If Tenant is entitled to and properly exercises a Renewal Option, Landlord shall prepare an amendment (the “Renewal Amendment”) to reflect changes in the Annual Rent and Monthly Installment of Rent, Term, Termination Date, deletion of expired or terminated options, and other reasonably appropriate terms. The Renewal Amendment shall be sent to Tenant within a reasonable time after determination of the Prevailing Market rate and Tenant shall execute and return the Renewal Amendment to Landlord within fifteen (15) days after Tenant’s receipt of same, but, upon final determination of the Prevailing Market rate applicable during such Renewal Term as described herein, an otherwise valid exercise of a Renewal Option shall be fully effective whether or not the related Renewal Amendment is executed.

 

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38.9 As used herein, the term “Prevailing Market” rate means the rental rate that a willing tenant would pay, and that a willing landlord would accept, at arm’s length, as of the commencement of the applicable Renewal Term, for space comparable to the Premises within other projects in the Menlo Park, California area (the “Comparison Buildings”), based upon binding lease transactions for tenants in Comparison Buildings that, where possible, commence or are to commence within six (6) months prior to or within six (6) months after the commencement of the applicable Extension Term (“Comparison Leases”) excluding the rental value attributable to any Alterations paid for by Tenant. Comparison Leases shall include renewal and new non-renewal tenancies. Rent rates payable under Comparison Leases shall be adjusted to account for variations between this Lease and the Comparison Leases with respect to, among other things: (a) the length of the applicable Extension Term compared to the lease term of the Comparison Leases; (b) rental structure, including, without limitation, rental rates per rentable square foot (including type, gross or net, and if gross, adjusting for the base year or expense stop), and escalation provisions, (c) the size of the Premises compared to the size of the premises of the Comparison Leases; (d) location, floor levels, efficiencies and outlook of the floor(s) of the Premises compared to the premises of the Comparison Leases; (e) free rent, moving allowances and other cash payments affecting the rental rate; (f) the age and quality of construction of the Project (including compliance with applicable codes) compared to the Comparison Buildings; (g) leasehold improvements and/or allowances, including the amounts thereof in renewal leases; (h) access to public transit and the availability of parking; (i) the energy efficiencies and environmental elements of the Project compared to Comparison Buildings, including current LEED certification; (j) the uses of the Comparison Leases as compared to the use of the Premises; (k) the scope of any base building work to be performed in the Comparison Buildings compared to the Project; (l) the type and quality of tenant improvements in the Premises as compared to Comparison Buildings and (m) the fact that landlords are or are not paying real estate brokerage commissions in connection with such Comparison Leases.

39. OPTIONS TO PURCHASE .

39.1 Landlord hereby grants to Tenant, on the terms and conditions set forth herein, two (2) options to purchase the entire Project (including the Alterations made by Tenant) (the first such purchase option, the “First Purchase Option” and the second such purchase option, the “Second Purchase Option” and collectively, the “Purchase Option” or “Purchase Options”), free and clear of any and all Obligatory Removal Exceptions (as defined in the Purchase Agreement), as more particularly set forth in the Purchase Agreement (defined below). For purposes of clarification, if Tenant exercises a Purchase Option, then Landlord, at Landlord’s sole cost and expense, shall be responsible for discharging any Obligatory Removal Exceptions (as defined in the Purchase Agreement). The Purchase Options shall at all times remain senior in priority to any Mortgage.

39.2 Tenant may exercise the Purchase Options as follows. Tenant may exercise the First Purchase Option by delivering written notice (an “Exercise Notice”) to Landlord at any time during the period commencing on the date that is [*] prior to the [*] of the Commencement Date and ending as of the date that is [*] prior to the [*] of the Commencement Date (the “First Option Exercise Period”) of Tenant’s election to exercise the First Purchase Option. If Tenant fails to exercise the First Purchase Option as set forth above, then Tenant may exercise the Second Purchase Option by delivering an Exercise Notice to Landlord at any time during the period commencing on the date that is [*] prior to the [*] of the Commencement Date and ending as of the date that is [*] prior to the [*] of the Commencement Date (the “Second Option Exercise Period”) of Tenant’s election to exercise the Second Purchase Option.

39.3 The purchase price for the Project under the First Purchase Option or the Second Purchase Option shall be [*] (the “Purchase Price”). The closing of the purchase and sale of the Project shall be effected in accordance with the terms of this Article 39 and the terms and conditions set forth in the purchase agreement attached hereto as Exhibit D (the “Purchase Agreement”). Within three (3) business days following Tenant’s delivery of the Exercise Notice, Tenant shall execute and deliver three (3) originals of the Purchase Agreement to Landlord, in the form attached as Exhibit D hereto, with the following information completed by Tenant: (a) the “Closing Date”; (b) the name and address of the title and escrow company (which shall be designated by Tenant and shall be a reputable national title and escrow company); (c) the effective date of the Purchase Agreement which shall be the date that is two (2) business days following the date of the Exercise Notice; and (d) complete any other missing exhibits and information as may be required in the Purchase Agreement, as mutually and reasonably approved by the parties. Within three (3) business days following Tenant’s delivery of the Purchase Agreement, as executed by Tenant, Landlord shall counter-sign the three (3) originals of the Purchase Agreement executed by Tenant and deliver all three (3) executed originals to escrow company for

 

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* Confidential Treatment Requested.


further handling in accordance with the terms of the Purchase Agreement. Within three (3) business days following Landlord’s delivery of the executed Purchase Agreement to escrow company, Tenant shall deliver the Deposit (as set forth in the Purchase Agreement), to escrow company in accordance with the Purchase Agreement. The Purchase Price shall be paid by Tenant to Landlord through closing of the escrow in accordance with the Purchase Agreement. In the event that Tenant fails to timely execute and deliver the Purchase Agreement or to timely deliver the Deposit into the escrow in accordance with this Section, the applicable Purchase Option shall be null and void and of no further force or effect. Failure of Landlord to execute the Purchase Agreement shall have no effect on Tenant’s exercise of the Purchase Option or the rights and responsibilities of the parties hereunder.

39.4 For purposes of this Purchase Option, the “Closing Date” shall be defined as the date the grant deed (“Deed”) conveying the Project to Tenant is recorded in the Official Records of San Mateo County, California. The Closing Date if Tenant exercises the First Purchase Option shall be designated by Tenant in the Exercise Notice and shall be the date that is thirty (30) days prior to the [*] of the Commencement Date. The Closing Date if Tenant exercises the Second Purchase Option shall be designated by Tenant in the Exercise Notice and shall be the date that is thirty (30) days prior to the [*] of the Commencement Date.

39.5 In the event that (a) neither Purchase Option is exercised by Tenant in accordance with this Article 39 or (b) Tenant does not purchase the Project pursuant to the terms of the Purchase Agreement, the provisions of this Article shall be null and void and this Lease shall continue in full force and effect without the provisions of this Article. In such event, Tenant shall, upon request of Landlord, execute, acknowledge and deliver to Landlord a quit claim deed releasing Tenant’s interest in the Purchase Options. Landlord shall be responsible for the preparation of such deed and the payment of any fees applicable to the recording thereof.

39.6 Landlord and Tenant agree that Tenant shall have a right of specific performance to enforce Tenant’s right to the Purchase Options. In addition, any damages recoverable by Tenant from Landlord as the result of Landlord’s breach of this Article 39 or the Purchase Agreement may be set-off against rent and other amounts due under this Lease. Tenant may assign either or both Purchase Options separate and apart from any assignment of this Lease. Tenant shall provide Landlord written notice of any assignment of either or both Purchase Options within thirty (30) days following the effective date of such assignment. Tenant may reserve for itself either or both Purchase Options separate and apart from any assignment of this Lease.

40. RIGHT OF FIRST OFFER TO PURCHASE .

40.1 If during the Term Landlord intends (i) to offer for sale the Project (including by means of a sale directly or indirectly of the partnership interests, membership interests, stock or other equity interests of Landlord or by means of a merger of Landlord) (the “Right of First Offer Property”) to any unaffiliated third party purchaser (other than pursuant to Article 39) or (ii) to accept an offer from an unaffiliated third party purchaser to purchase all or any portion of the Right of First Offer Property (other than pursuant to Article 39), Landlord shall first give written notice to Tenant of the purchase price (the “Offer Price”) and other material terms upon which Landlord is willing to sell such Right of First Offer Property (“Landlord’s Offer Notice”). Landlord’s Offer Notice shall set forth the material economic terms and conditions (including, without limitation, a statement regarding whether the Project will be sold free and clear of all deeds of trust, mortgages or other similar instruments affecting the Project) under which Landlord is willing to sell the Right of First Offer Property to Tenant (the “Material Terms”), but shall not constitute an agreement between the parties or an offer to sell such Right of First Offer Property. Concurrently with Landlord’s Offer Notice, if applicable, Landlord shall provide Tenant with a copy of any unaffiliated third party purchaser’s offer concerning the Right of First Offer Property (excluding the identity of the offeror and the broker(s)). Tenant shall have the one time right of first offer (“Right of First Offer”) to buy such Right of First Offer Property upon the economic terms and conditions contained in Landlord’s Offer Notice and the terms of this Article 40, provided Tenant, within forty five (45) days (the “Exercise Period”) after receipt of Landlord’s Offer Notice, delivers written notice (the “Purchase Commitment”) to Landlord of Tenant’s desire to pursue the proposed sale transaction described in Landlord’s Offer Notice.

40.2 As used herein, “unaffiliated third party purchaser” shall specifically exclude a purchaser which (i) is an affiliate of Landlord, or (ii) is acquiring the Right of First Offer Property by eminent domain or threat of eminent domain. As used herein, an “affiliate” of Landlord shall mean an entity (a) which owns a majority of Landlord’s voting equity; (b) which is wholly owned by Landlord or at least fifty-one percent (51%) of whose voting equity is owned by Landlord; or (c) which is controlled, controlling or under common control with Landlord (control being defined for such purposes as ownership of at least fifty percent (50%) of the equity interests in, and the power to direct the management of, the relevant entity).

 

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* Confidential Treatment Requested.


40.3 If Tenant timely delivers the Purchase Commitment, then within three (3) business days following Tenant’s delivery of the Purchase Commitment, Tenant shall execute and deliver three (3) originals of the Purchase Agreement, in the form attached hereto as Exhibit D, to Landlord, modified to reflect the Material Terms and with the following information completed by Tenant: (a) the “Closing Date”; (b) the name and address of the title and escrow company (which shall be designated by Tenant and shall be a reputable national title and escrow company); (c) the effective date of the Purchase Agreement which shall be the date that is two (2) business days following the date of the Purchase Commitment; and (d) complete any other missing exhibits and information as may be required in the Purchase Agreement, as mutually and reasonably approved by the parties. Within three (3) business days following Tenant’s delivery of the Purchase Agreement, as executed by Tenant, Landlord shall counter-sign the three (3) originals of the Purchase Agreement executed by Tenant and deliver all three (3) executed originals to escrow company for further handling in accordance with the terms of the Purchase Agreement. Within three (3) business day following Landlord’s delivery of the three (3) originals of the Purchase Agreement countersigned by Landlord to escrow company, Tenant shall deliver the deposit specified in the Material Terms, to escrow company in accordance with the Purchase Agreement. If Tenant fails to timely deliver the Purchase Commitment, the executed Purchase Agreement or the deposit specified therein in accordance with the terms of this Section, all rights of Tenant to purchase the Right of First Offer Property shall terminate and Landlord shall have no further obligation to notify Tenant of any proposed offer or sale of the Right of First Offer Property and Landlord shall thereafter have the unconditional right to offer, negotiate and sell the Right of First Offer Property to any party, subject to the limitations set forth in Section 40.4 below.

40.4 Time is of the essence with respect to the exercise by Tenant of its rights granted under this Article 40. If Tenant fails to deliver to Landlord the Purchase Commitment within the Exercise Period, Landlord shall thereafter have the unconditional right to offer, negotiate and sell the Right of First Offer Property to any party at the same price or at a price not less than ninety-six and a half percent (96.5%) of the Offer Price and on the same Material Terms within the one hundred eighty (180) day period (the “Sale Period”) following the earlier of (i) Tenant’s written rejection of Landlord’s Offer Notice and (ii) the expiration of the Exercise Period. If Landlord is required to give Tenant a second Landlord’s Offer Notice because (A) the offering price is more than three and one-half percent (3.5%) less than the Offer Price, (B) there is any change in the Material Terms or (C) Landlord fails to sell the Project during the Sales Period, then Landlord shall be required to deliver a new Landlord’s Offer Notice (including the new price and any change to the Material Terms) to Tenant and Tenant shall have only thirty (30) days after receipt of such notice from Landlord to indicate its willingness to buy the Right of First Offer Property at on the terms set forth therein.

40.5 Landlord and Tenant agree that Tenant shall have a right of specific performance to enforce Tenant’s right to the Right of First Offer. In addition, any damages recoverable by Tenant from Landlord as the result of Landlord’s breach of this Article 40 or the Purchase Agreement may be set-off against rent and other amounts due under this Lease. Tenant may assign the Right of First Offer separate and apart from any assignment of this Lease. Tenant shall provide Landlord written notice of any assignment of the Right of First Offer within thirty (30) days following the effective date of such assignment. Tenant may reserve for itself the Right of First Offer separate and apart from any assignment of this Lease.

40.6 If Tenant defaults on any of its obligations under this Lease after delivery of the Purchase Commitment, beyond any applicable cure period, Landlord shall continue with the sale of the Right of First Offer Property to Tenant but shall retain all rights and remedies hereunder with respect to such default.

41. TENANT’S SECURITY SYSTEM. Tenant, at Tenant’s sole cost and expense (subject to application of the Allowance pursuant to Exhibit B hereto), shall have the right to install and maintain a security and card access system in the Premises (“Tenant’s Security System”), subject to the following conditions: (a) Tenant shall be solely responsible, at Tenant’s sole cost and expense, for the monitoring, operation and removal of Tenant’s Security System; and (b) neither Landlord nor any Landlord Entity shall have any obligation to respond to any alarms or false alarms. Notwithstanding anything to the contrary, neither Landlord nor any Landlord Entities shall be directly or indirectly liable to Tenant, any Tenant Entities or any other person and Tenant hereby waives any and all claims against and releases Landlord and the Landlord Entities from any and all claims arising as a consequence of or related to Tenant’s Security System, or the failure thereof.

42. CONFIDENTIALITY PROVISIONS .

42.1 Except as expressly permitted in this Article 42, no Landlord Entity shall without the prior written consent of Tenant, disclose any Confidential Information of Tenant to any third party. Except as expressly permitted in this Article 42, no Tenant Entity shall without the prior written consent of Landlord, disclose any Confidential Information of Landlord to any third party. Information will be considered “Confidential Information” of a party if either (a) it is

 

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disclosed by the party to the other party in tangible form and is conspicuously marked “Confidential”, “Proprietary” or the like; or (b) it is disclosed by one party to the other party in non-tangible form and is identified as confidential at the time of disclosure. In addition, notwithstanding anything in this Lease to the contrary, the terms of this Lease (but not its mere existence) will be deemed Confidential Information of each party.

42.2 Other than the terms and conditions of this Lease, information will not be deemed Confidential Information hereunder if such information (a) is known to the receiving party prior to receipt from the disclosing party directly or indirectly from a source other than one having an obligation of confidentiality to the disclosing party; (b) becomes known (independently of disclosure by the disclosing party) to the receiving party directly or indirectly from a source other than one having an obligation of confidentiality to the disclosing party; (c) becomes publicly known or otherwise ceases to be secret or confidential, except through a breach of this Lease by the receiving party; or (d) is independently developed by the receiving party. The terms and conditions of this Lease will cease being confidential if, and only to the extent that, they become publicly known, except through a breach of this Lease by the receiving party.

42.3 Each party will secure and protect the Confidential Information of the other party (including, without limitation, the terms of this Lease) in a manner consistent with the steps taken to protect its own trade secrets and confidential information, but not less than a reasonable degree of care. Each party may disclose the other party’s Confidential Information where (a) the disclosure is required by applicable law or regulation or by an order of a court or other governmental body having jurisdiction after giving reasonable notice to the other party with adequate time for such other party to seek a protective order; (b) if in the opinion of counsel for such party, disclosure is advisable under any applicable securities laws regarding public disclosure of business information; (c) the disclosure is reasonably necessary and is to that party’s or its affiliates’ employees, officers, directors, attorneys, auditors, accountants, consultants and other advisors, or the disclosure is otherwise necessary for a party to exercise its rights and perform its obligations under this Lease, so long as in all cases the disclosure is no broader than necessary and the party who receives the disclosure agrees prior to receiving the disclosure to keep the information confidential or (d) the disclosure is reasonably necessary for a party to conclude a business transaction. Each party is responsible for ensuring that any Confidential Information of the other party that the first party discloses pursuant to this Article 42 is kept confidential by the person receiving the disclosure.

43. FITNESS CENTER. Tenant hereby acknowledges and agrees that Tenant is solely liable for the operation and management of any fitness center within the Project (a “Fitness Center”) and that Landlord shall not be directly or indirectly liable for the operation and/or management of the Fitness Center. Tenant shall, at its sole cost and expense, comply with Regulations in accordance with the terms of this Lease and with respect to Regulations regarding the construction, operation, and maintenance of the Fitness Center.

44. GENERATOR .

44.1 Landlord acknowledges that Tenant owns all existing supplemental generators located at the Project as of the Commencement Date, and Tenant may also install additional supplemental generators (each, a “New Generator”) and above-ground fuel tanks (each, a “Tank”) to provide emergency additional electrical capacity to the Premises during the Term. The Existing generators and any New Generator are sometimes collectively referred to herein as a Generator” or “Generators.” Subject to Exhibit B attached to this Lease, Tenant may apply the Allowance to the acquisition and installation of any New Generator and Tank as part of the Tenant Improvements. Tenant’s plans for any New Generator and Tank shall, if reasonably prudent as determined by Tenant, include a secondary containment system to protect against and contain any release of Hazardous Materials. The location of any Existing Generator and the location in which any New Generator and the Tank shall be located is referred to herein as the “Generator Area”. Notwithstanding the foregoing, Tenant’s installation of any New Generator and Tank shall be subject to the terms and conditions of Article 6 of this Lease. Tenant shall be solely responsible for obtaining all necessary governmental and regulatory approvals and for the cost of installing, operating, maintaining and removing any Generator and Tank. Tenant shall not install or operate any Generator or Tank until Tenant has obtained and submitted to Landlord copies of all required governmental permits, licenses and authorizations and any other third party approval necessary for the installation and operation of such Generator and Tank. In addition to, and without limiting Tenant’s obligations under the Lease, Tenant shall comply with all applicable environmental and fire prevention Regulations pertaining to Tenant’s use of the Generator Area. Tenant shall also be responsible for the cost of all utilities consumed in the operation of the Generators and Tanks.

44.2 Tenant shall maintain the Generators and Tanks in good working order and repair and shall repair any damage caused by the removal of any of the same, if so removed. To the maximum extent permitted by Regulations, the Generators and Tanks and all appurtenances in the Generator Areas shall be at the sole risk of Tenant, and Landlord shall have no liability to Tenant if any Generator, Tank or any appurtenances installations are damaged for any reason. Tenant agrees to be responsible for any damage caused to the Premises in connection with the installation of any New Generator and Tank, and for the maintenance, operation or removal (if applicable) of the Generators.

 

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44.3 Tenant shall repair any damage caused by removal (if any) of any Generators and Tanks and related appurtenances, including the patching of any holes to match, as closely as possible, the color surrounding the area where the Generators, Tanks and appurtenances were attached. Tenant acknowledges that the existing Generators and Tanks were installed by a prior occupant of the Premises and that Landlord makes no representation or warranty to as to the fitness of the Generators or Tanks for Tenant’s proposed use thereof, or the condition of the Generators and/or Tanks or the compliance thereof with applicable Regulations. Tenant acknowledges that Tenant shall use the Generators and/or Tanks at Tenant’s sole risk and the Landlord shall have no liability to Tenant in connection therewith. TENANT ACKNOWLEDGES AND AGREES THAT, TO THE FULLEST EXTENT PERMITTED BY REGULATIONS, LANDLORD SHALL NOT BE RESPONSIBLE FOR ANY LOSS OR DAMAGE TO TENANT OR TENANT’S PROPERTY ARISING FROM OR RELATED TO TENANT’S USE OF THE GENERATORS AND/OR THE TANKS.

44.4 Upon the expiration or earlier termination of this Lease, Tenant may remove the Generators and Tanks, in Tenant’s sole and absolute discretion, but Tenant shall have no obligation to remove the Generators and Tanks.

45. SATELLITE DISH .

45.1 During the Term and any extension thereof, Tenant shall have the right to install (in accordance with Article 6 of this Lease), operate and maintain one or more dish/antenna or other communication device (individually and collectively, the “Dish/Antenna”). Tenant shall be solely responsible for obtaining and maintaining, at its cost, all necessary governmental and regulatory approvals and any other third party approval and for the cost of installing, operating, maintaining and removing the Dish/Antenna; provided that Tenant shall have the right to apply the Allowance to the cost of the Dish/Antenna pursuant to Exhibit B attached hereto.

45.2 The installing, maintaining and repairing of the Dish/Antenna shall be performed by Tenant or Tenant’s authorized representative or contractors, at Tenant’s sole cost and risk. Tenant agrees to be responsible for any damage caused to the roof or any other part of the Building arising from or related to the Dish/Antenna or appurtenances.

45.3 Tenant shall, at its sole cost and expense, and at its sole risk, install, operate and maintain the Dish/Antenna in a good and workmanlike manner, and in compliance with all Easement Agreements and with all Regulations now in effect or hereafter promulgated, of the Federal Government, including, without limitation, the Federal Communications Commission (the “FCC”), the Federal Aviation Administration (“FAA”) or any successor agency of either the FCC or FAA having jurisdiction over radio or telecommunications and all Easement Agreements. Under this Lease, the Landlord and its agents assume no responsibility for the licensing, operation and/or maintenance of Tenant’s equipment. Neither Landlord nor any Landlord Entity shall be liable to Tenant for any stoppages or shortages of electrical power furnished to the Dish/Antenna because of any act, omission or requirement of the public utility serving the Project and Tenant shall not be entitled to any rental abatement for any such stoppage or shortage of electrical power. Neither Landlord any Landlord Entity shall have any responsibility or liability for the conduct or safety of any of Tenant’s representatives, repair, maintenance and engineering personnel while in or on any part of the roof.

46. SIGNAGE. Tenant shall have the sole and exclusive right to install monument and building signage at the Project in compliance with all applicable Regulations and Easement Agreements. The cost of such signage, including the cost of obtaining any permits, governmental or other third party approvals required therewith, shall be borne by Tenant, provided that, Tenant may, at its option, elect to have the cost of such signage reimbursed as part of the Allowance in accordance with Exhibit B hereto.

47. FURNITURE. Landlord acknowledges that any furniture, fixtures, equipment and other personal property located in, on or about the Project as of the Commencement Date (the “Existing Furniture”) shall be and remain the property of Tenant. Tenant agrees that the Existing Furniture is in its “as is” condition, and that there are no representations or warranties by Landlord regarding the suitability for Tenant’s use, the condition or any other matter relating to the Existing Furniture.

48. WAIVER OF LANDLORD’S LIEN. Notwithstanding anything in this Lease to the contrary, Landlord hereby waives any lien now or hereafter granted to Landlord, by statute, or otherwise (a “Landlord’s Lien”), with respect to Tenant’s personal property, trade fixtures, inventories and/or stock and trade paid for by Tenant and not reimbursed by application of the Allowance or other amounts paid by Landlord. Upon Tenant’s written request, Landlord shall execute a statement acknowledging such lien waiver and providing Tenant’s lender(s) access to the Project following the occurrence of an uncured default under the applicable loan documents for the purpose of removing Tenant’s personal property on a commercially reasonable form.

 

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49. LIMITATION OF TENANT’S LIABILITY. Tenant shall not be liable to Landlord for any lost profits, damage to business, or any form of special, indirect or consequential damages. The obligations of Tenant under this Lease are not intended to be and shall not be personally binding on, nor shall any resort be had to the private properties of, any of Tenant’s directors, officers, partners, beneficiaries, members, stockholders, employees, or agents.

50. LIMITATION OF LANDLORD’S LIABILITY. Redress for any claim against Landlord under this Lease shall be limited to and enforceable only against and to the extent of Landlord’s interest in the Project (which shall be deemed to include proceeds actually received by Landlord from any sale of the Project, insurance or condemnation proceeds, and rental income from the Project); provided, that, redress for any claim against Landlord under this Lease for failure to timely pay the Allowance shall be enforceable against all of the assets of Landlord (including without limitation Landlord’s interest in the Project). The obligations of Landlord under this Lease are not intended to be and shall not be personally binding on, nor shall any resort be had to the private properties of, any of its or its investment manager’s trustees, directors, officers, partners, beneficiaries, members, stockholders, employees, or agents, and in no case shall Landlord be liable to Tenant hereunder for any lost profits, damage to business, or any form of special, indirect or consequential damages. Nothing set forth in this Lease shall limit Tenant’s rights and remedies under (i) that certain Subscription Agreement dated on or about the date hereof among Landlord, the State of Wisconsin Investment Board (“SWIB”) and RREEF America L.L.C., (ii) that certain Investor Letter dated on or about the date hereof between Landlord, Tenant and SWIB, (iii) that certain Pledge and Security Agreement dated on or about the date hereof between Landlord and Tenant, or (iv) that certain Deposit Account Control Agreement dated on or about the date hereof among Landlord, Tenant and Wells Fargo Bank, N.A (collectively, the “Lease Security Documents”).

51. JAMS ARBITRATION .

51.1 The submittal of all matters to binding arbitration in accordance with the terms of this Article 51 as expressly set forth in any Section of this Lease (the “Arbitration of Disputes” provision) shall be binding upon the parties. After delivery of an Arbitration Notice, the parties hereby irrevocably waive any and all rights to the contrary and shall at all times conduct themselves in strict, full, complete and timely accordance with this Arbitration of Disputes provision and all attempts to circumvent the terms of the Arbitration of Disputes provision shall be absolutely null and void and of no force or effect whatsoever.

51.2 All disputes to be arbitrated pursuant to the Arbitration of Disputes provision shall be determined by binding arbitration before a retired judge of the Superior Court of the State of California (the “Arbitrator”) under the auspices of JAMS in San Francisco, California. Such arbitration shall be initiated by the parties, or either of them, within ten (10) days after Landlord delivers an Arbitration Notice to Tenant. In the event that JAMS no longer exists or if JAMS fails or refuses to accept submission of such dispute, then the dispute shall be resolved by binding arbitration before the American Arbitration Association (“AAA”) in San Francisco, California. Regardless of the alternative dispute resolution provider used (i.e., either JAMS or AAA), the arbitration shall be administered and conducted pursuant to the JAMS Streamlined Arbitration Rules & Procedures (the “Arbitration Rules”), effective March 26, 2007. Even if the Rules in effect on the date of the commencement of an arbitration have been amended, the version dated March 26, 2007 shall be used; provided, however, that the following modifications shall take precedence over the Rules:

51.2.1 Unless the parties otherwise agree, the Arbitrator must be a retired judge of the Superior Court of the State of California.

51.2.2 The scope and duration of discovery will be determined by the Arbitrator based upon the reasonable need for the requested information, the availability of other discovery options and the burdensomeness of the request on the opposing parties and the witness; provided, however, that there shall be a presumption in favor of depositions of expected percipient witnesses (of approximately 3 1/2 hours each on the record) and expert witnesses (of no more than 6 hours each on the record).

51.2.3 The Arbitrator may grant any remedy or relief that is just and equitable and within the scope of the parties’ agreement, including but not limited to specific performance, injunctive relief, damages, and interest.

51.2.4 The Arbitrator shall award reasonable attorney’s fees, expert’s fees, and costs to the prevailing party, including without limitation the prevailing party’s share of the Arbitrator’s and Arbitration provider’s fees and costs.

 

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51.2.5 The Arbitrator shall be empowered to adjudicate whether the party submitting the dispute to the Arbitrator acted in good faith.

51.3 NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE “ARBITRATION OF DISPUTES” PROVISION DECIDED BY NEUTRAL ARBITRATION AS PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY INITIALLY IN THE SPACE BELOW YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN THE “ARBITRATION OF DISPUTES” PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATION PROVISION IS VOLUNTARY.

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE “ARBITRATION OF DISPUTES” PROVISION TO NEUTRAL ARBITRATION.

 

/s/ SS

   

/s/ DE

Landlord Initials     Tenant’s Initials

 

30


IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the Commencement Date as set forth in the Reference Pages of this Lease.

 

LANDLORD:     TENANT:
WILSON MENLO PARK CAMPUS, LLC,     FACEBOOK, INC.,
a Wisconsin limited liability company     a Delaware corporation
By:  

/s/ Steven C. Spiekerman

   
 

Steven C. Spiekerman

    By:  

/s/ David Ebersman

 

Vice President

   
      Name:  

David Ebersman

       
      Title:  

Chief Financial Officer


EXHIBIT A-1 – THE PREMISES

attached to and made a part of the Lease bearing the

Commencement Date of February 7, 2011 between

WILSON MENLO PARK CAMPUS, LLC, a Wisconsin limited liability company, as Landlord

and

FACEBOOK, INC., a Delaware corporation, as Tenant

Exhibit A-1 is intended only to show the general layout of the Premises as of the beginning of the Term of the Lease.

 

A-1-1


LOGO


EXHIBIT A-2 – LEGAL DESCRIPTION OF THE PROJECT

attached to and made a part of the Lease bearing the

Commencement Date of February 7, 2011 between

WILSON MENLO PARK CAMPUS, LLC, a Wisconsin limited liability company, as Landlord

and

FACEBOOK, INC., a Delaware corporation, as Tenant

REAL PROPERTY IN THE CITY OF MENLO PARK, COUNTY OF SAN MATEO, STATE OF CALIFORNIA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

PARCEL ONE:

PARCELS 1, 2, 3 & 4 AS SHOWN ON PARCEL MAP, LANDS OF BNP LEASING CORPORATION, FILED FEBRUARY 16, 1994, BOOK 67 OF PARCEL MAPS, PAGES 36 THROUGH 38 INCLUSIVE, SAN MATEO COUNTY RECORDS AND CORRECTED BY THAT CERTIFICATE OF CORRECTION RECORDED OCTOBER 12, 1994 AS DOCUMENT NO. 94-158967 OFFICIAL RECORDS, SAN MATEO COUNTY.

PARCEL TWO:

NON-EXCLUSIVE EASEMENTS FOR UTILITIES, FIRE PROTECTION WATER MAIN AND PIPES AND PRIMARY ACCESS AS GRANTED IN THAT CERTAIN EASEMENT AGREEMENT RECORDED OCTOBER 29, 1993 AS INSTRUMENT NO. 93186615, OFFICIAL RECORDS.

APN: 055-411-110, 120, 130 and 140

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

A-2-1


EXHIBIT B – TENANT IMPROVEMENTS

attached to and made a part of the Lease bearing the

Commencement Date of February 7, 2011 between

WILSON MENLO PARK CAMPUS, LLC, a Wisconsin limited liability company, as Landlord

and

FACEBOOK, INC., a Delaware corporation, as Tenant

This work letter (this “Work Letter”) is attached to and made a part of the Lease between Landlord and Tenant. All references in this Work Letter to Articles or Sections of “this Lease” shall mean the relevant portions of Articles 1 through 51 of the Lease to which this Work Letter is attached as Exhibit B , and all references in this Work Letter to Sections of “this Work Letter” shall mean the relevant portions of Sections 1 through 5 of this Work Letter.

SECTION 1

ACCEPTANCE OF CONDITION OF PREMISES

1.1  Condition of Premises on Delivery . Tenant has accepted the Premises in its “as-is” condition and configuration, it being agreed that Landlord shall not be required to perform any work or incur any costs in connection with the construction or demolition of any improvements at the Premises.

SECTION 2

TENANT IMPROVEMENTS

2.1  Allowance . Tenant shall be entitled to a one-time tenant improvement allowance (the “Allowance”) in the total amount of One Hundred Million Dollars $100,000,000.00 for the costs relating to the design, installation and construction of Tenant’s improvements to the Project (the “Tenant Improvements”) and the design, acquisition and installation of Tenant’s Furniture (as hereinafter defined) to be located within the Project. In no event shall Landlord be obligated to make disbursements pursuant to this Work Letter in a total amount which exceeds the Allowance

2.1.1  Furniture . Subject to the provisions contained herein, Tenant shall be entitled to apply up to twenty percent (20%) of the Allowance for the design, acquisition and installation of furniture, equipment and other movable personal property not affixed to the Project (the “Furniture”) to be located at all times at the Premises and for use by Tenant in the Premises. The Furniture shall be the property of Landlord until the expiration or earlier termination of the Lease (provided that Tenant, not Landlord, shall be responsible for all costs associated with such Furniture, including, without limitation, the cost of insuring the same, all maintenance and repair costs and taxes), at which time the Furniture shall become the property of Tenant as if by bill of sale hereunder and Tenant shall at that time be entitled to remove the Furniture from the Premises. Tenant shall maintain and repair the Furniture in good condition and shall insure the Furniture to the same extent Tenant is required to insure Tenant’s Personal Property pursuant to the terms of the Lease. Notwithstanding the foregoing, if the Lease is terminated prior to the Termination Date as the result of an Event of Default, then the Furniture shall remain the property of Landlord; provided, that, Tenant may elect to pay Landlord the unamortized portion of the costs of the Furniture and in such event the Furniture shall at that time become the property of Tenant

2.2  Disbursement of the Allowance .

2.2.1  Allowance Items . Except as otherwise set forth in this Work Letter, the Allowance shall be disbursed by Landlord for any and all costs in any way related to the design and construction of the Tenant Improvements and the Furniture (collectively the “Allowance Items”), including, without limitation, the following:

2.2.1.1 Payment of the fees of the “Architect” and the “Engineers,” as those terms are defined in Section 3.1 of this Work Letter;

2.2.1.2 The payment of plan check, permit and license fees relating to construction of the Tenant Improvements;

 

B-1


2.2.1.3 The cost of construction and installation of the Tenant Improvements, including, without limitation, testing and inspection costs and contractors’ fees and general conditions;

2.2.1.4 The cost of obtaining any Entitlements or modifications thereto;

2.2.1.5 The cost of any changes in the base building;

2.2.1.6 The cost of any changes to the Tenant Improvements required by all applicable building codes (the “Code”);

2.2.1.7 Payment of the fees of any other consultants (excluding attorneys) retained by Tenant in connection with the design, construction and installation of the Tenant Improvements and the Furniture;

2.2.1.8 Sales and use taxes;

2.2.1.9 The cost of the Furniture and the construction and installation thereof;

2.2.1.10 The costs of the design, construction and installation of fixtures, network systems, audio/visual systems, cabling and wiring and any other infrastructure, Generators, Tanks, Tenant’s Security System, Dish/Antenna and signage; and

2.2.1.11 Modifications to the exterior portions of the Project, including, without limitation, courtyards and parking areas.

2.2.2  Disbursement of Allowance . During the construction of the Tenant Improvements, Landlord shall make monthly disbursements of the Allowance for Allowance Items for the benefit of Tenant and shall authorize the release of monies for the benefit of Tenant as follows.

2.2.2.1  Monthly Disbursements . Landlord and Tenant shall cooperate and work together in good faith in connection with Tenant’s preparation of materials to support Tenant’s request for a monthly disbursement of the Allowance. Tenant may monthly deliver to Landlord a request for payment, including, (i) for informational purposes only, the schedule of values, by trade, of percentage of completion of the Tenant Improvements in the Premises, detailing the portion of the work completed and the portion not completed, (ii) valid and binding executed conditional mechanic’s lien releases from all of Tenant’s contractors (along with unconditional mechanics lien releases with respect to payments made pursuant to Tenant’s prior submission hereunder), (iii) payment receipts (or invoices if Tenant is making the election in clause (y) below) from any other consultants retained by Tenant in connection with the design, construction and installation of the Tenant Improvements and the Furniture for which Tenant is seeking reimbursement, and (iii) payment receipts (or invoices if Tenant is making the election in clause (y) below) for Allowance Items for which reimbursement is requested (collectively, a “Draw Package”). Within thirty (30) days after receipt of a Draw Package, Landlord shall, at Tenant’s election, either (x) deliver a check to Tenant made payable to Tenant or (y) deliver a check to the contractor made payable to the contractor, in payment of the lesser of: (A) the amounts so requested by Tenant, as set forth in this Section 2.2.2.1 and (B) the balance of any remaining available portion of the Allowance. Landlord’s payment of such amounts shall not be deemed Landlord’s approval or acceptance of the work furnished or materials supplied as set forth in Tenant’s payment request. The collective monthly disbursements of the Allowance shall not exceed the amounts at the given dates as set forth on Schedule I attached to this Work Letter.

2.2.2.2  Other Terms . Landlord shall only be obligated to make disbursements from the Allowance to the extent costs are incurred by Tenant for Allowance Items. In the event that Tenant shall fail to use the entire Allowance within three (3) years following the Commencement Date of the Lease or if prior to such date, Tenant notifies Landlord in writing that the Tenant Improvements are complete and no further Draw Packages shall be submitted for payment (Tenant’s “Allowance Waiver Notice”), which Allowance Waiver Notice shall be deemed Tenant’s waiver and release of any remaining and undisbursed portion of the Allowance, then (i) if Tenant exercises any option set forth in the Lease to purchase the Project, then the Purchase Price shall be reduced by an amount equal to the unused portion of the Allowance, and (ii) effective either (a) from and after the date which is three (3) years following the Commencement Date through the expiration of the initial Term, or (b) from and after the date Landlord receives Tenant’s Waiver Notice through the expiration of the initial Term, which ever is applicable, the Annual Rent shall be reduced by an amount equal to 8% multiplied by the amount of the unused portion of the Allowance.

 

B-2


SECTION 3

ARCHITECT/ENGINEERS; APPROVAL

3.1  Selection of Architect/ Engineers . Tenant and Landlord acknowledge and agree that the construction of the Tenant Improvements hereunder may be performed on a Building by Building basis and, accordingly, the process for plan approval as set forth herein shall apply in kind. Tenant shall retain architect/space planners elected by Tenant in its sole and absolute discretion (the “Architect”) to prepare the “Construction Drawings,” as that term is defined in this Section 3.1. Tenant shall retain the engineering consultants elected by Tenant in its sole and absolute discretion (the “Engineers”) to prepare all plans and engineering working drawings relating to the structural, mechanical, electrical, plumbing, HVAC, life-safety, and sprinkler work in the Premises, which work is not part of the base building. The plans and drawings to be prepared by Architect and the Engineers hereunder shall be known collectively as the “Construction Drawings.” Tenant and Architect shall verify, in the field, the dimensions and conditions as shown on the relevant portions of the base building plans, and Tenant and Architect shall be solely responsible for the same, and Landlord shall have no responsibility in connection therewith.

3.2  Approval of Alterations . As set forth in Article 6 of the Lease, Tenant may make Minor Alterations to the Project without Landlord’s consent. Article 6 of the Lease shall govern any Tenant Improvements which constitute Major Alterations.

3.3  Working Drawings; Permits . Tenant shall deliver two (2) copies of Tenant’s final working drawings for the Tenant Improvements (the “Working Drawings”), which Working Drawings may be prepared and submitted on a building-by building phased basis (at Tenant’s discretion), to Landlord concurrent with Tenant’s submission the same to the appropriate municipal authorities for all applicable building permits. Tenant hereby agrees that neither Landlord nor Landlord’s consultants shall be responsible for obtaining any building permit or certificate of occupancy for the Premises and that obtaining the same shall be Tenant’s responsibility; provided, however, that Landlord shall cooperate with Tenant in executing permit applications and performing other ministerial acts reasonably necessary to enable Tenant to obtain any such permit or certificate of occupancy. Tenant shall not commence construction until all required governmental permits are obtained.

SECTION 4

CONSTRUCTION OF THE TENANT IMPROVEMENTS

4.1  Tenant’s Selection of Contractors .

4.1.1  Tenant’s Selection of Contractors . A general contractor (“Contractor”) selected by Tenant in Tenant’s sole discretion shall be retained by Tenant to construct the Tenant Improvements.

4.2  Construction of Tenant Improvements .

4.2.1  Indemnity . Tenant’s indemnity of Landlord as set forth in this Lease shall also apply with respect to any and all costs, losses, damages, injuries and liabilities related in any way to any act or omission of Tenant or Tenant agents, employees, and contractors, or anyone directly or indirectly employed by any of them, or in connection with Tenant’s non-payment of any amount arising out of the Tenant Improvements. Such indemnity by Tenant shall also apply with respect to any and all costs, losses, damages, injuries and liabilities related in any way to Landlord’s performance of any ministerial acts reasonably necessary (i) to permit Tenant to complete the Tenant Improvements, and (ii) to enable Tenant to obtain any building permit or certificate of occupancy for the Premises.

4.2.2  Insurance Requirements . Tenant shall be required to maintain insurance as set forth in Article 11 of the Lease, including without limitation, Section 11.3 of the Lease.

4.2.3  Inspection by Landlord . Landlord shall have the right to inspect the Tenant Improvements at reasonable times following reasonable prior notice to Tenant and during regularly scheduled construction meetings.

4.2.4  Meetings . Landlord shall receive one (1) business day’s prior notice of, and shall have the right to attend, any meetings with the Architect and the Contractor regarding the progress of the preparation of Construction Drawings and the construction of the Tenant Improvements; provided, that, Tenant shall not be required to hold any such meetings.

 

B-3


4.3  Notice of Completion; Copy of Record Set of Plans . Within ten (10) days after completion of construction of the Tenant Improvements (or any phase of the Tenant Improvements if completed and permitted on a building-by-building or other such basis), Tenant shall cause a Notice of Completion to be recorded in the office of the Recorder of the county in which the Project is located in accordance with Section 3093 of the Civil Code of the State of California or any successor statute, and shall furnish a copy thereof to Landlord upon such recordation. If Tenant fails to do so, Landlord may execute and file the same on behalf of Tenant as Tenant’s agent for such purpose, at Tenant’s sole cost and expense. At the conclusion of construction, Tenant shall cause the Architect and Contractor (A) to update the Working Drawings as necessary to reflect all changes made to the Working Drawings during the course of construction, and (B) to deliver to Landlord (i) two (2) CD ROMS of such updated Working Drawings in Landlord’s CAD file format and in PDF format, and (ii) copies of all warranties, guaranties, and operating manuals and information relating to the improvements, equipment, and systems in the Premises, and (iii) copies of all temporary and final Certificates of Occupancy issued in connection with the Tenant Improvements.

SECTION 5

MISCELLANEOUS

5.1  Tenant’s Representative . Tenant has designated Jim Merryman as its sole representative with respect to the matters set forth in this Work Letter, who shall have full authority and responsibility to act on behalf of the Tenant as required in this Work Letter; provided, that, Tenant may change Tenant’s designated representative from time to time upon written notice to Landlord.

5.2  Landlord’s Representative . Landlord has designated Catherine Minor as its sole representative with respect to the matters set forth in this Work Letter, who, until further notice to Tenant, shall have full authority and responsibility to act on behalf of the Landlord as required in this Work Letter.

5.3  Time of the Essence in This Work Letter; Tenant Cooperation with Lender . Unless otherwise indicated, all references herein to a “number of days” shall mean and refer to calendar days.

5.4  Tenant’s Lease Default . Notwithstanding any provision to the contrary contained in this Lease, if a monetary Event of Default as described in the Lease or this Work Letter has occurred at any time on or before the completion of the Tenant Improvements, then (i) in addition to all other rights and remedies granted to Landlord pursuant to this Lease, Landlord shall have the right to withhold payment of all or any portion of the Allowance until such monetary Event of Default has been cured, and (ii) all other obligations of Landlord under the terms of this Work Letter shall be forgiven until such time as such default is cured pursuant to the terms of this Lease (in which case, Tenant shall be responsible for any delay in the substantial completion of the Premises caused by such inaction by Landlord).

5.5  Ownership of Tenant Improvements . The Tenant Improvements shall be deemed, effective upon installation, to be a part of the Premises and shall be deemed to be the property of Landlord (subject to Tenant’s right to use the same during the Term), and shall be surrendered with the Premises at the expiration or earlier termination of the Term, except as otherwise provided by the express terms and conditions of the Lease.

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B-4


Schedule 1 – Tenant Improvement Rent Schedule

 

Lease Month    As of      Cumulative
Funding Cap
 

1

     2/1/2011         $3,000,000   

2

     3/1/2011         $5,500,000   

3

     4/1/2011         $8,000,000   

4

     5/1/2011         $17,500,000   

5

     6/1/2011         $27,700,000   

6

     7/1/2011         $38,000,000   

7

     8/1/2011         $46,500,000   

8

     9/1/2011         $54,800,000   

9

     10/1/2011         $60,900,000   

10

     11/1/2011         $66,200,000   

11

     12/1/2011         $66,200,000   

12

     1/1/2012         $70,100,000   

13

     2/1/2012         $74,000,000   

14

     3/1/2012         $77,800,000   

15

     4/1/2012         $81,700,000   

16

     5/1/2012         $85,600,000   

17

     6/1/2012         $89,500,000   

18

     7/1/2012         $93,400,000   

19

     8/1/2012         $97,200,000   

20

     9/1/2012         $100,000,000   

 

S-1


EXHIBIT C – RULES AND REGULATIONS

attached to and made a part of the Lease bearing the

Commencement Date of February 7, 2011 between

WILSON MENLO PARK CAMPUS, LLC, a Wisconsin limited liability company, as Landlord

and

FACEBOOK, INC., a Delaware corporation, as Tenant

Tenant shall not place a load upon any floor of its Premises, including mezzanine area, if any, which exceeds the load per square foot that such floor was designed to carry and that is allowed by law. Heavy objects shall stand on such platforms as determined by Landlord to be necessary to properly distribute the weight. Landlord will not be responsible for loss of or damage to any such equipment or other property from any cause, and all damage done to the Building by maintaining or moving such equipment or other property shall be repaired at the expense of Tenant.

Tenant shall not bring any vehicles other of any kind into the Building except in compliance with the following requirements: (a) such vehicles shall not be left running while inside the Premises; (b) Tenant shall be solely responsible for installing, at Tenant’s sole cost and expense, any ventilation system or other alterations and improvements (the “Ventilation System”) in the Premises required by Regulations as a result of such vehicles being driven into the Premises; and (c) Tenant shall obtain all permits and other governmental approvals required for such use of the Premises.

Tenant assumes all responsibility for securing and protecting its Premises and its contents including keeping doors locked and other means of entry to the Premises closed.

In no event shall any portion of the Premises be used or occupied or permitted to be used or occupied for any of the following purposes: (i) any nightclub or any discotheque; (ii) any adult bookstore or video shop, nude or semi-nude or “adult” entertainment establishment or any lewd, obscene or pornographic purpose; (iii) any store in which a material portion of the inventory is not available for sale or rental to children under 18 years of age because such inventory explicitly deals with, relates to, or depicts human sexuality, or in which any of the inventory constitutes drug paraphernalia of the kind associated with or sold by so-called “head shops”; (iv) any dumping, disposing, incineration or reduction of garbage (exclusive of appropriately screened dumpsters and/or recycling bins located in the rear of any building and garbage disposal in the ordinary course of business); (v) any mortuary; (vi) any fire sale, bankruptcy sale (unless pursuant to a court order) or auction house operation; (vii) any gas station; (viii) any automobile, truck, trailer or RV sales, leasing, display or repair; (ix) any “flea market”, secondhand, surplus or other “off-price” or deep discount store; (x) any gambling or off-track betting operation, or (xi) any massage parlor or carnival.

Tenant shall be responsible for the observance of all of the foregoing rules by Tenant’s employees, agents, clients, customers, invitees and guests.

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C-1


EXHIBIT D – FORM OF PURCHASE AGREEMENT

attached to and made a part of the Lease bearing the

Commencement Date of February 7, 2011 between

WILSON MENLO PARK CAMPUS, LLC, a Wisconsin limited liability company, as Landlord

and

FACEBOOK, INC., a Delaware corporation, as Tenant

 

D-1


PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

                         , 20    

BY AND BETWEEN

                                         ,

a                 

“Buyer”

AND

                                         ,

a                 

“Seller”


PURCHASE AND SALE AGREEMENT

AND JOINT ESCROW INSTRUCTIONS

THIS PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this “ Agreement ”) is made and entered into as of                  , 20     (“ Execution Date ”), by and between                                          , a                                          (“ Buyer ”), and                     , a                      (“ Seller ”), for the purposes of setting forth the agreement of the parties and of instructing                                          (“ Escrow Agent ”), with respect to the transactions contemplated by this Agreement.

RECITALS

Upon and subject to the terms and conditions set forth in this Agreement, Seller desires to sell and Buyer desires to purchase the following (collectively, the “ Property ”):

(i) the fee interest in that certain real property commonly known as and located in the City of Menlo Park, County of San Mateo, State of California, as legally described on Exhibit A attached hereto, together with all rights, privileges and easements appurtenant thereto or used in connection therewith, including, without limitation, all minerals, oil, gas and other hydrocarbon substances thereon, all development rights, air rights, water, water rights and water stock relating thereto, all strips and gores, and all of Seller’s right, title and interest in and to any streets, alleys, easements, rights-of-way, public ways, or other rights appurtenant, adjacent or connected thereto or used in connection therewith (collectively, the “ Land ”);

(ii) all buildings, improvements, structures and fixtures now or hereafter included or located on or in the Land (collectively, the “ Improvements ”, and together with the Land, the “ Real Property ”), and all apparatus, equipment, appliances and other fixtures used in connection with the operation or occupancy of the Land and the Improvements, such as heating, air conditioning or mechanical systems and facilities used to provide any utility services, refrigeration, ventilation, waste disposal or other services now or hereafter located on or in the Land or the Improvements;

(iii) all tangible personal property, equipment and supplies (collectively, the “ Personal Property ”) now or hereafter owned by Seller and located on or about the Land or the Improvements or attached thereto or used in connection with the use, operation, maintenance or repair thereof; and

(iv) all intangible property (collectively, the “ Intangible Property ”) now or hereafter owned by Seller and used in connection with the Land, the Improvements or the Personal Property, including, without limitation, building-specific trademarks and trade names, transferable licenses, architectural, site, landscaping or other permits, applications, approvals, authorizations and other entitlements, transferable guarantees and warranties covering the Land and/or Improvements, all contract rights affecting the property, including service, maintenance, repair, or supply contracts, oral or written, identified on Exhibit C (the “ Service Contracts ”), books, records, reports, test results, environmental assessments, as-built plans, specifications and other similar documents and materials relating to the use or operation, maintenance or repair of the Property or the construction or fabrication thereof, and all transferable utility contracts.

 

1


NOW, THEREFORE, in consideration of the foregoing Recitals which are incorporated herein by this reference, the mutual covenants contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller hereby agree, and instruct Escrow Agent, as follows:

 

1. AGREEMENT TO PURCHASE AND SELL; CONSIDERATION.

 

1.1 Agreement . This Agreement is being entered into pursuant to the exercise of a “Purchase Option” (as defined in the Lease (as hereinafter defined)). Subject to all of the terms and conditions of this Agreement, Seller agrees to sell, transfer and convey to Buyer, and Buyer agrees to acquire and purchase from Seller, the Property upon the terms and conditions set forth herein.

 

2. PURCHASE PRICE.

The purchase price for the Property (the “ Purchase Price ”) shall be the sum of [*], payable as follows:

 

2.1 Deposit . Not later than the date which is one Business Day (as hereinafter defined) after the Execution Date, Buyer shall deposit into Escrow the sum of [*] (which amount, together with any and all interest and dividends earned thereon, shall hereinafter be referred to as the “ Deposit ”).

Escrow Agent shall deposit the Deposit in a non-commingled trust account and shall invest the Deposit in insured money market accounts, certificates of deposit, United States Treasury Bills or such other instruments as Buyer may instruct from time to time. In the event of the consummation of the purchase and sale of the Property as contemplated hereunder, the Deposit shall be paid to Seller at the Closing (as defined in Section 8 below) and credited against the Purchase Price. In the event the sale of the Property is not consummated because of the termination of this Agreement by Buyer in accordance with any right to so terminate provided herein, or the failure of any Buyer’s Conditions Precedent (hereinafter defined), Buyer shall notify Escrow Agent in writing of the same, and the Deposit shall be promptly returned to Buyer. The Deposit shall be considered fully earned by Seller as consideration for entering into this Agreement and shall be nonrefundable to Buyer except as otherwise provided herein.

 

2.2 Balance . On the Closing Date (as defined below), Buyer shall pay to Seller the balance of the Purchase Price over and above the Deposit paid by Buyer under Section 2.1 above, by wire transfer of federal funds to Escrow Agent, net of all adjustments as provided herein.

 

3. TITLE.

 

3.1

Approved form of Title . Buyer has approved all exceptions to title shown in the proforma title policy attached hereto as Exhibit D . Not later than 5 days after the

 

2

* Confidential Treatment Requested.


  Execution Date, Buyer shall order (a) an ALTA extended coverage preliminary title report (the “ PTR ”) issued by [                    ] (in such capacity, “ Title Company ”), together with legible copies of all documents referenced as exceptions therein, and (b) a current As-Built American Land Title Association survey of the Property, or an update to the Existing Survey if Seller has delivered an Existing Survey to Buyer by the end of such 5-day period (the updated Existing Survey or a new survey, as applicable, the “ Survey ”) in each case in form reasonably satisfactory to Buyer, prepared by a surveyor licensed in the State where the Property is located and certified to Buyer, Seller, Title Company, and such other persons or entities as Buyer may, in its discretion, request. Buyer shall promptly provide Seller with copies of the PTR, and Survey (and any updates or revisions thereto) to the extent the same have been received by Buyer prior to any termination of this Agreement.

 

3.2 Title Conditions . At the Closing, Seller shall convey to Buyer, and Buyer shall accept from Seller, fee simple title to the Property subject to the exceptions shown in the proforma title policy attached as Exhibit D , exceptions approved or deemed approved by Buyer pursuant to Section 3.3 below, exceptions approved by Buyer in writing after the date hereof, and the following matters (collectively, the “ Permitted Exceptions ”):

 

  3.2.1 Taxes . Liens for non-delinquent real property taxes and assessments.

 

  3.2.2 Laws and Regulations . All applicable laws, ordinances and regulations, including those relating to zoning or land use.

 

  3.2.3 Survey Matters . Any matters or state of facts shown by any survey or any update thereof.

 

  3.2.4 Matters Created by Buyer or its Affiliates . Any matters or interests created by Buyer, its Affiliates or their agents or representatives.

 

  3.2. 5 Standard Exceptions . The printed standard exceptions listed in the “Owner’s Title Policy” (as defined herein).

 

  3.2. 6 Lease . To the extent the Lease is not terminated at Closing, all rights of the tenant under the Lease.

For purposes hereof, the term “ Affiliate ” shall mean an entity that is directly or indirectly, through one or more intermediaries, controlling, controlled by or under common control with Buyer (control being defined for such purposes as ownership of at least fifty percent (50%) of the equity interests in, and the power to direct the management of, the relevant entity).

 

3.3

Buyer’s Review of Title . Buyer shall have until a date that is 10 Business Days following Buyer’s receipt of the PTR (the “ Title Review Termination Date ”) to notify Seller in writing of any objection which Buyer may have to any matters reported or shown in the PTR or Survey that are not then Permitted Exceptions under Section 3.2 (“ Buyer’s Objection Letter ”). Matters reported in or shown by the PTR or Survey and not timely objected to by Buyer as provided above together with any exceptions that are

 

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  expressly approved by Buyer, shall be deemed thereafter to be “ Permitted Exceptions ”. Seller shall have no obligation to cure or correct any matter objected to by Buyer. However, on or before the 5th Business Day following Seller’s receipt of Buyer’s Objection Letter, Seller may elect, by delivering written notice of such election to Buyer (“ Seller’s Response ”) whether to cause Title Company to remove or insure over any matters objected to in Buyer’s Objection Letter. If Seller fails to deliver Seller’s Response within the time frame set forth above, it shall be deemed to be an election by Seller not to cause Title Company to so remove or insure over such objections. If Seller elects (or is deemed to have elected) not to cause Title Company to so remove or insure, then Buyer must elect, by delivering written notice of such election to Seller and Escrow Agent on or before the earlier to occur of (a) the 3rd Business Day following Buyer’s receipt of Seller’s Response or (b) if no Seller’s Response is received by Buyer, the 3rd Business Day following the date on which Seller shall have been deemed to have responded, as provided above, to: (i) terminate this Agreement (in which case Escrow Agent shall return the Deposit to Buyer, the parties shall equally share the cancellation charges of Escrow Agent and Title Company, if any, and neither party shall thereafter have any rights or obligations to the other hereunder, other than pursuant to any provision hereof which expressly survives the termination of this Agreement); or (ii) proceed to a timely Closing whereupon such objected to exceptions or matters shall be deemed to be Permitted Exceptions. In the event that Buyer fails to make such election on a timely basis, then Buyer shall be deemed to have elected to proceed to a timely Closing in accordance with the preceding clause (ii) . If Seller elects to cause Title Company to remove or insure over any matters objected to in Buyer’s Objection Letter, Seller thereafter fails to do so prior to Closing and such failure continues for a period of thirty (30) days following written notice to Seller and extension of the Closing Date by Seller in its sole discretion for up to thirty (30) days to effectuate a cure, then, so long as Buyer shall not be in default of this Agreement, Buyer may elect on or before the Closing Date, as so extended by Seller for up to thirty (30) days, to either (x) terminate this Agreement (in which case Escrow Agent shall return the Deposit to Buyer, the parties shall equally share the cancellation charges of Escrow Agent and Title Company, if any, and neither party shall thereafter have any rights or obligations to the other hereunder, other than pursuant to any provision hereof which expressly survives the termination of this Agreement); or (y) proceed to a timely Closing whereupon such uncured but objected to exceptions or matters shall be deemed to be Permitted Exceptions. In the event that Buyer fails to make such election on a timely basis, then Buyer shall be deemed to have elected to proceed to a timely Closing in accordance with the preceding clause (y).

 

3.4

Title Exceptions Disclosed After the Execution Date . If, after Buyer’s delivery of Buyer’s Objection Letter (or, if Buyer does not deliver a Buyer’s Objection Letter, after the period during which Buyer may deliver a Buyer’s Objection Letter has expired), the Title Company issues a new or supplemental title report that discloses one or more exceptions that were not disclosed to Buyer in the PTR, then (i) any exception that is of the nature of one of the conditions of title described in Sections 3.2.1 through 3.2.5 , shall become a Permitted Exception, and (ii) with respect to any exception that is not of the nature of the items described in Sections 3.2.1 through 3.2.5 , subject to the last sentence of this Section 3.3 , Buyer shall have until 5:00 p.m. San Francisco time on the date that is five (5) Business Days after Buyer’s receipt of the new or supplemental title commitment

 

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  and the underlying document for such exception to notify Seller in writing as to whether Buyer approves or disapproves the new exception. If Buyer approves such exception or fails to give notice by the time required under the previous sentence, then such exception shall become a Permitted Exception. If Buyer timely disapproves a new exception as permitted by this Section 4.2.4 , then, subject to the last sentence of this Section 4.2.4 , Seller shall have until 5:00 p.m. San Francisco time on the date that is two (2) Business Days after its receipt of Buyer’s disapproval notice to notify Buyer as to whether Seller will attempt to cause the new exception to be removed or insured against prior to or at Closing. Seller’s failure to give any such notice by the time required under the previous sentence shall be deemed to constitute Seller’s refusal to attempt to cause the new exception to be removed or insured against. Subject to the last sentence of this Section  3.3 , Buyer shall have until 5:00 p.m. San Francisco time on the date that is three (3) Business Day after its receipt of a notice from Seller in which Seller refuses to attempt to cause the new exception to be removed or insured against to either (a) send notice waiving its disapproval of the new exception, in which event the exception shall become a Permitted Exception, or (b) deliver written notice to Seller of Buyer’s election to terminate this Agreement. Buyer’s failure to deliver a waiver notice to Seller in the time required by the previous sentence shall be deemed to constitute Buyer’s waiver of its disapproval of the new exception. The Closing Date shall be extended, if and as necessary, to enable Buyer and Seller to have the time periods provided above in this Section 3.3 to make the various elections described herein and to provide Seller with a period of up to thirty (30) days to extend the Closing Date at Seller’s election in Seller’s sole discretion, in order to cause such exception to be removed.

 

3.5

Seller’s Obligations Regarding Title . Notwithstanding anything to the contrary set forth herein, Seller shall take all action necessary to remove from title to the Property (or in the alternative, Seller may obtain for Buyer title insurance insuring over such exceptions or matters, such insurance to be in form and substance satisfactory to Buyer in its sole discretion) the following matters: (a) all exceptions to title and survey matters created by Seller on or after the Execution Date without the prior written consent of Buyer (which consent may be withheld in Buyer’s sole and absolute discretion); (b) any and all liens and encumbrances for deeds of trusts, mortgages, judgments against Seller and mechanics’ liens caused by Seller (other than installments of real estate taxes or assessments not delinquent as of the Closing); (c) any matters created by Seller or any of its predecessors in violation of the terms and conditions of that certain lease between Wilson Menlo Park Campus, LLC, a Wisconsin limited liability company, and Facebook, Inc., a Delaware corporation, dated                  , 20     (the “ Lease ”), and (d) all taxes and installments of assessments due and payable for any period prior to Closing (collectively, the “ Obligatory Removal Exceptions” ). If, prior to the Closing, Seller is unable to remove or satisfactorily insure over any of the Obligatory Removal Exceptions, then, in addition to any and all other rights and remedies which Buyer may have hereunder or at law or in equity, Buyer may (a) terminate this Agreement by delivering written notice to Seller and Escrow Agent (in which case Escrow Agent shall return the Deposit to Buyer, and the parties shall equally share the Cancellation Charges), and Seller shall reimburse Buyer for all of Buyer’s reasonable, third-party, out-of-pocket costs and expenses incurred in connection with the transaction contemplated by this Agreement, and thereafter neither party shall have any rights or obligations to the other

 

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  hereunder, other than pursuant to any provision hereof which expressly survives the termination of this Agreement; (b) pursue an action for specific performance to compel Seller to remove the Obligatory Removal Exceptions; or (c) proceed to a timely Closing and thereafter maintain an action for damages against Seller.

 

3.6 Condition of Title at Closing . Upon the Closing, Seller shall sell, transfer and convey to Buyer fee simple title to the Land and the Improvements thereon by a duly executed and acknowledged deed in the form of Exhibit B attached hereto (the “ Deed ”), subject only to the Permitted Exceptions.

 

3.7 BCDC Permit . Buyer acknowledges that the Property is subject to certain rights and obligations, including, without limitation, certain public access and public parking requirements, set forth in that certain Bay Conservation and Development Commission Permit No. 26-78 (issued December 1, 1978, and thereafter amended) (the “ BCDC Permit ”), in part recorded as Instrument No. 91029676 in the Official Records of San Mateo County, California. Prior to Closing, Seller and Buyer shall cooperate and undertake diligent efforts in order to satisfy the requirements of the BCDC Permit with respect to, and obtain any necessary consent to, the assignment of the BCDC Permit to Buyer at Closing (collectively, the “ BCDC Consent ”). In addition to the conditions of Closing specified in Section 7.1.3 below, it shall be a Buyer’s Condition that all necessary consents and approvals required for the assignment of the BCDC Permit to Buyer have been obtained prior to the Closing; provided, however, that if such condition has not been satisfied and Buyer elects to waive such condition and proceed with Closing, (i) Buyer shall endeavor to obtain any such necessary consents and approvals as soon as reasonably practicable after Closing, and (ii) provided that Seller has cooperated with Buyer and undertaken diligent efforts to obtain the BCDC consent, Buyer shall indemnify, defend (with counsel reasonably approved by Seller) and hold harmless Seller from and against all claims, demands, losses, liabilities, penalties, fines, lawsuits or other proceedings, and costs and expenses (including reasonable attorneys’ fees and court costs) suffered or incurred by Seller as a consequence of the failure of the parties to obtain any such necessary consents and approvals prior to Closing. The provisions of this Section 3.7 shall survive the Closing.

 

4. SELLER’S REPRESENTATIONS AND WARRANTIES.

Seller represents and warrants to and agrees with Buyer that, as of the date hereof and as of the Closing Date:

 

4. 1 Authority . This Agreement and all other documents described in Section 9.1 below delivered prior to or at the Closing (i) have been duly authorized, executed, and delivered by Seller; (ii) are binding obligations of Seller; and (iii) do not violate the formation documents of Seller. Except with respect to the BCDC Permit, Seller has obtained all required consents, releases, and approvals necessary to execute this Agreement and consummate the transaction contemplated by this Agreement. Seller further represents that it is a             , duly organized and existing in good standing under the laws of the State of                     , with its principal place of business in                     .

 

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4.2 No Conflicts . The execution and delivery of this Agreement, the consummation of the transactions herein contemplated, and compliance with the terms of this Agreement will not conflict with, or, with or without notice or the passage of time or both, result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, deed of trust, mortgage, loan agreement, or other document, or instrument or agreement, oral or written, to which Seller is a party or by which Seller or to the best of Seller’s knowledge the Property is bound, or any applicable regulation of any governmental agency, or any judgment, order or decree to which Seller is a party or to which Seller, or to the best of Seller’s knowledge, the Property is subject.

 

4.3 Preferential Rights . Seller has not granted any options or rights of first refusal or rights of first offer to third parties to purchase or otherwise acquire an interest in the Property, except as provided for in the Lease.

 

4.4 Special Assessments or Condemnation . Except those shown as exceptions on the PTR or Schedule 4.4 attached hereto, Seller has received no written notice of any existing, proposed or contemplated (i) special assessments, (ii) condemnation actions against the Property or any part, or (iii) eminent domain proceedings, in each case, that would affect the Property.

 

4.5 Service Contracts . Seller has not entered into any service, maintenance, repair, management, leasing, or supply contracts or other contracts (including, without limitation, janitorial, elevator and landscaping agreements) affecting the Property, oral or written, except as set forth on the schedule attached hereto as Exhibit C (the “ Service Contracts ”)

 

4.6 Bankruptcy . Seller has not (i) made a general assignment for the benefit of creditors, (ii) filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Seller’s creditors, (iii) suffered the appointment of a receiver to take possession of all, or substantially all, of Seller’s assets, (iv) suffered the attachment or other judicial seizure of all, or substantially all, of Seller’s assets, (v) admitted in writing its inability to pay its debts as they come due, or (vi) made an offer of settlement, extension or composition to its creditors generally.

 

4.7 Litigation . Except as set forth on the schedule attached hereto as Exhibit F , there are no actions, suits or proceedings before any judicial or quasi-judicial body that are pending and have been served upon Seller, or to Seller’s knowledge have been threatened in writing with respect to the Property.

 

4.8 OFAC . Seller, and to Seller’s knowledge, all direct beneficial owners of Seller, are currently (a) in compliance with and shall at all times during the term of this Agreement remain in compliance with the regulations of the Office of Foreign Assets Control (“ OFAC ”) of the U.S. Department of Treasury and any statute, executive order, or regulation relating thereto (collectively, the “ OFAC Rules ”), (b) not listed on, and shall not during the term of this Agreement be listed on, the Specially Designated Nationals and Blocked Persons List maintained by OFAC and/or on any other similar list maintained by OFAC or other governmental authority pursuant to any authorizing statute, executive order, or regulation, and (c) not a person or entity with whom a U.S. person is prohibited from conducting business under the OFAC Rules.

 

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4.9 Survival . Subject to Exception Matters, all of the representations, warranties and agreements of Seller set forth in this Agreement shall be true upon the execution of this Agreement, shall be deemed to be repeated at and as of the Closing Date without the necessity of a separate certificate with respect thereto and shall survive the delivery of the Deed and other Closing instruments and documents for a period of twelve (12) months after Closing. Any claim which Buyer may have against Seller for a breach of any such representation, warranty or agreement, whether such breach is known or unknown, which is not specifically asserted by written notice to Seller within such twelve (12) month period shall not be valid or effective, and Seller shall have no liability with respect thereto.

 

4.10 Seller’s Knowledge . For purposes of this Agreement and any document delivered at Closing, whenever the phrase “ to the best of Seller’s knowledge ” or the “ knowledge ” of Seller or words of similar import are used, they shall be deemed to mean and are limited to the actual knowledge only of                                          and                                          (the “ Designated Persons ”), at the times indicated only, and not the knowledge of any other persons in Seller or any of Seller’s affiliates’ organizations, or Seller’s investment advisor or the partners, trustees, beneficiaries, shareholders, members, managers, directors, officers, employees, agents or representatives of Seller other than the Designated Persons. Seller represents and warrants that the Designated Persons are the individuals within Seller’s organization who are primarily in charge of asset management with respect to the Property. Furthermore, it is understood and agreed that the Designated Persons shall have no personal liability in any manner whatsoever hereunder or otherwise related to the transactions contemplated hereby.

 

4.11

No Liability for Exception Matters . As used herein, the term “ Exception Matter ” shall refer to a matter which would make a representation or warranty of Seller contained in this Agreement untrue or incorrect and which is actually known to Buyer before the Closing, including, without limitation, matters disclosed in any tenant estoppel certificate or from interviews with tenants, property managers or any other person, provided that such matter was not actually known by Seller to be untrue or incorrect on the Execution Date. If Buyer first obtains actual knowledge of any Exception Matter, Buyer’s sole remedy shall be to terminate this Agreement on the basis thereof, upon written notice to Seller within five (5) business days following Buyer obtaining actual knowledge of such Exception Matter, in which event the Deposit shall be returned to Buyer, unless within five (5) business days after receipt of such notice, Seller notifies Buyer in writing that it elects to attempt to cure or remedy such Exception Matter, in which event there shall be no return of the Deposit unless and until Seller is unable to so cure or remedy within the fifteen (15) business day period set forth below. The Closing shall be extended to the extent necessary to permit the parties to make the elections set forth in the previous sentence. Seller shall be entitled to extend the Closing Date for up to fifteen (15) business days in order to attempt to cure or remedy any Exception Matter. Buyer’s failure to give notice within five (5) business days after it has obtained actual knowledge

 

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  of an Exception Matter shall be deemed a waiver by Buyer of such Exception Matter. Seller shall have no obligation to cure or remedy any Exception Matter, even if Seller has notified Buyer of Seller’s election to attempt to cure or remedy any Exception Matter (except as specifically provided in Sections 3.3 and 3.4 ), and, subject to Buyer’s right to terminate this Agreement as set forth above, Seller shall have no liability whatsoever to Buyer with respect to any Exception Matters. Upon any termination of this Agreement, neither party shall have any further rights nor obligations hereunder, except as specifically provided herein. If Buyer obtains actual knowledge of any Exception Matter before the Closing, but nonetheless elects to proceed with the acquisition of the Property or is obligated to proceed with the acquisition of the Property, Seller shall have no liability with respect to such Exception Matter, notwithstanding any contrary provision, covenant, representation or warranty contained in this Agreement or in any documents delivered by Seller at Closing pursuant to Section 9.1 .

 

4.12

As-Is . Except as expressly set forth in this Agreement, including, without limitation elsewhere in this Article 4 , Seller (i) makes no representations or warranties concerning the Property, income derived therefrom or any matters pertaining thereto; and (ii) makes no representations or warranties with respect to the physical condition or any other aspect of the Property, including, without limitation: (A) the structural integrity of, or the quality of any labor and materials used in the construction of, any improvements on the Land; (B) the conformity of the Improvements to any plans or specifications for the Property; (C) the compliance of the Property or its operation with any applicable codes, laws, regulations, statutes, ordinances, covenants, conditions and restrictions of any governmental or quasi-governmental entity or of any other person or entity, including zoning or building code requirements; (D) the existence of soil instability, past soil repairs, soil additions or conditions of soil fill or susceptibility to landslides; (E) the sufficiency of any undershoring; (F) the sufficiency of any drainage; (G) whether the Land is located wholly or partially in any flood plain or flood hazard boundary or similar area; (H) the existence or non-existence of underground storage tanks; (I) any other matter affecting the stability or integrity of the Land or any buildings or improvements situated on or as part of the Improvements; (J) the availability, quality, nature, adequacy and physical condition of public utilities and services for the Property; (K) the habitability, merchantability, fitness, suitability, functionality, value or adequacy of the Property or any component or system thereof for any intended use; (L) the potential for further development of the Property; (M) the existence of vested land use, zoning or building entitlements affecting the Premises; (N) the quality, nature, adequacy and physical condition of the Property, including the structural elements, foundations, roofs, appurtenances, access, landscaping, parking facilities and the electrical, mechanical, HVAC, plumbing, sewage, and utility systems, facilities and appliances; (O) the quality and nature of any groundwater; (P) the zoning or other legal status of the Property or any other public or private restrictions on use of the Property; (Q) the presence of any hazardous materials or mold or any mold-like substance on, in, under or about the Property or any nearby property; (R) the condition of title to the Property; (S) any agreements affecting the Property; and (T) the economics of the operation of the Property. Buyer expressly acknowledges that the Property is being sold and accepted “AS IS, WHERE IS” and are being accepted without any representation or warranty by Seller or any agent, officer, employee or representative of Seller except as expressly set

 

9


  forth herein. Buyer agrees that it will make such investigations of the condition of the Property as Buyer deems adequate and will be relying solely upon its own investigation of such condition and not upon any statement of Seller.

Buyer waives right to recover from Seller, the affiliates of Seller, and the shareholders, directors, officers, employees and agents of each of the foregoing parties (collectively, the “ Seller-Related Parties ”), and forever releases, covenants not to sue and discharges the Seller-Related Parties from, any and all damages, demands, claims, losses, liabilities, penalties, fines, liens, judgments, costs or expenses whatsoever, including attorneys’ fees and costs, whether direct or indirect, known or unknown, foreseen or unforeseen, that may arise on account of this Agreement or in any way be connected with the Property, including, but not limited to, the presence of any hazardous materials on, in, under or about the Property.

The release set forth in the immediately preceding paragraph includes claims, liabilities and other matters of which Buyer is presently unaware or of which Buyer does not presently suspect to exist which, if known by Buyer, would materially affect Buyer’s willingness to enter into the release set forth in the immediately preceding paragraph. In this connection and to the fullest extent permitted by law, Buyer hereby agrees, represents and warrants that Buyer realizes and acknowledges that factual matters now unknown to it may have given or may hereafter give rise to causes of action, claims, demands, debts, controversies, damages, costs, loses and expenses which are presently unknown, unanticipated and unsuspected, and Buyer further agrees, represents and warrants that the release set forth in the immediately preceding paragraph has been negotiated and agreed upon in light of that realization and that Buyer nevertheless hereby intends to release, discharge and acquit the Seller-Related Parties from any such unknown causes of action, claims, demands, debts, controversies, damages, costs, losses and expenses. In connection with the release set forth in the immediately preceding paragraph, Buyer expressly waives the benefits of Section 1542 of the California Civil Code which provides as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

Nothing set forth hereinabove is intended to or shall alter or diminish in any way the rights and obligations of the parties under the Lease for the period prior to Closing.

NOTWITHSTANDING THE FOREGOING, THE RELEASE SET FORTH IN THIS SECTION 4.10 SHALL NOT APPLY (I) TO THE EXTENT OF ANY FRAUD PERPETRATED BY SELLER OR THE SELLER-RELATED PARTIES OR ANY INTENTIONAL OR NEGLIGENT MISREPRESENTATION MADE BY SELLER OR THE SELLER-RELATED PARTIES, PROVIDED THAT THIS PROVISION SHALL NOT EXTEND THE PERIOD WITH RESPECT TO WHICH REPRESENTATIONS AND WARRANTIES SURVIVE UNDER THIS AGREEMENT AS SET FORTH IN SECTION 4.9 ABOVE, (II) ANY OBLIGATION OF SELLER WHICH EXPRESSLY SURVIVES THE CLOSING, OR (III) TO ANY CLAIMS ARISING FROM OR RELATED TO SELLER’S OBLIGATIONS UNDER THE DOCUMENTS DELIVERED TO BUYER AT CLOSING.

The provisions of this Section 4.10 shall survive the Closing.

 

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5. BUYER’S REPRESENTATIONS AND WARRANTIES.

Buyer represents and warrants to and agrees with Seller that, as of the date hereof, and as of the Closing Date:

 

5.1 Authority . This Agreement and all other documents described in Section 9.2 below delivered prior to or at the Closing (i) have been duly authorized, executed, and delivered by Buyer; (ii) are binding obligations of Buyer; and (iii) do not violate the formation documents of Buyer. Except with respect to the BCDC Permit, Buyer has obtained all required consents, releases, and approvals necessary to execute this Agreement and consummate the transaction contemplated by this Agreement. Buyer further represents that it is a             , duly organized and existing in good standing under the laws of the State of                     , with its principal place of business in                     .

 

5.2 No Conflicts . The execution and delivery of this Agreement, the consummation of the transactions herein contemplated, and compliance with the terms of this Agreement will not conflict with, or, with or without notice or the passage of time or both, result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, deed of trust, mortgage, loan agreement, or other document, or instrument or agreement, oral or written, to which Buyer is a party or by which Buyer is bound, or any applicable regulation of any governmental agency, or any judgment, order or decree to which Buyer is a party or to which Buyer is subject.

 

6. COVENANTS OF SELLER.

In addition to the covenants and agreements of Seller set forth elsewhere in this Agreement, Seller covenants and agrees that between the date hereof and the Closing Date:

 

6.1 Title . Seller shall not take any action or cause the creation of any lien, charge or encumbrance other than the Permitted Exceptions, or enter into any agreement to do any of the foregoing without Buyer’s prior written consent (which consent may be withheld in Buyer’s sole and absolute discretion).

 

6.2 Buyer’s Approval of New Leases and Agreements Affecting the Property . Seller shall not enter into any new lease or other agreement affecting the Property, or modify or terminate any existing lease or other agreement affecting the Property, which will be binding on the Property after Closing, except for agreements which are terminable at Closing without payment of any penalty or fee or other cost to Seller, without first obtaining Buyer’s consent to such action (which consent may be withheld in Buyer’s sole and absolute discretion). Seller shall promptly notify Buyer of any such new, extended, renewed or replaced lease or other agreement entered into by Seller that affects the Property and will be binding on the Property after Closing.

 

6.3 Notice of Change in Circumstances . Seller shall promptly notify Buyer of any event or circumstance of which Seller obtains actual knowledge subsequent to the date of this Agreement which materially, adversely affects the Property or any portion thereof or the use or operation of the Property or any portion thereof and which will be binding on the Property after Closing or which makes any representation or warranty of Seller to Buyer under this Agreement untrue or misleading in any material respect.

 

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6.4 Exclusive Negotiations . Seller shall (i) remove the Property from the market, and (ii) cease and refrain from any and all negotiations with any other prospective optionees or purchasers of the Property.

 

6.5 Development Activities . Seller shall not take any actions with respect to the development of the Property, including, without limitation, applying for, pursuing, accepting or obtaining any permits, approvals or other development entitlements from any governmental or other regulatory entities or finalizing or entering into any agreements relating thereto without Buyer’s prior written consent (which consent may be withheld in Buyer’s sole and absolute discretion).

 

6.6 No Default . Seller shall not default with respect to the performance of any of Seller’s obligations as landlord under the Lease or under any agreements relating to the Property to which Seller is a party and which will be binding on the Property after Closing, including, without limitation, the payment of all amounts due and the performance of all obligations with respect to the Service Contracts to which Seller is a party.

 

6.7 Insurance and Maintenance of Improvements . Seller agrees to maintain the insurance required to be carried by Seller under the Lease.

 

6.8 Litigation . Seller shall not allow to be commenced on its behalf any action, suit or proceeding with respect to all or any portion of the Property without Buyer’s prior written consent (which consent may be withheld in Buyer’s sole and absolute discretion); provided that, Seller may commence (or pursue) any action, suit or proceeding with respect to any breach of the Lease by the tenant under the Lease without Buyer’s prior written consent. In the event Seller receives any notice of any proceeding of the character described in Sections 4.6 or 4.7 which has not been previously disclosed to Buyer prior to the Closing, Seller shall promptly advise Buyer in writing.

Subject to Section 4.9 above, any claims of Buyer for Seller’s failure to perform Seller’s covenants set forth in this Section 6 shall survive the Closing.

 

7. CONDITIONS PRECEDENT TO CLOSING.

 

7.1 Buyer’s Conditions . The obligation of Buyer to render performance under this Agreement is subject to the following conditions precedent (and conditions concurrent, with respect to deliveries to be made by the parties at Closing) (“ Buyer’s Conditions ”), which conditions may be waived, or the time for satisfaction thereof extended, by Buyer only in a writing executed by Buyer; provided , however , that any such waiver shall not affect Buyer’s ability to pursue any remedy Buyer may have with respect to any breach of any covenant or obligation required to be performed on the part of the Seller hereunder:

 

  7.1.1

Title . Title Company shall be prepared and irrevocably committed to issue (a) to Buyer an American Land Title Association extended coverage owner’s policy of

 

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  title insurance in favor of Buyer in an amount equal to the Purchase Price showing indefeasible fee simple title to the Property vested in Buyer, with those additional endorsements and reinsurance reasonably requested by Buyer and agreed to by the Title Company (without any requirement by the Title Company that the Seller provide any affidavit or indemnity in support thereof except for (a) an owner’s affidavit in commercial reasonably form to support the issuance of an extended coverage owner’s policy, which affidavit shall specifically exclude any matters relating to works of improvement affecting the Property that have been authorized by the tenant under the Lease or any subtenant with respect thereto, and (b) a commercially reasonable gap indemnity), subject only to (i) those documents recorded against the Real Property as of the Commencement Date (as defined in the Lease), (ii) those documents recorded against the Real Property after the Commencement Date (as defined in the Lease) and consented to by Tenant (as defined in the Lease) in accordance with the terms and conditions set forth in the Lease, and (iii) any additional Permitted Exceptions, and in all events, with all Obligatory Removal Exceptions removed (collectively, the “ Owner’s Title Policy ”).

 

  7.1.2 Seller’s Due Performance . Subject to Exceptions Matters, all of the representations and warranties of Seller set forth in Section 4 shall be true and correct in all material respects as of the Closing Date, and Seller, on or prior to the Closing Date, shall have complied with in all material respects and/or performed in all material respects all of the obligations, covenants and agreements required on the part of Seller to be complied with or performed pursuant to the terms of this Agreement, including, without limitation, the deliveries required to be made by Seller pursuant to Sections 9.1 and 9.3 hereof.

 

  7.1.3 Bankruptcy . No action or proceeding shall have been commenced by or against Seller under the federal bankruptcy code or any state law for the relief of debtors or for the enforcement of the rights of creditors that has not been dismissed and no attachment, execution, lien or levy shall have attached to or been issued with respect to the Property or any portion thereof.

 

  7.1.4 No Moratoria . No moratorium, statute, regulation, ordinance, or federal, state, county or local legislation, or order, judgment, ruling or decree of any governmental agency or of any court shall have been enacted, adopted, issued, entered or pending which would adversely affect Buyer’s intended use of the Property.

 

  7.1.5 Condition of Property . Subject to the provisions of Section 12 below, the condition of the Property shall be substantially the same on the Closing Date as on the Execution Date, except for reasonable wear and tear and any damages due to any act of Buyer or Buyer’s representatives or any Affiliate of Buyer or their representatives.

 

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7.2 Failure of Buyer’s Conditions . Subject and without limitation to Buyer’s rights hereunder, including, without limitation, Section 13.2 hereof, if any of Buyer’s Conditions have not been fulfilled within the applicable time periods, Buyer may:

 

  7.2.1 Waive and Close . Waive the Buyer’s Condition and close Escrow in accordance with this Agreement, with or without adjustment or abatement of the Purchase Price, and if the Buyer’s Condition not satisfied is either of the conditions set forth in Sections 7.1.2 or 7.1.3 above, then, subject to Section 4.9 above, all of Buyer’s claims and causes of action against Seller for such failure shall survive Closing and after Closing Buyer may pursue all rights and remedies available at law or in equity as a result thereof; or

 

  7.2.2 Terminate . Terminate this Agreement by delivering written notice to Seller and to Escrow Agent, in which event Escrow Agent shall return the Deposit to Buyer, Seller shall pay the Cancellation Charges, and if the Buyer’s Condition not satisfied is either of the conditions set forth in Sections 7.1.2 or 7.1.3 above, then Buyer shall be entitled to pursue any other rights and remedies which it may have against Seller in connection therewith.

 

7.3 Seller’s Conditions . The obligation of Seller to render performance under this Agreement is subject to the following conditions precedent (and conditions concurrent with respect to deliveries to be made by the parties at Closing) (“ Seller’s Conditions ”), which conditions may be waived, or the time for satisfaction thereof extended, by Seller only in a writing executed by Seller:

 

  7.3.1 Buyer’s Due Performance . All of the representations and warranties of Buyer set forth in Section 5 hereof shall be true and correct in all material respects as of the Closing Date, and Buyer, on or prior to the Closing Date, shall have complied in all material respects with and/or performed in all material respects all of the obligations, covenants and agreements required on the part of Buyer to be complied with or performed pursuant to the terms of this Agreement.

 

7.4 Failure of Seller’s Conditions . Subject to Seller’s rights hereunder in the event of a default by Buyer which results in the failure of a Seller’s Condition, in the event of the failure of a Seller’s Condition, Seller may terminate this Agreement by delivery of written notice to Buyer and Escrow Agent, in which event Escrow Agent disburse the Deposit to Seller, Buyer shall pay the Cancellation Charges, and neither party shall thereafter have any rights or obligations to the other hereunder.

 

8. CLOSING.

 

8.1 Closing Date . Subject to the provisions of this Agreement, the Closing shall take place on [                                        ] [DRAFTING NOTE: TO BE FILLED-IN WITH DATE SET FORTH IN TENANT’S EXERCISE NOTICE], or on such other date as the parties hereto may agree. As used herein, the “ Closing ” shall mean the recordation of the Deed in the Official Records of the County of San Mateo, State of California (the “ Official Records ”), and the “ Closing Date ” shall mean the date upon which the Closing actually occurs.

 

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8.2 Closing Costs . Each party shall pay its own costs and expenses arising in connection with the Closing (including, without limitation, its own attorneys’ and advisors’ fees), except the following costs (the “ Closing Costs ”), which shall be allocated between the parties as follows (or in accordance with custom for any closing costs not described below):

 

  8.2.1 Seller’s Closing Costs . Seller shall pay documentary transfer, stamp, sales and other taxes related to the transfer of the Property and Escrow Agent’s escrow fees and costs.

 

  8.2.2 Buyer’s Closing Costs . Buyer shall pay all recording fees related to Buyer’s acquisition of the Property, and all premiums, costs and fees related to the delivery of the Owner’s Title Policy, the cost of the Survey.

 

9. CLOSING DELIVERIES.

 

9.1 Deliveries by Seller to Escrow . Not less than 1 Business Day prior to the Closing Date, Seller, at its sole cost and expense, shall deliver or cause to be delivered into Escrow the following documents and instruments, each effective as of the Closing Date and executed by Seller, in addition to the other items and payments required by this Agreement to be delivered by Seller:

 

  9.1.1 Deed . The original executed and acknowledged Deed conveying the Property to Buyer or its nominee;

 

  9.1.2 Non-foreign Affidavit . 2 originals of an affidavit that Seller is exempt from withholding under Section 1445 of the Internal Revenue Code or any like or successor statute, each executed by Seller;

 

  9.1.3 California FTB Form 593-C . 2 originals of a California FTB Form 593-C (or its equivalent), each executed by Seller;

 

  9.1.4 Bill of Sale and Assignment . 2 original counterparts of the Bill of Sale and Assignment in the form of Exhibit E attached hereto, each executed by Seller, pursuant to which Seller shall transfer to Buyer all the Personal Property and the Intangible Property, in each case free of all liens and encumbrances created by Buyer or its Affiliates;

 

  9.1.5 Proof of Authority . Such proof of Seller’s authority and authorization to enter into this Agreement and the transaction contemplated hereby, and such proof of the power and authority of the individual(s) executing or delivering any instruments, documents or certificates on behalf of Seller to act for and bind Seller as may be reasonably required by Title Company; and

 

15


  9.1.6 Assignment of Lease . 2 original counterparts of an assignment and assumption of the Lease (if, pursuant to Section 16.4 below, Buyer elects not to terminate the Lease) in a form reasonably agreed to by Buyer and Seller (the “ Assignment of Lease ”) executed by Seller.

 

  9.1.7 Other . Such other documents and instruments, signed and properly acknowledged by Seller, if appropriate, as may be reasonably required by Escrow Agent in order to effectuate the provisions of this Agreement and the Closing of the transactions contemplated herein, provided that any title affidavit shall be in a commercially reasonable form that does not require Seller to make any representations as to any matters arising out of any works of improvement affecting the Property at any time that have been authorized by the tenant under the Lease or any subtenant with respect thereto, and Seller shall not be required to provide any indemnity to Title Company except a gap indemnity in commercially reasonable form.

 

9.2 Deliveries by Buyer . On or before the Closing, Buyer, at its sole cost and expense, shall deliver or cause to be delivered into Escrow the following:

 

  9.2.1 Balance, Prorations & Closing Costs . The balance of the Purchase Price pursuant to Section 2 hereof and Buyer’s share of Closing Costs (as hereinafter defined), as provided in Section 8.2 ;

 

  9.2.2 Assignment of Lease . 2 original counterparts of the Assignment of Lease (if, pursuant to Section 16.4 below, Buyer elects not to terminate the Lease) executed by Buyer.

 

  9.2.3 Other . Keys, combinations or card keys to all locks and security systems, and such other documents and instruments in commercially reasonable form in order to effectuate the provisions of this Agreement and the Closing of the transactions contemplated herein.

 

9.3 Deliveries Outside of Escrow . Seller shall deliver possession of the Property to Buyer upon the Closing. Further, Seller hereby covenants and agrees, at its sole cost and expense, to deliver or cause to be delivered to deliver to Buyer, on or prior to the Closing, the following items to the extent in Seller’s possession:

 

  9.3.1 Service Contracts . An original, fully executed counterpart of each of the Service Contracts being assumed by Buyer, and any amendments, modifications, supplements and restatements thereto;

 

  9.3.2 Intangible Property . The original of each document evidencing the Intangible Property or rights to ownership and use thereof including the Approvals;

 

  9.3.3 Personal Property . The Personal Property, including, without limitation, all keys, pass cards, remote controls, security codes, computer software and other devices relating to access to the Improvements; and

 

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  9.3.4 Other . Keys, combinations or card keys to all locks and security systems, and such other documents and instruments, in commercially reasonable form, in order to effectuate the provisions of this Agreement and the Closing of the transactions contemplated herein.

 

10. PRORATIONS.

 

10.1 Prorations. There shall be no prorations of income, taxes or other operating expenses affecting the Property at Closing, however, (i) rent and other amounts paid or payable by Tenant under the Lease shall be prorated as of the Closing (such that Tenant receives at Closing a prorated refund of rent and other amounts paid by Tenant under the Lease for the month of Closing for the portion of such month occurring after Closing), (ii) the parties obligations to reconcile Taxes, Insurance, Impositions (as those terms are defined in the Lease) and other operating expenses for the Property for the period prior to Closing, as required by the Lease, shall survive Closing and (if applicable) any termination of the Lease, (iii) Tenant’s rights to appeal Taxes (as defined in the Lease) for any period prior to Closing, as set forth in the Lease, shall survive the Closing and (if applicable) any termination of the Lease, and (iv) (iv) Buyer shall pay to Seller at Closing the portion of the cost of any “Capital Items” for which Tenant was reimbursed by Seller, as landlord under the Lease, pursuant to Section 7.2(iii) thereof.

 

10.2 Preliminary Closing Statement . 10 days prior to the Closing, Escrow Agent shall deliver to each of the parties for their review and approval a preliminary closing statement (the “ Preliminary Closing Statement ”) setting forth the Closing Costs allocable to each of the parties pursuant to Section 8.2 hereof. Based on each of the party’s comments, if any, regarding the Preliminary Closing Statement, Escrow Agent shall revise the Preliminary Closing Statement and deliver a final, signed version of a closing statement to each of the parties at the Closing (the “ Closing Statement ”).

 

11. ESCROW.

 

11.1 Opening of Escrow . Promptly following the Execution Date, Buyer and Seller shall each cause a purchase and sale escrow (“ Escrow ”) to be opened with Escrow Agent by delivery to Escrow Agent of 3 duplicate partially executed originals of this Agreement executed by Seller and Buyer. Upon receipt of such partially executed originals of this Agreement, Escrow Agent shall form 3 duplicate original counterparts of this Agreement and telephonically confirm to Buyer and Seller the date upon which Escrow is opened (the “ Opening of Escrow ”). On or immediately after the Opening of Escrow, Escrow Agent shall (a) confirm the same by executing and dating the 3 duplicate original counterparts of this Agreement in the space provided for Escrow Agent, and (b) deliver a fully executed original of this Agreement to each of Seller and Buyer.

 

11.2

Escrow Instructions . This Agreement shall constitute escrow instructions to Escrow Agent as well as the agreement of the parties. Escrow Agent is hereby appointed and designated to act as Escrow Agent and instructed to deliver, pursuant to the terms of this Agreement, the documents and funds to be deposited into Escrow as herein provided. The parties hereto shall execute such additional escrow instructions, not inconsistent with

 

17


  this Agreement as determined by counsel for Buyer and Seller, as Escrow Agent shall deem reasonably necessary for its protection, if any (as may be modified by and mutually acceptable to Buyer, Seller and Escrow Agent). In the event of any inconsistency between this Agreement and such additional escrow instructions, the provisions of this Agreement shall govern.

 

11.3 Actions by Escrow Agent . Provided that Escrow Agent shall not have received written notice from Buyer or Seller of the failure of any condition to the Closing or of the termination of the Escrow and this Agreement, when Buyer and Seller have deposited into Escrow the documents and funds required by this Agreement, and Title Company is unconditionally and irrevocably committed to issue the Owner’s Title Policy concurrently with the Closing, Escrow Agent shall, in the order and manner herein below indicated, take the following actions:

 

  11.3.1 Recording . Following Title Company’s acknowledgment that it is prepared and irrevocably committed to issue the Owner’s Title Policy to Buyer, cause the Deed and any other documents which the parties hereto may mutually direct to be recorded in the Official Records and obtain conformed copies thereof for distribution to Buyer and Seller.

 

  11.3.2 Funds . Upon receipt of confirmation of the recordation of the Deed and such other documents as were recorded pursuant to Section 11.3.1 above, disburse all funds deposited with it by Buyer as follows:

(a) Pursuant to the Closing Statement (as hereinafter defined), retain for Escrow Agent’s own account all escrow fees and costs, disburse to Title Company the fees and expenses incurred in connection with the issuance of the Owner’s Title Policy, and disburse to any other persons or entities entitled thereto the amount of any other Closing Costs;

(b) Disburse to Seller an amount equal to the Purchase Price, less or plus the net debit or credit to Seller by reason of allocation of Closing Costs provided for in Sections 10 and 8.2 . Seller’s portion (as provided in Section 8.2 ) of the escrow fees, title fees and other Closing Costs shall be paid pursuant to clause (a)  above; and

(c) Disburse to Buyer any remaining funds in the possession of Escrow Agent after payments pursuant to clauses (a)  and (b)  above have been completed.

 

  11.3.3 Owner’s Title Policy . Cause Title Company to issue the Owner’s Title Policy to Buyer.

 

  11.3.4 Delivery of Documents . Deliver to Buyer and Seller one original of each of all documents deposited into Escrow, other than the Deed and any other recorded documents.

 

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11.4 Conflicting Demands . Upon receipt of a written demand for the Deposit (a “ Deposit Demand” ) by Seller or Buyer (the “ demanding party” ), Escrow Agent shall promptly send a copy of such Deposit Demand to the other party (the “ non-demanding party” ). Escrow Agent shall hold the Deposit for 5 Business Days from the date of delivery by Escrow Agent of the Deposit Demand to the non-demanding party (“ Objection Period” ) or until Escrow Agent receives a confirming instruction from the non-demanding party. In the event the non-demanding party delivers to Escrow Agent written objection to the release of the Deposit to the demanding party (an “ Objection Notice” ) within the Objection Period (which Objection Notice shall set forth the basis under this Agreement for objecting to the release of the Deposit), Escrow Agent shall promptly send a copy of the Objection Notice to the demanding party. In the event of any dispute between the parties regarding the release of the Deposit, Escrow Agent, in its good faith business judgment, may disregard all inconsistent instructions received from either party and may either (a) hold the Deposit until the dispute is mutually resolved and Escrow Agent is advised of such mutual resolution in writing by both Seller and Buyer, or Escrow Agent is otherwise instructed by a final non-appealable judgment of a court of competent jurisdiction, or (b) deposit the Deposit with a court of competent jurisdiction by an action of interpleader (whereupon Escrow Agent shall be released and relieved of any further liability or obligations hereunder from and after the date of such deposit). In the event Escrow Agent shall in good faith be uncertain as to its duties or obligations hereunder or shall receive conflicting instructions, claims or demands from the parties hereto, Escrow Agent shall promptly notify both parties in writing and thereafter Escrow Agent shall be entitled (but not obligated) to refrain from taking any action other than to keep safely the Deposit until Escrow Agent shall receive a joint instruction from both parties clarifying Escrow Agent’s uncertainty or resolving such conflicting instructions, claims or demands, or until a final non-appealable judgment of a court of competent jurisdiction instructs Escrow Agent to act.

 

11.5 Real Estate Reporting Person . Escrow Agent is designated the “real estate reporting person” for purposes of section 6045 of title 26 of the United States Code and Treasury Regulation 1.6045-4 and any instructions or settlement statement prepared by Escrow Agent shall so provide. Upon the consummation of the transaction contemplated by this Agreement, Escrow Agent shall file Form 1099 information return and send the statement to Seller as required under the aforementioned statute and regulation.

 

11.6 Destruction of Documents; Survival . Escrow Agent is hereby authorized to destroy or otherwise dispose of any and all documents, papers, instructions and other material concerning the Escrow at the expiration of 6 years from the later of (a) the Closing, (b) the final disbursement of any funds maintained in Escrow after the Closing, or (c) the final release of the Deposit following the termination of this Agreement. The provisions of this Section 11 shall survive the Closing or earlier termination of this Agreement until Escrow Agent’s duties and obligations hereunder are fully and finally discharged.

 

12. RISK OF LOSS.

 

12.1

Condemnation . If, prior to the Closing Date, all or any material portion of the Property is taken by condemnation or eminent domain (or is the subject of a pending or

 

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  contemplated taking which has not been consummated), Seller shall immediately notify Buyer of such fact. In such event, Buyer shall have the option to terminate this Agreement by delivering written notice to Seller not later than 30 days after delivery of such notice from Seller. Upon such termination, Escrow Agent shall immediately return the Deposit to Buyer, the parties shall equally share the Cancellation Charges, and neither party shall have any further rights or obligations hereunder, other than pursuant to any provision hereof which expressly survives the termination of this Agreement. If Buyer does not elect to terminate this Agreement, Seller shall not compromise, settle or adjust any award without Buyer’s prior written consent (which consent may be withheld in Buyer’s sole and absolute discretion). At the Closing, Seller shall assign and turn over to Buyer, and Buyer shall be entitled to receive and keep all awards for such taking or pending or contemplated taking.

 

12.2 Casualty . Prior to the Closing and notwithstanding the pendency of this Agreement, the entire risk of loss or damage or destruction of the Property shall be borne and assumed by Seller (subject to the terms of the Lease). If prior to Closing any part of the Property is damaged or destroyed, Buyer shall have the option to terminate this Agreement by delivering written notice to Seller not later than thirty (30) days after the occurrence of such damage or destruction. If Buyer does not so elect terminate this Agreement, Seller shall assign and turn over, and Buyer shall be entitled to receive and keep, all insurance proceeds payable with respect to such damage or destruction (which shall then be repaired or not at Buyer’s sole option and cost), the parties shall proceed to Closing pursuant to the terms hereof without modification of the terms of this Agreement and without any reduction in the Purchase Price. If Buyer does not elect to terminate this Agreement by reason of any casualty, Buyer shall have the sole right to adjust the insurance claim and Seller shall not compromise, settle or adjust any such claim without Buyer’s prior written consent (which consent may be withheld in Buyer’s sole and absolute discretion).

 

13. DEFAULT.

 

13.1

Default by Buyer . IN THE EVENT THAT THE ESCROW AND THIS TRANSACTION FAIL TO CLOSE AS A RESULT OF THE DEFAULT OF BUYER IN THE PERFORMANCE OF ITS OBLIGATIONS UNDER THIS AGREEMENT, BUYER AND SELLER AGREE THAT SELLER’S ACTUAL DAMAGES WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX AND THAT THE AMOUNT OF THE DEPOSIT REPRESENTS THE PARTIES’ REASONABLE ESTIMATE OF SUCH DAMAGES. THE PARTIES THEREFORE AGREE THAT IN THE EVENT THAT ESCROW AND THIS TRANSACTION FAIL TO CLOSE AS A RESULT OF THE DEFAULT OF BUYER IN THE PERFORMANCE OF ITS OBLIGATIONS HEREUNDER, AND SELLER IS READY, WILLING AND ABLE TO PERFORM ITS OBLIGATIONS HEREUNDER, SELLER, AS SELLER’S SOLE AND EXCLUSIVE REMEDY, IS ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF THE DEPOSIT (EXCLUSIVE OF INTEREST AND DIVIDENDS EARNED THEREON) THEN HELD BY ESCROW AGENT. IN THE EVENT ESCROW FAILS TO CLOSE AS A RESULT OF BUYER’S DEFAULT AND SELLER IS

 

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  READY, WILLING AND ABLE TO PERFORM ITS OBLIGATIONS HEREUNDER, THEN (1) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF BUYER AND SELLER HEREUNDER AND THE ESCROW CREATED HEREBY SHALL TERMINATE, (2) ESCROW AGENT SHALL, AND IS HEREBY AUTHORIZED AND INSTRUCTED TO, RETURN PROMPTLY TO BUYER AND SELLER ALL DOCUMENTS AND INSTRUMENTS TO THE PARTIES WHO DEPOSITED THE SAME, (3) ESCROW AGENT SHALL DELIVER THE DEPOSIT (EXCLUSIVE OF INTEREST AND DIVIDENDS EARNED THEREON) THEN HELD BY ESCROW AGENT TO SELLER PURSUANT TO SELLER’S INSTRUCTIONS, AND THE SAME SHALL BE THE FULL, AGREED AND LIQUIDATED DAMAGES, AND (4) ESCROW AGENT SHALL DELIVER TO BUYER ALL INTEREST AND DIVIDENDS EARNED ON THE DEPOSIT. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. SELLER AND BUYER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTAND THE PROVISIONS OF THIS SECTION 13.1, AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS.

 

 

    

 

Seller’s Initials      Buyer’s Initials

Buyer shall not be deemed in default under this Agreement unless and until Seller shall have provided written notice to Buyer of such default and Buyer shall have failed to cure such default within five (5) Business Days after receipt of such written notice. The Closing shall be extended as necessary to provide Buyer the full five (5) Business Day cure period.

 

13.2 Default by Seller . Subject to Section 4.9 above, in the event of any breach or default by Seller, then Buyer shall be entitled to pursue any remedy available to Buyer hereunder, at law or in equity, including, without limitation, the specific performance of this Agreement.

Seller shall not be deemed in default under this Agreement unless and until Buyer shall have provided written notice to Seller of such default and Seller shall have failed to cure such default within five (5) Business Days after receipt of such written notice. The Closing shall be extended as necessary to provide Seller the full five (5) Business Day cure period.

 

14. BROKERS.

Seller and Buyer each hereby represent, warrant to and covenant to each other that it has not dealt with any third party in a manner which would obligate the other to pay any brokerage

 

21


commission, finder’s fee or other compensation due or payable with respect to the transaction contemplated hereby. Seller hereby indemnifies and agrees to protect, defend and hold Buyer harmless from and against any and all claims, losses, damages, costs and expenses (including attorneys’ fees, charges and disbursements) incurred by Buyer by reason of any breach or inaccuracy of the representation, warranty and agreement of Seller contained in this Section 14 . Buyer hereby indemnifies and agrees to protect, defend and hold Seller harmless from and against any and all claims, losses, damages, costs and expenses (including attorneys’ fees, charges and disbursements) incurred by Seller by reason of any breach or inaccuracy of the representation, warranty and agreement of Buyer contained in this Section 14 . The provisions of this Section 14 shall survive the Closing or earlier termination of this Agreement.

 

15. CONFIDENTIALITY.

 

15.1 Buyer . Buyer agrees that until the Closing, except as otherwise provided herein or required by law and except for the exercise by Buyer of any remedy hereunder, Buyer shall (a) keep confidential the pendency of this transaction and the documents and information supplied by Seller to Buyer, and (b) disclose such information only to Buyer’s agents, employees, contractors, consultants or attorneys, as well as lenders (if any), investment bankers, venture capital groups, investors, and title company personnel, with a need to know in connection with Buyer’s review and consideration of the Property, provided that Buyer shall inform all persons receiving such information from Buyer of the confidentiality requirement and (to the extent within Buyer’s control) cause such confidence to be maintained. Disclosure of information by Buyer shall not be prohibited if that disclosure is of information that is or becomes a matter of public record or public knowledge as a result of the Closing of this transaction or from sources other than Buyer or its agents, employees, contractors, consultants or attorneys.

 

15.2 Seller . Seller agrees that prior to the Closing, except as otherwise provided herein or required by law, and except for the exercise by Seller of any remedy hereunder, Seller shall (a) keep confidential the pendency of this transaction with Buyer, the terms and conditions contained in the Agreement and the identity of Buyer and the relationship between Buyer and the entity to which Buyer may assign this Agreement or which Buyer designates as the party to whom Seller shall convey the Property at the Closing, and (b) disclose such information only to Seller’s agents, auditors, officers, employees, contractors, consultants or attorneys, as well as title company personnel, with a need to know such information in connection with effecting or monitoring this transaction, provided that Seller shall inform all such persons receiving such confidential information from Seller of the confidentiality requirement and (to the extent within Seller’s control) cause such confidence to be maintained. Disclosure of the pendency of this transaction by Seller shall not be prohibited if that disclosure is of information that is or becomes a matter of public record or public knowledge as a result of the Closing of this transaction or from sources other than Seller or its agents, employees, contractors, consultants or attorneys.

 

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16. LIMITATION ON LIABILITY.

Notwithstanding anything to the contrary contained herein, after the Closing: (a) the maximum aggregate liability of Seller, and the maximum aggregate amount which may be awarded to and collected by Buyer (including, without limitation, for any breach of any representation, warranty and/or covenant by Seller) in connection with the sale of the Property to Buyer under this Agreement or any documents executed pursuant hereto or in connection herewith, including, without limitation, the Deed, the Bill of Sale, the Assignment of Leases (collectively, the “Other Documents”, shall under no circumstances whatsoever exceed Four Million Dollars ($4,000,000); and (b) no claim by Buyer alleging a breach by Seller of any representation, warranty and/or covenant of Seller contained herein or in any of the Other Documents may be made, and Seller shall not be liable for any judgment in any action based upon any such claim, unless and until such claim, either alone or together with any other claims by Buyer alleging a breach by Seller of any such representation, warranty and/or covenant is for an aggregate amount in excess of Fifty Thousand Dollars ($50,000) (the “Floor Amount”), in which event Seller’s liability respecting any final judgment concerning such claim or claims shall be for the entire amount thereof, subject to the limitation set forth in clause (a) above; provided, however, that if any such final judgment is for an amount that is less than or equal to the Floor Amount, then Seller shall have no liability with respect thereto. Nothing set forth in this Section 16 is intended to or shall alter or diminish in any way the rights and obligations of the parties under the Lease for the period prior to Closing.

 

17. MISCELLANEOUS PROVISIONS.

 

17.1 Governing Law . This Agreement and the legal relations between the parties hereto shall be governed by and construed and enforced in accordance with the laws of the State of California, without regard to its principles of conflicts of law.

 

17.2 Entire Agreement . This Agreement, including the exhibits and schedules attached hereto, constitutes the entire agreement between Buyer and Seller pertaining to the subject matter hereof and supersedes all prior agreements, understandings, letters of intent, negotiations and discussions, whether oral or written, of the parties, and there are no warranties, representations or other agreements, express or implied, made to either party by the other party in connection with the subject matter hereof except as specifically set forth herein or in the documents delivered pursuant hereto or in connection herewith.

 

17.3 Modifications; Waiver . No supplement, modification, waiver or termination of this Agreement shall be binding unless executed in writing by the party to be bound thereby. No waiver of any provision of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (whether or not similar), nor shall such waiver constitute a continuing waiver unless otherwise expressly provided.

 

17.4

Termination of Lease . Upon the Closing, the Lease shall terminate and be of no further force and effect except for any obligations set forth therein which expressly survive termination. Notwithstanding the foregoing, Buyer may deliver written notice to Seller not later than five (5) Business Days prior to the Closing that Buyer desires the Lease to

 

23


  remain in effect upon the Closing in which case the Lease shall be assigned to Buyer pursuant to the Bill of Sale and Assignment (as described below); provided, that Seller shall retain any claims for any defaults under the Lease which occurred prior to Closing.

 

17.5 Notices . All notices, consents, requests, reports, demands or other communications hereunder (collectively, “ Notices ”) shall be in writing and may be given personally, by reputable overnight delivery service or by facsimile transmission (with in the case of a facsimile transmission, confirmation by reputable overnight delivery service) to each of the parties at the following addresses:

 

To Buyer:   [                                                   ]
  [                                                   ]
  [                                                   ]
  Attention:    _______________
  Telephone:    (          )          -             
  Facsimile:    (          )          -             
With A Copy To:   ____________________
  ____________________
  ____________________
  _______________________
  Attention:    _______________    , Esq.
  Telephone:    (                   -              
  Facsimile:    (                   -                
To Seller:   ___________________________________
  ___________________________________
  ___________________________________
  Attention:    _________________________
  Telephone:    (          )          -             
  Facsimile:    (          )          -             
With A Copy To:   ___________________________________
  ___________________________________
  ___________________________________
  Attention:    _________________________
  Telephone:    (          )          -             
  Facsimile:    (          )          -             
To Escrow Agent:   ___________________________________
  ___________________________________
  Attention:    _________________________
  Telephone:    (          )          -             
  Facsimile:    (          )          -             

or to such other address or such other person as the addressee party shall have last designated by written notice to the other party. Notices given by facsimile transmission

 

24


shall be deemed to be delivered as of the date and time when transmission and receipt of such facsimile is when confirmed; and all other Notices shall have been deemed to have been delivered on the date of delivery or refusal.

 

17.6 Expenses . Subject to the allocation of Closing Costs provided in Section 8.2 hereof, whether or not the transactions contemplated by this Agreement shall be consummated, all fees and expenses incurred by any party hereto in connection with this Agreement shall be borne by such party.

 

17.7 Assignment .

 

  17.7.1 Seller’s Right to Assign . Seller shall not have the right, power, or authority to assign, pledge or mortgage this Agreement or any portion of this Agreement (except to the existing lender of record), or to delegate any duties or obligations arising under this Agreement, voluntarily, involuntarily, or by operation of law.

 

  17.7.2 Buyer’s Right to Assign . Buyer may assign this Agreement (or designate one or more parties to take title to all or any portion of the Property) upon notice to Seller given at least five (5) days prior to the effective date of such assignment, but without the necessity of Seller’s prior consent thereto; provided, however that no such assignment, shall relieve Buyer of its obligations under this Agreement.

 

17.8 Severability . Any provision or part of this Agreement which is invalid or unenforceable in any situation in any jurisdiction shall, as to such situation and such jurisdiction, be ineffective only to the extent of such invalidity and shall not affect the enforceability of the remaining provisions hereof or the validity or enforceability of any such provision in any other situation or in any other jurisdiction.

 

17.9 Successors and Assigns; Third Parties . Subject to and without waiver of the provisions of Section 17.7 hereof, all of the rights, duties, benefits, liabilities and obligations of the parties shall inure to the benefit of, and be binding upon, their respective successors and assigns. Except as specifically set forth or referred to herein, nothing herein expressed or implied is intended or shall be construed to confer upon or give to any person or entity, other than the parties hereto and their successors or assigns, any rights or remedies under or by reason of this Agreement.

 

17.10 Counterparts . This Agreement may be executed in as many counterparts as may be deemed necessary and convenient, and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same instrument.

 

17.11 Headings . The section headings of this Agreement are for convenience of reference only and shall not be deemed to modify, explain, restrict, alter or affect the meaning or interpretation of any provision hereof.

 

17.12 Time of the Essence . Time shall be of the essence with respect to all matters contemplated by this Agreement.

 

25


17.13 Further Assistance . In addition to the actions recited herein and contemplated to be performed, executed, and/or delivered by Seller and Buyer, Seller and Buyer agree to perform, execute and/or deliver or cause to be performed, executed and/or delivered at the Closing or after the Closing any and all such further acts, instruments, deeds and assurances as may be reasonably required to consummate the transactions contemplated hereby.

 

17.14 Number and Gender . Whenever the singular number is used, and when required by the context, the same includes the plural, and the masculine gender includes the feminine and neuter genders.

 

17.15 Construction . This Agreement shall not be construed more strictly against one party hereto than against any other party hereto merely by virtue of the fact that it may have been prepared by counsel for one of the parties.

 

17.16 Exhibits . All exhibits attached hereto are hereby incorporated by reference as though set out in full herein.

 

17.17 Attorneys’ Fees . If any action is brought by either party against the other party, relating to or arising out of this Agreement, the transaction described herein or the enforcement hereof, the prevailing party shall be entitled to recover from the other party reasonable attorneys’ fees, costs and expenses incurred in connection with the prosecution or defense of such action. For purposes of this Agreement, the term “ attorneys’ fees ” or “ attorneys’ fees and costs ” shall mean the fees and expenses of counsel to the parties hereto, which may include printing, photostating, duplicating and other expenses, air freight charges, and fees billed for law clerks, paralegals and other persons not admitted to the bar but performing services under the supervision of an attorney, and the costs and fees incurred in connection with the enforcement or collection of any judgment obtained in any such proceeding. The provisions of this Section shall survive the entry of any judgment, and shall not merge, or be deemed to have merged, into any judgment.

 

17.18 Business Days . As used herein, the term “ Business Day ” shall mean a day that is not a Saturday, Sunday or legal holiday. In the event that the date for the performance of any covenant or obligation under this Agreement shall fall on a Saturday, Sunday or legal holiday under the laws of the State of California, the date for performance thereof shall be extended to the next Business Day.

 

17.19 Natural Hazards . Natural hazards described in the following California code sections may affect the Property: (A) Govt. Code Section 8589.3 (Special Flood Hazard Area); (B) Govt. Code Section 8589.4 (Inundation Area); (C) Govt. Code Section 51183.5 (Fire Hazard Severity Zone); (D) Public Resource Code Section 2621.9 (Earthquake Fault Zone); (E) Public Resource Code Section 2694 (Seismic Hazard Zone); and (F) Public Resource Code Section 4136 (Wildland Area). Seller execute and deliver to Buyer a “Natural Hazards Disclosure Statement” with respect to the foregoing matters obtained by Seller. Buyer shall countersign and deliver to Seller the “Natural Hazards Disclosure Statement”. Buyer acknowledges and agrees that Buyer will independently evaluate and investigate whether any or all of such natural hazards affect the Property, and Seller shall have no liabilities or obligations with respect thereto.

 

26


17.20 Survival of Article 17 . The provisions of this Article 17 shall survive the Closing.

[SIGNATURES ON NEXT PAGE]

 

27


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

 

BUYER:  

 

  ,
  a  

 

 
  By:  

 

 
    Name:  

 

 
    Its:  

 

 
SELLER :  

 

 
  a  

 

 
  By:  

 

    Name:  

 

    Its:  

 

ESCROW AGENT:

The undersigned Escrow Agent accepts the foregoing Agreement of Purchase and Sale and Joint Escrow Instructions and agrees to act as Escrow Agent under this Agreement in strict accordance with its terms.

 

                     TITLE INSURANCE COMPANY    Date:                  , 20    

 

By:  

 

  Name:  

 

  Its:  

 


EXHIBIT A

L EGAL D ESCRIPTION

REAL PROPERTY IN THE CITY OF MENLO PARK, COUNTY OF SAN MATEO, STATE OF CALIFORNIA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

PARCEL ONE:

PARCELS 1, 2, 3 & 4 AS SHOWN ON PARCEL MAP, LANDS OF BNP LEASING CORPORATION, FILED FEBRUARY 16, 1994, BOOK 67 OF PARCEL MAPS, PAGES 36 THROUGH 38 INCLUSIVE, SAN MATEO COUNTY RECORDS AND CORRECTED BY THAT CERTIFICATE OF CORRECTION RECORDED OCTOBER 12, 1994 AS DOCUMENT NO. 94-158967 OFFICIAL RECORDS, SAN MATEO COUNTY.

PARCEL TWO:

NON-EXCLUSIVE EASEMENTS FOR UTILITIES, FIRE PROTECTION WATER MAIN AND PIPES AND PRIMARY ACCESS AS GRANTED IN THAT CERTAIN EASEMENT AGREEMENT RECORDED OCTOBER 29, 1993 AS INSTRUMENT NO. 93186615, OFFICIAL RECORDS.

APN: 055-411-110, 120, 130 and 140

 

A-1


EXHIBIT B

FORM OF GRANT DEED

RECORDING REQUESTED BY

AND WHEN RECORDED MAIL TO:

 

 

 

 

 

 

 

 

Attention:

MAIL TAX STATEMENTS TO:

 

  ,

 

 

 

 

 

 

 

 

Assessor’s Parcel Number(s): 55-411-110, 55-411-120, 55-411-130 and 55-411-140

GRANT DEED

The undersigned Grantor declares that Documentary Transfer Tax is not part of the public records.

FOR A VALUABLE CONSIDERATION , receipt of which is hereby acknowledged,                      , a                      (“ Grantor ”), hereby GRANTS to                      , a                      (“ Grantee ”), that certain real property located in the County of San Mateo, State of California and more particularly described in Exhibit A attached hereto and incorporated herein by this reference (the “ Property ”), together with (i) all improvements located thereon, (ii) all rights, privileges, easements and appurtenances appertaining to the Property, and (iii) all right, title and interest of Grantor (if any) in, to and under adjoining streets, rights of way and easements, subject to all exceptions to title set forth on Exhibit B and made a part hereof.

 

B-1


IN WITNESS WHEREOF , Grantor has caused its duly authorized representatives to execute this instrument as of                  , 20    .

 

GRANTOR:    

 

  ,
    a  

 

    By:  

 

      Its:  

 

 

B-2


State of California

County of                                                                  

 

On  

 

  before me,  

 

  ,
  Date     Here Insert Name and Title of Officer  
personally appeared  

 

 
Name(s) of Signer(s)  

 

  ,

 

who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.    
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.     Place Notary Seal Above
WITNESS my hand and official seal.    
Signature  

 

   
  Signature of Notary Public    

 

B-3


EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY

REAL PROPERTY IN THE CITY OF MENLO PARK, COUNTY OF SAN MATEO, STATE OF CALIFORNIA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

PARCEL ONE:

PARCELS 1, 2, 3 & 4 AS SHOWN ON PARCEL MAP, LANDS OF BNP LEASING CORPORATION, FILED FEBRUARY 16, 1994, BOOK 67 OF PARCEL MAPS, PAGES 36 THROUGH 38 INCLUSIVE, SAN MATEO COUNTY RECORDS AND CORRECTED BY THAT CERTIFICATE OF CORRECTION RECORDED OCTOBER 12, 1994 AS DOCUMENT NO. 94-158967 OFFICIAL RECORDS, SAN MATEO COUNTY.

PARCEL TWO:

NON-EXCLUSIVE EASEMENTS FOR UTILITIES, FIRE PROTECTION WATER MAIN AND PIPES AND PRIMARY ACCESS AS GRANTED IN THAT CERTAIN EASEMENT AGREEMENT RECORDED OCTOBER 29, 1993 AS INSTRUMENT NO. 93186615, OFFICIAL RECORDS.

APN: 055-411-110, 120, 130 and 140

 

B-4


EXHIBIT B

EXCEPTIONS TO TITLE

 

B-5


STATEMENT OF TAX DUE AND REQUEST

THAT TAX DECLARATION NOT BE MADE A PART

OF THE PERMANENT RECORD

IN THE OFFICE OF THE

COUNTY RECORDER

(Pursuant to Cal. Rev. and Tax Code Section 11932)

 

To : Registrar – Recorder

County of San Mateo

Request is hereby made in accordance with the provision of the Documentary Transfer Tax Act that the amount of tax due not be shown on the original document which names:

                                                                                     ,

a                                                               , as Grantor,

and

                                                                       , a                                                                       , as Grantee.

The property described in the accompanying document is located in San Mateo County, California.

The amount of tax due to the County of San Mateo on the accompanying document is $                    , [and the amount of tax due to the City of Menlo Park on the accompanying document is $                    , each] computed on full value of property conveyed.

 

GRANTOR:    

 

  ,
    a  

 

    By:  

 

      Its:  

 

 

NOTE: After the permanent record is made, this form will be affixed to the conveying document and returned with it.

 

B-6


EXHIBIT C

SERVICE CONTRACTS

[To be provided by Seller at the time of execution of this Agreement]

 

C-1


EXHIBIT D

PROFORMA

 

D-1


Form No. 1402.06   
ALTA Owner’s Policy (6-17-06)    Policy Number: 444887

OWNER’S POLICY OF TITLE INSURANCE

Issued by

First American Title Insurance Company

Any notice of claim and any other notice or statement in writing required to be given to the Company under this policy must be given to the Company at the address shown in Section 18 of the Conditions.

COVERED RISKS

SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS, FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation (the “Company”) insures, as of Date of Policy and, to the extent stated in Covered Risks 9 and 10, after Date of Policy, against loss or damage, not exceeding the Amount of Insurance, sustained or incurred by the Insured by reason of:

 

1. Title being vested other than as stated in Schedule A.

 

2. Any defect in or lien or encumbrance on the Title. This Covered Risk includes but is not limited to insurance against loss from

 

  (a) A defect in the Title caused by

 

  (i) forgery, fraud, undue influence, duress, incompetency, incapacity, or impersonation;

 

  (ii) failure of any person or Entity to have authorized a transfer or conveyance;

 

  (iii) a document affecting Title not property created, executed, witnessed, sealed, acknowledged, notarized or delivered;

 

  (iv) failure to perform those acts necessary to create a document by electronic means authorized by law;

 

  (v) a document executed under a falsified, expired, or otherwise invalid power of attorney;

 

  (vi) a document not properly filed, recorded, or indexed in the Public Records including failure to perform those act by electronic means authorized by law; or

 

  (vii) a defective judicial or administrative proceeding.

 

  (b) The lien of real-estate taxes or assessments imposed on the Title by a governmental authority due or payable, but unpaid.

 

  (c) Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land. The term “encroachment” includes encroachments of existing improvements located on the Land onto adjoining land, and encroachments onto the Land of existing improvements located on adjoining land.

 

3. Unmarketable Title.

 

4. No right of access to and from the Land.


5. The violation or enforcement of any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to

 

  (a) the occupancy, use, or enjoyment of the Land;

 

  (b) the character, dimensions, or location of any improvement erected on the Land;

 

  (c) the subdivision of land; or

 

  (d) environmental protection

If a notice, describing any part of the Land, is recorded in the Public Records setting forth the violation or intention to enforce, but only to the extent of the violation or enforcement referred to in that notice.

 

6. An enforcement action based on the exercise of a governmental police power not covered by Covered Risk 5. If a notice of the enforcement action, describing any part of the Land, is recorded in the Public Records, but only to the extent of the enforcement referred to in that notice.

 

7. The exercise of the rights of eminent domain if a notice of the exercise, describing any part of the Land, is recorded in the Public Records.

 

8. Any taking by a governmental body that has occurred and is binding on the rights of a purchaser for value without Knowledge.

 

9. Title being vested other than as stated in Schedule A or being defective

 

  (a) as a result of the avoidance in whole or in part, or from a court order providing an alternative remedy, of a transfer of all or any part of the title to or any interest in the Land occurring prior to the transaction vesting Title as shown in Schedule A because that prior transfer constituted a fraudulent or preferential transfer under federal bankruptcy, state insolvency, or similar creditors’ rights laws; or

 

  (b) because the instrument of transfer vesting Title as shown in Schedule A constitutes a preferential transfer under federal bankruptcy, state insolvency, or similar creditors’ rights laws by reason of the failure of its recording in the Public Records

 

  (i) to be timely, or

 

  (ii) to impart notice of its existence to a purchaser for value or to a judgment or lien creditor.

 

10. Any defect in or lien or encumbrance on the Title or other matter included in Covered Risks 1 through 9 that has been created or attached or has been filed or recorded in the Public Records subsequent to Date of Policy and prior to the recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A.

The Company will also pay the costs, attorneys’ fees, and expenses incurred in defense of any matter insured against by this policy, but only to the extent provided in the Conditions.

First American Title Insurance Company

 

BY  

/s/

    PRESIDENT
ATTEST  

/s/

    SECRETARY


EXCLUSIONS FROM COVERAGE

The following matters are expressly excluded from the coverage of this policy, and the Company will not pay loss or damage, costs, attorneys’ fees, or expenses that arise by reason of:

1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting, or relating to

(i) the occupancy, use or enjoyment of the Land;

(ii) the character, dimensions or location of any improvement erected on the Land;

(iii) the subdivision of land; or

(iv) environmental protection;

or the effect of any violation of these laws, ordinances, or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5.

(b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6.

2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8.

3. Defects, liens, encumbrances, adverse claims, or other matters

(a) created, suffered, assumed, or agreed to by the Insured Claimant;

(b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy;

(c) resulting in no loss or damage to the Insured Claimant;

(d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risks 9 and 10); or

(e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title.

4. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors’ rights laws, that the transaction vesting the Title as shown in Schedule A, is

(a) a fraudulent conveyance or fraudulent transfer; or

(b) a preferential transfer for any reason not stated in Covered Risk 9 of this policy.

5. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A.

CONDITIONS

1. DEFINITION OF TERMS

The following terms when used in this policy mean:

 

  (a) “Amount of Insurance”: The amount stated in Schedule A as may be increased or decreased by endorsement to this policy, increased by Section 8(b), or decreased by Sections 10 and 11 of these Conditions.

 

  (b) “Date of Policy”: The date designated as “Date of Policy” in Schedule A.

 

  (c) “Entity”: A corporation, partnership, trust, limited liability company, or other similar legal entity.

 

  (d) “Insured”: The Insured named in Schedule A.

 

  (i) The term “Insured” also includes


  (A) successors to the Title of the Insured by operation of law as distinguished from purchase, including heirs, devisees, survivors, personal representatives, or next of kin;

 

  (B) successors to an Insured by dissolution, merger, consolidation, distribution, or reorganization;

 

  (C) successors to an Insured by its conversion to another kind of Entity;

 

  (D) a grantee of an Insured under a deed delivered without payment of actual valuable consideration conveying the Title

 

  (1) if the stock, shares, memberships, or other equity interests of the grantee are wholly-owned by the named Insured,

 

  (2) if the grantee wholly owns the named Insured,

 

  (3) if the grantee is wholly-owned by an affiliated Entity of the named Insured, provided the affiliated Entity and the named Insured are both wholly-owned by the same person or Entity, or

 

  (4) if the grantee is a trustee or beneficiary of a trust created by a written instrument established by the Insured named in Schedule A for estate planning purposes.

 

  (ii) With regard to (A), (B), (C), and (D) reserving, however, all rights and defenses as to any successor that the Company would have had against any predecessor Insured.

 

  (e) “Insured Claimant”: An Insured claiming loss or damage.

 

  (f) “Knowledge” or “Known”: Actual knowledge, not constructive knowledge or notice that may be imputed to an Insured by reason of the Public Records or any other records that impart constructive notice of matters affecting the Title.

 

  (g) “Land”: The land described in Schedule A, and affixed improvements that by law constitute real property. The term “Land” does not include any property beyond the lines of the area described in Schedule A, nor any right, title, interest, estate, or easement in abutting streets, roads, avenues, alleys, lanes, ways, or waterways, but this does not modify or limit the extent that a right of access to and from the Land is insured by this policy.

 

  (h) “Mortgage”: Mortgage, deed of trust, trust deed, or other security instrument, including one evidenced by electronic means authorized by law.

 

  (i) “Public Records”: Records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without Knowledge. With respect to Covered Risk 5(d), “Public Records” shall also include environmental protection liens filed in the records of the clerk of the United States District Court for the district where the land is located.

 

  (j) “Title”: The estate or interest described in Schedule A.

 

  (k) “Unmarketable Title”: Title affected by an alleged or apparent matter that would permit a prospective purchaser or lessee of the Title or lender on the Title to be released from the obligation to purchase, lease, or lend if there is contractual condition requiring the delivery of marketable title.


2. CONTINUATION OF INSURANCE

The coverage of this policy shall continue in force as of Date of Policy in favor of an Insured, but only so long as the Insured retains an estate or interest in the Land, or holds an obligation secured by a purchase money Mortgage given by a purchaser from the Insured, or only so long as the Insured shall have liability by reason of warranties in any transfer or conveyance of the Title. This policy shall not continue in force in favor of any purchaser from the Insured of either (i) an estate or interest in the Land, or (ii) an obligation secured by a purchase money Mortgage given to the Insured.

3. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT

The Insured shall notify the Company promptly in writing (i) in case of any litigation as set forth in Section 5(a) of these Conditions, (ii) in case Knowledge shall come to an Insured hereunder of any claim of title or interest that is adverse to the Title, as insured, and that might cause loss or damage for which the Company may be liable by virtue of this policy, or (iii) if the Title, as insured, is rejected as Unmarketable Title. If the Company is prejudiced by the failure of the Insured Claimant to provide prompt notice, the Company’s liability to the Insured Claimant under the policy shall be reduced to the extent of the prejudice.

4. PROOF OF LOSS

In the event the Company is unable to determine the amount of loss or damage, the Company may, at its option, require as a condition of payment that the Insured Claimant furnish a signed proof of loss. The proof of loss must describe the defect, lien, encumbrance, or other matter insured against by this policy that constitutes the basis of loss or damage and shall state, to the extent possible, the basis of calculating the amount of the loss or damage.

5. DEFENSE AND PROSECUTION OF ACTIONS

 

  (a) Upon written request by the Insured, and subject to the options contained in Section 7 of these Conditions, the Company, at its own cost and without unreasonable delay, shall provide for the defense of an Insured in litigation in which any third party asserts a claim covered by this policy adverse to the Insured. This obligation is limited to only those stated causes of action alleging matters insured against by this policy. The Company shall have the right to select counsel of its choice (subject to the right of the Insured to object for reasonable cause) to represent the Insured as to those stated causes of action. It shall not be liable for and will not pay the fees of any other counsel. The Company will not pay any fees, costs, or expenses incurred by the Insured in the defense of those causes of action that allege matters not insured against by this policy.

 

  (b) The Company shall have the right, in addition to the options contained in Section 7 of these Conditions, at its own cost, to institute and prosecute any action or proceeding or to do any other act that in its opinion may be necessary or desirable to establish the Title, as Insured, or to prevent or reduce loss or damage to the Insured. The Company may take any appropriate action under the terms of this policy, whether or not it shall be liable to the Insured. The exercise of these rights shall not be an admission of liability or waiver of any provision of this policy. If the Company exercises its rights under this subsection, it must do so diligently.

 

  (c) Whenever the Company brings an action or asserts a defense as required or permitted by this policy, the Company may pursue the litigation to a final determination by a court of competent jurisdiction, and it expressly reserves the right, in its sole discretion, to appeal any adverse judgment or order.


6. DUTY OF INSURED CLAIMANT TO COOPERATE

 

  (a) In all cases where this policy permits or requires the Company to prosecute or provide for the defense of any action or proceeding and any appeals, the Insured shall secure to the Company the right to so prosecute or provide defense in the action or proceeding, including the right to use, at its option, the name of the Insured for this purpose. Whenever requested by the Company, the Insured, at the Company’s expense, shall give the Company all reasonable aid (i) in securing evidence, obtaining witnesses, prosecuting or defending the action or proceeding, or effecting settlement, and (ii) in any other lawful act that in the opinion of the Company may be necessary or desirable to establish the Title or any other matter as insured. If the Company is prejudiced by the failure of the Insured to furnish the required cooperation, the Company’s obligations to the Insured under the policy shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation, with regard to the matter or matters requiring such cooperation.

 

  (b) The Company may reasonably require the Insured Claimant to submit to examination under oath by any authorized representative of the Company and to produce for examination, inspection, and copying, at such reasonable times and places as may be designated by the authorized representative of the Company, all records, in whatever medium maintained, including books, ledgers, checks, memoranda, correspondence, reports, e-mails, disks, tapes, and videos whether bearing a date before or after Date of Policy, that reasonably pertain to the loss or damage. Further, if requested by any authorized representative of the Company, the Insured Claimant shall grant its permission, in writing, for any authorized representative of the Company to examine, inspect, and copy all of these records in the custody or control of a third party that reasonably pertain to the loss or damage. All information designated as confidential by the Insured Claimant provided to the Company pursuant to this Section shall not be disclosed to others unless, in the reasonable judgment of the Company, it is necessary in the administration of the claim. Failure of the Insured Claimant to submit for examination under oath, produce any reasonably requested information, or grant permission to secure reasonably necessary information from third parties as required in this subsection, unless prohibited by law or governmental regulation, shall terminate any liability of the Company under this policy as to that claim.

7. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY

In case of a claim under this policy, the Company shall have the following additional options:

 

  (a) To Pay or Tender Payment of the Amount of Insurance.

To pay or tender payment of the Amount of Insurance under this policy together with any costs, attorneys’ fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment or tender of payment and that the Company is obligated to pay. Upon the exercise by the Company of this option, all liability and obligations of the Company to the Insured under this policy, other than to make the payment required in this subsection, shall terminate, including any liability or obligation to defend, prosecute or continue any litigation.


  (b) To Pay or Otherwise Settle With Parties Other Than the Insured or With the Insured Claimant.

 

  (i) To pay or otherwise settle with other parties for or in the name of an Insured Claimant any claim insured against under this policy. In addition, the Company will pay any costs, attorneys’ fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment and that the Company is obligated to pay; or

 

  (ii) To pay or otherwise settle with the Insured Claimant the loss or damage provided for under this policy, together with any costs, attorneys’ fees, and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment and that the Company is obligated to pay.

Upon the exercise by the Company of either of the options provided for in subsections (b)(i) or (ii), the Company’s obligations to the Insured under this policy for the claimed loss or damage, other than the payments required to be made, shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation.

8. DETERMINATION AND EXTENT OF LIABILITY

This policy is a contract of Indemnity against actual monetary loss or damage sustained or incurred by the Insured Claimant who has suffered loss or damage by reason of matters insured against by this policy.

 

  (a) The extent of liability of the Company for loss or damage under this policy shall not exceed the lesser of

 

  (i) the Amount of Insurance; or

 

  (ii) the difference between the value of the Title as insured and the value of the Title subject to the risk insured against by this policy.

 

  (b) If the Company pursues its rights under Section 5 of these Conditions and is unsuccessful in establishing the Title, as insured,

 

  (i) the Amount of Insurance shall be increased by 10%, and

 

  (ii) the Insured Claimant shall have the right to have the loss or damage determined either as of the date the claim was made by the Insured Claimant or as of the date it is settled and paid.

 

  (c) In addition to the extent of liability under (a) and (b), the Company will also pay those costs, attorneys’ fees, and expenses incurred in accordance with Sections 5 and 7 of these Conditions.

9. LIMITATION OF LIABILITY

 

  (a) If the Company establishes the Title, or removes the alleged defect, lien, or encumbrance, or cures the lack of a right of access to or from the Land, or cures the claim of Unmarketable Title, all as insured, in a reasonably diligent manner by any method, including litigation and the completion of any appeals, it shall have fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused to the Insured.

 

  (b) In the event of any litigation, including litigation by the Company or with the Company’s consent, the Company shall have no liability for loss or damage until there has been a final determination by a court of competent jurisdiction, and disposition of all appeals, adverse to the Title, as insured.


  (c) The Company shall not be liable for loss or damage to the Insured for liability voluntary assumed by the Insured in settling any claim or suit without the prior written consent of the Company.

10. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION OF LIABILITY

All payments under this policy, except payments made for costs, attorneys’ fees, and expenses, shall reduce the Amount of Insurance by the amount of the payment.

11. LIABILITY NONCUMULATIVE

The Amount of Insurance shall be reduced by any amount the Company pays under any policy insuring a Mortgage to which exception is taken in Schedule B or to which the Insured has agreed, assumed, or taken subject, or which is executed by an Insured after Date of Policy and which is a charge or lien on the Title, and the amount so paid shall be deemed a payment to the Insured under this policy.

12. PAYMENT OF LOSS

When liability and the extent of loss or damage have been definitely fixed in accordance with these Conditions, the payment shall be made within 30 days.

13. RIGHTS OF RECOVERY UPON PAYMENT OR SETTLEMENT

 

  (a) Whenever the Company shall have settled and paid a claim under this policy, it shall be subrogated and entitled to the rights of the Insured Claimant in the Title and all other rights and remedies in respect to the claim that the Insured Claimant has against any person or property, to the extent of the amount of any loss, costs, attorneys’ fees, and expenses paid by the Company. If requested by the Company, the Insured Claimant shall execute documents to evidence the transfer to the Company of these rights and remedies. The Insured Claimant shall permit the Company to sue, compromise, or settle in the name of the Insured Claimant and to use the name of the Insured Claimant in any transaction or litigation involving these rights and remedies.

If a payment on account of a claim does not fully cover the loss of the Insured Claimant, the Company shall defer the exercise of its right to recover until after the Insured Claimant shall have recovered its loss.

 

  (b) The Company’s right of subrogation includes the rights of the Insured to indemnities, guaranties, other policies of insurance, or bonds, notwithstanding any terms or conditions contained in those instruments that address subrogation rights.

14. ARBITRATION

Either the Company or the Insured may demand that the claim or controversy shall be submitted to arbitration pursuant to the Title Insurance Arbitration Rules of the American Land Title Association (“Rules”). Except as provided in the Rules, there shall be no joinder or consolidation with claims or controversies of other persons. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the Insured arising out of or relating to this policy, any service in connection with its issuance or the breach of a policy provision, or to any other controversy or claim arising out of the transaction giving rise to this policy. All arbitrable matters when the Amount of Insurance is $2,000,000 or less shall be arbitrated at the option of either the Company or the Insured. All arbitrable matters when the


Amount of Insurance is in excess of $2,000,000 shall be arbitrated only when agreed to by both the Company and the Insured. Arbitration pursuant to this policy and under the Rules shall be binding upon the parties. Judgment upon the award rendered by the Arbitrator(s) may be entered in any court of competent jurisdiction.

15. LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE CONTRACT

 

  (a) This policy together with all endorsements, if any attached to it by the Company is the entire policy and contract between the Insured and the Company. In interpreting any provision of this policy, this policy shall be construed as a whole.

 

  (b) Any claim of loss or damage that arises out of the status of the Title or by any action asserting such claim shall be restricted to this policy.

 

  (c) Any amendment of or endorsement to this policy must be in writing and authenticated by an authorized person, or expressly incorporated by Schedule A of this policy.

 

  (d) Each endorsement to this policy issued at any time is made a part of this policy and is subject to all of its terms and provisions. Except as the endorsement expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsement, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance.

16. SEVERABILITY

In the event any provision of this policy, in whole or in part, is held invalid or unenforceable under applicable law, the policy shall be deemed not to include that provision or such part held to be invalid, but all other provisions shall remain in full force and effect.

17. CHOICE OF LAW; FORUM

 

  (a) Choice of Law. The Insured acknowledges the Company has underwritten the risks covered by this policy and determined the premium charged therefore in reliance upon the law affecting interests in real property and applicable to the interpretation, rights, remedies, or enforcement of policies of title insurance of the jurisdiction where the Land is located. Therefore, the court or an arbitrator shall apply the law of the jurisdiction where the Land is located to determine the validity of claims against the Title that are adverse to the Insured and to interpret and enforce the terms of this policy. In neither case shall the court or arbitrator apply its conflicts of law principles to determine the applicable law.

 

  (b) Choice of Forum: Any litigation or other proceeding brought by the Insured against the Company must be filed only in a state or federal court within the United States of America or its territories having appropriate jurisdiction.

18. NOTICES, WHERE SENT

Any notice of claim and any other notice or statement in writing required to be given to the Company under this policy must be given to the Company at 1 First American Way, Santa Ana, CA 92707, Attn: Claims Department.


SCHEDULE A

First American Title Insurance Company

Name and Address of the Issuing Title Insurance Company:

First American Title Insurance Company

1737 North First Street, Suite 500

San Jose, CA 95112

 

File No.: NCS-444887-SC    Policy No.: 444887             

Address Reference: 10, 15, 16 and 18 Network Circle, Menlo Park, CA 94025

Amount of Insurance: $100,000,000.00

Date of Policy:                     , 2011 at                     

 

1. Name of Insured:

Wilson Menlo Park Campus, LLC, a Wisconsin limited liability company

 

2. The estate or interest in the Land that is insured by this policy is:

A fee as to Parcel One and an easement as to Parcel Two

 

3. Title is vested in:

Wilson Menlo Park Campus, LLC, a Wisconsin limited liability company

 

4. The Land referred to in this policy is described as follows:

Real property in the City of Menlo Park, County of San Mateo, State of California, described as follows:

PARCEL ONE:

PARCELS 1, 2, 3 & 4 AS SHOWN ON PARCEL MAP, LANDS OF BNP LEASING CORPORATION, FILED FEBRUARY 16, 1994, BOOK 67 OF PARCEL MAPS, PAGES 36 THROUGH 38 INCLUSIVE, SAN MATEO COUNTY RECORDS AND CORRECTED BY THAT CERTIFICATE OF CORRECTION RECORDED OCTOBER 12, 1994 AS DOCUMENT NO 94-158967 OFFICIAL RECORDS SAN MATEO COUNTY.

PARCEL TWO:

NON-EXCLUSIVE EASEMENTS FOR UTILITIES, FIRE PROTECTION WATER MAIN AND PIPES AND PRIMARY ACCESS AS GRANTED IN THAT CERTAIN EASEMENT AGREEMENT RECORDED OCTOBER 29, 1993 AS INSTRUMENT NO. 93186615, OFFICIAL RECORDS.

APN: 055-411-110, 120, 130 and 140


SCHEDULE B

 

File No.: NCS-444887-SC    Policy No.: 444887             

EXCEPTIONS FROM COVERAGE

This Policy does not insure against loss or damage, and the Company will not pay costs, attorneys’ fees, or expenses that arise by reason of:

 

1. General and special taxes and assessments for the fiscal year 2011-2012, a lien not yet due or payable.

General and special taxes and assessments for the fiscal year 2010-2011.

 

First Installment    $895,099.87, PAID
Penalty:    $0.00
Second Installment:    $895,099.87, PAYABLE
Penalty:    $0.00
Tax Rate Area:    08-080
A. P. No.:    055-411-110-4

 

1b. General and special taxes and assessments for the fiscal year 2010-2011.

 

First Installment:    $301,306.65, PAID
Penalty:    $0.00
Second Installment:    $301,306.65, PAYABLE
Penalty:    $0.00
Tax Rate Area:    08-080
A. P. No.:    055-411-120-3

 

1c General and special taxes and assessments for the fiscal year 2010-2011.

 

First Installment:    $270,853.92, PAID
Penalty:    $0.00
Second Installment:    $270,853.92 PAYABLE
Penalty:    $0.00
Tax Rate Area:    08-080
A. P. No.:    055-411-130-2

 

1d General and special taxes and assessments for the fiscal year 2010-2011.

 

First Installment:    $494,616.42, PAID
Penalty:    $0.00
Second installment:    $494,616.42, PAYABLE
Penalty:    $0.00
Tax Rate Area:    08-080
A. P. No.:    055-411-140-1


2. The lien of supplemental taxes, if any, assessed as a result of the transfer of title to the vestee named in Schedule A; or as a result of changes in ownership, new construction or other events occurring on or after the Date of Policy.

 

3. Amendment to reservation:

Executed by: Fred Carnduff, Chester Carnduff, Edgar Carnduff, Jeanette Carnduff Thornton, Alfred A. Affinito and Bess M. Affinito

Dated: June 06, 1968

Recorded: June 14, 1968

Document No.: 50849-AB

Book/Reel 5487 of Official Records at Page/Image 381, Records of San Mateo County, California.

Said amendment modifies the reservations contained in Grant Deed

From: Edgar Carnduff, et al

To: Nathaniel Hellman, et al

Recorded: September 17, 1964

Book/Reel 4799 of Official Records at Page/Image 48, Records of San Mateo County, California

Said amendment quitclaims rights in reserved minerals within the surface 500 feet except for two one acre sites described as Parcels “E” and “F” together with 20 foot wide access easements. Said amendment also amends the reservation for access to property South of the Southern Pacific R.R. to except the property herein described.

Said matter affects Parcels 3 and 4.

 

4. The fact that the land lies within the boundaries of the Las Pulgas Redevelopment Project Area, as disclosed by the document recorded December 21, 1981 as Instrument No. 19388-AT of Official Records.

Document(s) declaring modifications thereof recorded September 11, 1991 as Instrument No. 91120049 of Official Records.

Document(s) declaring modifications thereof recorded September 11, 1991 as Instrument No. 91120050 of Official Records.

Document(s) declaring modifications thereof recorded August 10, 1995 as Instrument No. 95-81846 of Official Records,

Said matter affects Parcels 1, 2, 3 and 4.

 

5. An easement for drainage and incidental purposes, recorded July 27, 1983 as Instrument No. 83078012 of Official Records.

 

In Favor of:    State of California
Affects:    A portion of Parcel 4


6. An easement for road and incidental purposes, recorded July 27, 1983 as Instrument No. 83078012 of Official Records.

 

In Favor of:    State of California
Affects:    A portion of Parcel 4

 

7. Abutter’s rights of ingress and egress to or from Adjoining Freeway have been relinquished in the document recorded July 27, 1983 as Instrument No. 83078012 of Official Records.

Access if restricted to certain portions of frontage along said condemned lands.

Two additional areas for access were granted by Director’s Deed the State of California to Sun Microsystems, Inc., recorded September 12, 1994, Series No. 94144503 of Official Records of San Mateo County, California.

Said matter affects Parcel 1.

 

8. The terms, covenants and conditions as contained in Permit No, 26-78, Amendment No. 3 by and between the San Francisco Bay Conservation and Development Commission and Raychem Corporation, recorded March 18, 1991 under Recorders Serial No. 91029676 of Official Records of San Mateo County, California.

An assignment of BCDC permit, recorded March 26, 1992 under Recorders Serial No. 92042489; Official Records of San Mateo County, California.

Amendment No. Four thereunder dated August 13, 1993, recorded September 09, 1993, Serial No. 93152912.

Document(s) declaring modifications thereof recorded October 01, 1996 as Instrument No. 96-122081 of Official Records.

Document(s) declaring modifications thereof recorded October 03, 1994 as Instrument No. 94-154419 of Official Records.

Document(s) declaring modifications thereof recorded November 04, 1994 as Instrument No. 99-170831 of Official Records.

Terms and provisions of an Assignment of BCDC Permit dated                     , 2011 by and between [Purchaser] as assignee and and Sun Microsystems, Inc., recorded                     , 2011 as Instrument No.                      of Official Records.

Said matter affects Parcels 1, 2, 3 and 4

 

9. An easement shown or dedicated on the map filed or recorded February 16, 1994 as Book 67, Page 36 of Parcel Maps.

 

For:    Water meter and incidental purposes.


Said matter affects Parcels 1, 3 and 4

 

10. The terms and provisions contained in the document entitled “Sun Microsystems, Inc. Reimbursement Agreement” recorded September 14, 1995 as Instrument No. 95097004 of Official Records.

Said matter affects Parcels 1, 2, 3 and 4

 

11. The rights of the following tenants, as tenants only without rights of first offer, rights of first refusal or options to purchase all or any portion of the property or interests therein:

a. Oracle/Sun Microsystems

b. Roark Properties LLC

 

12. Any claim that any portion of the land is or was formerly tidelands and submerged lands within the bed of any tidal slough or creek.

 

13. The following matters disclosed by an ALTA/ACSM survey made by BKF an November 17, 2010, designated Job No. 107144-50:

a. The fact that driveways in the parking area extend across the Southerly boundary of Parcel 4.

 

14. A Deed of Trust to secure an original indebtedness of $                     recorded                     , 2011 as instrument No.                      of Official Records.

 

Dated:                        , 2011
Trustor:    [Purchaser]
Trustee:   
Beneficiary:   

 

15. Terms and provisions of an unrecorded lease dated                      , 2011, by and between [Purchaser] as lessor and Facebook, Inc., a Delaware corporation as lessee, as disclosed by a Memorandum of Lease recorded                     , 2011 as Instrument No.                      of Official Records.


ENDORSEMENT

Attached to Policy No. 444887

Issued by

First American Title Insurance Company

The Company insures against loss or damage sustained by the Insured by reason of:

 

1. The existence, at Date of Policy, of any of the following unless expressly excepted in Schedule B:

 

  a. Present violations on the Land of any enforceable covenants, conditions, or restrictions, or any existing improvements on the Land that violate any building setback lines shown on a plat of subdivision recorded or filed in the Public Records.

 

  b. Any instrument referred to in Schedule B as containing covenants, conditions, or restrictions on the Land that, in addition, (i) establishes an easement on the Land, (ii) provides for an option to purchase, a right of first refusal, or the prior approval of a future purchaser or occupant, or (iii) provides a right of reentry, possibility of reverter, or right of forfeiture because of violations on the Land of any enforceable covenants, conditions, or restrictions.

 

  c. Any encroachment of existing improvements located on the Land onto adjoining land, or any encroachment onto the Land of existing improvements located on adjoining land.

 

  d. Any encroachment of existing improvements located on the Land onto that portion of the Land subject to any easement excepted in Schedule B.

 

  e. Any notices of violation of covenants, conditions, or restrictions relating to environmental protection recorded or filed in the Public Records.

 

2. Damage to existing buildings:

 

  a. That are located on or encroach upon that portion of the Land subject to any easement excepted in Schedule B, which damage results from the exercise of the right to maintain the easement for the purpose for which it was granted or reserved;

 

  b. Resulting from the future exercise of any right existing at Date of Policy to use the surface of the Land for the extraction or development of minerals excepted from the description of the Land or excepted in Schedule B.

 

3. Any final court order or judgment requiring the removal from any land adjoining the Land of any encroachment, other than fences, landscaping, or driveways, excepted in Schedule B.

 

4. Any final court order or judgment denying the right to maintain any existing building on the Land because of any violation of covenants, conditions, or restrictions, or building setback lines shown on a plat of subdivision recorded or filed in the Public Records.


Wherever in this endorsement the words “covenants, conditions, or restrictions” appear, they shall not be deemed to refer to or include the terms, covenants, conditions, or limitations contained in an instrument creating a lease.

As used in paragraphs 1.a. and 4, the words “covenants, conditions, or restrictions” do not include any covenants, conditions, or restrictions (a) relating to obligations of any type to perform maintenance, repair, or remediation on the Land, or (b) pertaining to environmental protection of any kind or nature, including hazardous or toxic matters, conditions, or substances, except to the extent that a notice of a violation or alleged violation affecting the Land has been recorded or filed in the Public Records at Date of Policy and is not excepted in Schedule B.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

American Land Title Association

Endorsement 9-2-06 (Restrictions, Encroachments, Minerals-

Owner’s Policy – Improved Land)

Adopted 6/17/06


ENDORSEMENT

Attached to Policy No. 444887

Issued by

First American Title Insurance Company

The company insures against loss or damage sustained by the Insured by reason of:

 

  (1) damage to an existing building located on the Land; or

 

  (2) enforced removal or alteration of an existing building located on the Land,

as a result of the exercise of the right of use or maintenance of the easement referred to in Exception 3, 5, 6 or 10 of Schedule B for the purpose for which it was granted or reserved.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy; or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

American Land Title Association

Endorsement 28-06 (Easement – Damage or Enforced Removal)

Adopted 10/16/08


ENDORSEMENT

Attached to Policy No. 444887

Issued by

First American Title Insurance Company

The Company insures against loss or damage sustained by the Insured if, at Date of Policy (i) the Land does not abut and have both actual vehicular and pedestrian access to and from Bayfront Expressway (the “Street(s)”), (ii) the Street(s) is/are not physically open and publicly maintained, or (iii) the Insured has no right to use existing curb cuts or entries along that/those portion(s) of the Street(s) abutting the Land.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

American Land Title Association

Endorsement 17-06 (Access and Entry)

Adopted 6/17/06


ENDORSEMENT

Attached to Policy No. 444887

Issued by

First American Title Insurance Company

The Company insures against loss or damage sustained by the Insured by reason of the failure of commercial buildings, known as 10, 15, 16 and 18 Network Circle, Menlo Park, CA 94025, to be located on the Land at Date of Policy.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision or the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

American Land Title Association

Endorsement 22-06 (Location)

Adopted 6/17/06


ENDORSEMENT

Attached to Policy No. 444887

Issued by

First American Title Insurance Company

The Company insures against loss or damage sustained by reason of the failure of the Land to be the same as that delineated on the survey, made by BKF, dated November 17, 2010, Job No. 107144-50.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

CLTA Form 116.7-06 (03-09-07)

ALTA – Owner


ENDORSEMENT

Attached to Policy No. 444887

Issued by

First American Title Insurance Company

The Company insures against loss or damage sustained by the Insured by reason of:

 

  1. the failure of the Easterly line of Parcel 1 of the Land to be contiguous to the Westerly line of Parcel 3;

 

  2. the failure of the Northerly line of Parcel 1 of the Land to be contiguous to the Southerly line of Parcel 2;

 

  3. the failure of the Southerly line of Parcel 2 of the Land to be contiguous to the Northerly line of Parcels 3 and 4;

 

  4. the failure of the Easterly line of Parcel 3 of the Land to be contiguous to the Westerly line of Parcel 4; or

 

  5. the presence of any gaps, strips, or gores separating any of the contiguous boundary lines described above.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

American Land Title Association

Endorsement 19-06 (Contiguity-Multiple Parcels)

Adopted 6/17/06


ENDORSEMENT

Attached to Policy No. 444887

Issued by

First American Title Insurance Company

The Company insures against loss or damage sustained by reason of the failure of the Land described as Parcel One in Schedule A to constitute a lawfully created parcel according to the Subdivision Map Act (Section 66410, et seq., of the California Government Code) and local ordinances adopted pursuant thereto.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

CLTA Form 116.7-06 (03-09-07)

ALTA – Owner or Lender


ENDORSEMENT

Attached to Policy No. 444887

Issued by

First American Title Insurance Company

 

1. The Company insures against loss or damage sustained by the Insured in the event that, at Date of Policy,

 

  a. according to applicable zoning ordinances and amendments, the Land is not classified Zone M2(X) (General Industrial/Conditional Development District);

 

  b. the following use or uses are not allowed under that classification: general industrial and office uses, and such other uses permitted under applicable zoning ordinances under the above stated classification

 

  c. There shall be no liability under paragraph 1.b. if the use or uses are not allowed as the result of any lack of compliance with any conditions, restrictions, or requirements contained in the zoning ordinances and amendments, including but not limited to the failure to secure necessary consents or authorizations as a prerequisite to the use or uses. This paragraph 1.c. does not modify or limit the coverage provided in Covered Risk 5.

 

2. The Company further insures against loss or damage sustained by the Insured by reason of a final decree of a court of competent jurisdiction

 

  a. prohibiting the use of the Land, with any existing structure, as insured in paragraph 1.b.; or

 

  b. requiring the removal or alteration of the structure on the basis that, at Date of Policy, the zoning ordinances and amendments have been violated with respect to any of the following matters:

 

  i. Area, width, or depth of the Land as a building site for the structure

 

  ii. Floor space area of the structure

 

  iii. Setback of the structure from the property lines of the Land

 

  iv. Height of the structure, or

 

  v. Number of parking spaces.

 

3. There shall be no liability under this endorsement based on

 

  a. the invalidity of the zoning ordinances and amendments until after a final decree of a court of competent jurisdiction adjudicating the invalidity, the effect of which is to prohibit the use or uses;

 

  b. the refusal of any person to purchase, lease or lend money on the Title covered by this policy.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

American Land Title Association

Endorsement 3.1-06 (Zoning-Completed Structure)

Adopted 6/17/06


ENDORSEMENT

Attached to Policy No. 444887

Issued by

First American Title Insurance Company

The Company insures against loss or damage sustained by the Insured if, at Date of Policy, the easement identified in paragraph 7 in Schedule B, as granted by that certain Director’s Deed recorded September 12, 1994, as Series No. 94144503 of Official Records of San Mateo County, California (the “Easement”), does not provide that portion of the Land identified as Parcel 1 in Schedule A both actual vehicular and pedestrian access to and from Bayfront Expressway over and across the portion of the land as set forth in the Easement.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

American Land Title Association

Endorsement 17.1-06 (Indirect Access and Entry)

Adopted 6/17/06


ENDORSEMENT

Attached to Policy No. 444887

Issued by

First American Title Insurance Company

The Company insures against loss or damage sustained by the Insured by reason of:

 

1. those portions of the Land identified below not being assessed for real estate taxes under the listed tax identification numbers or those tax identification numbers including any additional land:

 

Parcel:    Tax Identification Numbers:
One    055-411-110
   055-411-120
   055-411-130
   055-411-140

 

2. the easements, if any, described in Schedule A being cut off or disturbed by the nonpayment of real estate taxes assessed against the servient estate.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

American Land Title Association

Endorsement 18.1-06 (Multiple Tax Parcel)

Adopted 6/17/06


ENDORSEMENT

Attached to Policy No. 444887

Issued by

First American Title Insurance Company

The Company insures against loss or damage sustained by the Insured by reason of an environmental protection lien that, at Date of Policy, is recorded in the Public Records or filed in the records of the clerk of the United States district court for the district in which the Land is located, unless the environmental protection lien is set forth as an exception in Schedule B.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

American Land Title Association

Endorsement 8.2-06 (Commercial Environmental Protection Lien)

Adopted 10/16/08


ENDORSEMENT

Attached to Policy No. 444887

Issued by

First American Title Insurance Company

The Company insures against loss or damage sustained by reason of any existing violations on the Land of the covenants, conditions and restrictions referred to in paragraph 8 of Schedule B.

As used in this endorsement, the words “covenants, conditions or restrictions” do not refer to or include any covenant, condition or restriction (a) relating to obligations of any type to perform maintenance, repair or remediation on the Land, or (b) pertaining to environmental protection of any kind or nature, including hazardous or toxic matters, conditions or substances except to the extent that a notice of a violation or alleged violation affecting the Land has been recorded in the Public Records at Date of Policy and is not excepted in Schedule B.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

CLTA Form 100.L9-06 (03-09-07)

ALTA – Owner or Lender


ENDORSEMENT

Attached to Policy NCS-444887-SC

Issued by

First American Title Insurance Company

The Company hereby assures the Insured that the Company will not deny liability under the policy or any endorsements issued therewith solely on the grounds that the policy and/or endorsement(s) were issued electronically and/or lack signatures in accordance with Paragraph 15 (c) of the Conditions.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

First American Title Insurance Company

 

BY /s/                                                                                        PRESIDENT      

 

ATTEST /s/                                                                             SECRETARY      


ENDORSEMENT

Attached to Policy No. 444887

Issued by

First American Title Insurance Company

The Company insures against loss or damage sustained by the Insured by reason of the lack of a right of access to the following utilities or services: [CHECK ALL THAT APPLY]

 

x Water service   x Natural gas service   x Telephone service
x Electrical power service   x Sanitary sewer   x Storm water drainage
¨   ¨   ¨

either over, under or upon rights-of-way or easements for the benefit of the Land because of:

 

  (1) a gap or gore between the boundaries of the Land and the rights-of-way or easements;

 

  (2) a gap between the boundaries of the rights-of-way or easements; or

 

  (3) a termination by a grantor, or its successor, of the rights-of-way or easements.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsement.

American Land Title Association

Endorsement 17.2-06 (Utility Access)

Adopted 10/16/08


ENDORSEMENT

Attached to Policy No. 444887

Issued by

First American Title Insurance Company

The policy is amended by deleting paragraph 14 of the Conditions.

This endorsement is issued as part of the policy. Except as it expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsements, (iii) extend the Date of Policy, or (iv) increase the Amount of Insurance. To the extent a provision of the policy or a previous endorsement is inconsistent with an express provision of this endorsement, this endorsement controls. Otherwise, this endorsement is subject to all of the terms and provisions of the policy and of any prior endorsements.

CLTA Form 110.1-06 (03-09-07)

ALTA – Owner or Lender


EXHIBIT E

BILL OF SALE AND ASSIGNMENT

THIS BILL OF SALE AND ASSIGNMENT (“ Bill of Sale ) is made as of                          , 20    , by                     , a                      (“ Seller ”), to                     , a                                          (“ Buyer ”).

RECITALS

A. Seller is the owner of that certain real property located in the County of San Mateo, State of California (the “ Real Property ”), as more particularly described on Exhibit A attached hereto and incorporated herein by reference.

B. Buyer and Seller have entered into that certain Purchase and Sale Agreement and Joint Escrow Instructions dated as of                  , 20     (the “ Purchase Agreement ”), with respect to, among other things, the acquisition of the “ Personal Property ” and the “ Intangible Property ” (each as defined below), and certain other property.

C. The Purchase Agreement requires Seller to convey all of Seller’s right, title and interest in, to and under the Personal Property and the Intangible Property to Buyer.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller hereby agrees as follows:

 

1. Unless the context otherwise requires, all capitalized terms used but not otherwise defined herein shall have the respective meanings provided therefor in the Purchase Agreement.

 

2. Seller does hereby unconditionally, absolutely, and irrevocably grant, bargain, sell, transfer, assign convey, set over and deliver unto Buyer all of Seller’s right, title and interest in and to:

a. all tangible personal property now or hereafter owned by Seller and located on or about the Land or Improvements or attached thereto or used in connection with the use, operation, maintenance or repair thereof (collectively, the “ Personal Property ”); and

b. all intangible property now or hereafter owned by Seller and used in connection with the Land, the Improvements or the Personal Property, or any business or businesses conducted thereon or with the use thereof, including, without limitation, the Service Contracts, building and trademarks and trade names, transferable business licenses, permits, applications, authorizations and other entitlements, transferable guarantees and warranties covering the Land and/or Improvements, all contract rights, books, records, reports, test results, environmental assessments, and other similar documents and materials relating to the use or operation, maintenance or repair of the Property or the construction or fabrication thereof, and all transferable utility contracts (collectively, the “ Intangible Property ” and, together with the Personal Property, the “ Property ”).

 

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3. Seller represents and warrants that its title to the Property is free and clear of all liens, mortgages, pledges, security interests, prior assignments and encumbrances of any nature other than the Permitted Exceptions.

 

4. Buyer hereby expressly assumes, for itself and its successors, assigns and legal representatives, the Service Contracts and all of the obligations and liabilities, fixed and contingent, of Seller thereunder accruing from and after the date hereof with respect thereto and agrees to (a) be fully bound by all of the terms, covenants, agreements, provisions, conditions, obligations and liability of Seller thereunder, which accrue from the date hereof, and (b) keep, perform and observe all of the covenants and conditions contained therein on the part of Seller to be kept, performed and observed, from and after the date hereof.

 

5. This Bill of Sale shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, legal representatives, successors and assigns.

 

6. This Bill of Sale and the legal relations of the parties hereto shall be governed by and construed and enforced in accordance with the laws of the State of California, without regard to its principles of conflicts of law.

[ Signatures on next page ]

 

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IN WITNESS WHEREOF, this Bill of Sale was made and executed as of the date first above written.

 

SELLER:    

 

  ,
    a  

 

    By:  

 

      Its:  

 

 

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EXHIBIT A

LEGAL DESCRIPTION

REAL PROPERTY IN THE CITY OF MENLO PARK, COUNTY OF SAN MATEO, STATE OF CALIFORNIA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:

PARCEL ONE:

PARCELS 1, 2, 3 & 4 AS SHOWN ON PARCEL MAP, LANDS OF BNP LEASING CORPORATION, FILED FEBRUARY 16, 1994, BOOK 67 OF PARCEL MAPS, PAGES 36 THROUGH 38 INCLUSIVE, SAN MATEO COUNTY RECORDS AND CORRECTED BY THAT CERTIFICATE OF CORRECTION RECORDED OCTOBER 12, 1994 AS DOCUMENT NO. 94-158967 OFFICIAL RECORDS, SAN MATEO COUNTY.

PARCEL TWO:

NON-EXCLUSIVE EASEMENTS FOR UTILITIES, FIRE PROTECTION WATER MAIN AND PIPES AND PRIMARY ACCESS AS GRANTED IN THAT CERTAIN EASEMENT AGREEMENT RECORDED OCTOBER 29, 1993 AS INSTRUMENT NO. 93186615, OFFICIAL RECORDS.

APN: 055-411-110, 120, 130 and 140

 

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EXHIBIT F

LITIGATION

[To be provided by Seller at the time of execution of this Agreement]

 

F-1


Schedule 4.4

Notices of Special Assessments and Condemnation

[To be provided by Seller at the time of execution of this Agreement]

 

4.4-1


 

1      AGREEMENT TO PURCHASE AND SELL; CONSIDERATION      2   
   1.1    Agreement      2   
2      PURCHASE PRICE      2   
   2.1    Deposit      2   
   2.2    Balance      2   
3      TITLE      3   
   3.1    Approved form of Title      3   
   3.2    Title Conditions      3   
      3.2.1    Taxes      3   
      3.2.2    Laws and Regulations      3   
      3.2.3    Survey Matters      3   
      3.2.4    Matters Created by Buyer, Affiliates or Property Users      3   
      3.2.5    Standard Exceptions      3   
      3.2.6    Lease      3   
   3.3    Buyer’s Review of Title      3   
   3.4    Title Exceptions Disclosed After the Execution Date      4   
   3.5    Seller’s Obligations Regarding Title      5   
   3.6    Condition of Title at Closing      6   
   3.7    BCDC Permit      6   
4      SELLER’S REPRESENTATIONS AND WARRANTIES      6   
   4.1    Authority      6   
   4.2    No Conflicts      6   
   4.3    Preferential Rights      7   
   4.4    Special Assessments or Condemnation      7   
   4.5    Service Contracts      7   
   4.6    Bankruptcy      7   
   4.7    Litigation      7   
   4.8    OFAC         7   
   4.9    Survival      7   
   4.10    Seller’s Knowledge      8   
   4.11    No Liability for Exception Matters      8   
   4.12    As-Is      9   
5      BUYER’S REPRESENTATIONS AND WARRANTIES      10   
   5.1    Authority      10   
   5.2    No Conflicts      10   
6      COVENANTS OF SELLER      11   
   6.1    Title      11   
   6.2    Buyer’s Approval of New Leases and Agreements Affecting the Property      11   
   6.3    Notice of Change in Circumstances      11   
   6.4    Exclusive Negotiations      11   
   6.5    Development Activities      11   
   6.6    Service Contracts      11   
   6.7    Insurance and Maintenance of Improvements      11   
   6.8    Litigation      12   
7      CONDITIONS PRECEDENT TO CLOSING      12   
   7.1    Buyer’s Conditions      12   
      7.1.1    Title      12   
      7.1.2    Seller’s Due Performance      12   
      7.1.3    Bankruptcy      12   

 

Page i


   7.2    Failure of Buyer’s Conditions      13   
      7.2.1    Waive and Close      13   
      7.2.2    Terminate      13   
   7.3    Seller’s Conditions      13   
      7.3.1    Buyer’s Due Performance      13   
   7.4    Failure of Seller’s Conditions      13   
8      CLOSING      13   
   8.1    Closing Date      13   
   8.2    Closing Costs      13   
      8.2.1    Seller’s Closing Costs      14   
      8.2.2    Buyer’s Closing Costs      14   
9      CLOSING DELIVERIES      14   
   9.1    Deliveries by Seller to Escrow      14   
      9.1.1    Deed      14   
      9.1.2    Non-foreign Affidavit      14   
      9.1.3    California FTB Form 593-C      14   
      9.1.4    Bill of Sale and Assignment      14   
      9.1.5    Proof of Authority      14   
      9.1.6    Assignment of Lease      14   
      9.1.7    Other      14   
   9.2    Deliveries by Buyer      15   
      9.2.1    Balance, Prorations & Closing Costs      15   
      9.2.2    Assignment of Lease      15   
      9.2.3    Other      15   
   9.3    Deliveries Outside of Escrow      15   
      9.3.1    Service Contracts      15   
      9.3.2    Intangible Property      15   
      9.3.3    Personal Property      15   
      9.3.4    Other      15   
10    PRORATIONS      15   
   10.1    Prorations      15   
   10.2    Preliminary Closing Statement      16   
11    ESCROW      16   
   11.1    Opening of Escrow      16   
   11.2    Escrow Instructions      16   
   11.3    Actions by Escrow Agent      17   
      11.3.1    Recording      17   
      11.3.2    Funds      17   
      11.3.3    Owner’s Title Policy      17   
      11.3.4    Delivery of Documents      17   
   11.4    Conflicting Demands      17   
   11.5    Real Estate Reporting Person      18   
   11.6    Destruction of Documents; Survival      18   
12    RISK OF LOSS      18   
   12.1    Condemnation      18   
   12.2    Casualty      19   
13    DEFAULT      19   
   13.1    Default by Buyer      19   
   13.2    Default by Seller      20   

 

Page ii


   13.3      21   
14    BROKERS      21   
15    CONFIDENTIALITY      21   
   15.1    Buyer      21   
   15.2    Seller      21   
16    LIMITATION ON LIABILITY      22   
17    MISCELLANEOUS PROVISIONS      22   
   17.1    Governing Law      22   
   17.2    Entire Agreement      22   
   17.3    Modifications; Waiver      22   
   17.4    Termination of Lease      23   
   17.5    Notices      23   
   17.6    Expenses      24   
   17.7    Assignment      24   
      17.7.1    Seller’s Right to Assign      24   
      17.7.2    Buyer’s Right to Assign      24   
   17.8    Severability      24   
   17.9    Successors and Assigns; Third Parties      24   
   17.10    Counterparts      24   
   17.11    Headings      25   
   17.12    Time of the Essence      25   
   17.13    Further Assistance      25   
   17.14    Number and Gender      25   
   17.15    Construction      25   
   17.16    Exhibits      25   
   17.17    Attorneys’ Fees      25   
   17.18    Business Days      25   
   17.19    Survival      25   
   17.20    Survival of Article 17      25   

LIST OF EXHIBITS

 

EXHIBIT A    Legal Description   
EXHIBIT B    Form of Grant Deed   
EXHIBIT C    Service Contracts    [To be provided by Seller]
EXHIBIT D    Proforma   
EXHIBIT E    Bill of Sale and Assignment   
EXHIBIT F    Litigation    [To be provided by Seller]
SCHEDULE 4.4    Special Assessments and Condemnation    [To be provided by Seller]

 

Page iii


EXHIBIT E – FORM OF ACKNOWLEDGEMENT AGREEMENT

attached to and made a part of the Lease bearing the

Commencement Date of February 7, 2011 between

WILSON MENLO PARK CAMPUS, LLC, a Wisconsin limited liability company, as Landlord

and

FACEBOOK, INC., a Delaware corporation, as Tenant

ACKNOWLEDGEMENT OF SUBLEASE

THIS ACKNOWLEDGMENT OF SUBLEASE (this “ Agreement ”) is entered into as of                     , 20    , by and between                      , a                      (“ Sublandlord ”) and                      , a                      (“ Subtenant ”).

RECITALS:

A. Landlord, as landlord, and Sublandlord, as tenant, are parties to that certain lease agreement with a Commencement Date of February 1, 2011 (as the same may have been amended, the “ Lease ”), pursuant to which Landlord has leased to Sublandlord certain premises located at 10, 11, 12, 14, 15, 16, 17, 18 and 19 Network Circle, Menlo Park, California (the “ Premises ”).

B. Sublandlord and Subtenant have entered into (or are about to enter into) that certain sublease agreement dated as of                      attached hereto as Exhibit A (the “ Sublease ”) pursuant to which Sublandlord has agreed to sublease to Subtenant all or a part of the Premises (the “ Sublet Premises ”).

NOW THEREFORE , in consideration of the foregoing preambles which by this reference are incorporated herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Sublandlord and Subtenant agree as follows:

1. Sublease Agreement . Sublandlord and Subtenant hereby represent that a true and complete copy of the Sublease is attached hereto and made a part hereof as Exhibit A , and Sublandlord and Subtenant agree to promptly provide Landlord with a true and correct copy of any amendments or other modifications to the Sublease.

2. Indemnity . Subtenant hereby assumes, with respect to Landlord, all of the indemnity obligations of the Sublandlord under the Lease with respect to the Sublet Premises, provided that the foregoing shall not be construed as relieving or releasing Sublandlord from any such obligations.

3. No Release . Nothing contained in the Sublease or this Agreement shall be construed as relieving or releasing Sublandlord from any of its obligations under the Lease, it being expressly understood and agreed that Sublandlord shall remain liable for such obligations notwithstanding anything contained in the Sublease or this Agreement or any subsequent assignment(s), sublease(s) or transfer(s) of the interest of the tenant under the Lease. Sublandlord shall be responsible for the collection of all rent due it from Subtenant, and for the performance of all the other terms and conditions of the Sublease, it being understood that Landlord is not a party to the Sublease and, notwithstanding anything to the contrary contained in the Sublease, is not bound by any terms, provisions, representations or warranties contained in the Sublease and is not obligated to Sublandlord or Subtenant for any of the duties and obligations contained therein.

4. Lease . The parties agree that the Sublease is subject and subordinate to the terms of the Lease. In no event shall the Sublease or this Agreement be construed as granting or conferring upon the Sublandlord or the Subtenant any greater rights than those contained in the Lease nor shall there be any diminution of the rights and privileges of the Landlord under the Lease, nor shall the Lease be deemed modified in any respect. It is hereby acknowledged and agreed that any provisions in the Sublease which limit the manner in which Sublandlord may amend the Lease are binding only upon Sublandlord and Subtenant as between such parties. Landlord shall not be bound in any manner by such provisions and may rely upon Sublandlord’s execution of any agreements amending or terminating the Lease subsequent to the date hereof notwithstanding any contrary provisions in the Sublease.

 

E -1


5. Attornment . If the Lease or Sublandlord’s right to possession thereunder terminates for any reason prior to expiration of the Sublease, Subtenant agrees, at the written election of Landlord delivered within thirty (30) days after the termination or expiration of the Lease, to attorn to Landlord upon the then executory terms and conditions of the Sublease for the remainder of the term of the Sublease. If Landlord does not timely elect to have Subtenant attorn to Landlord as described above, the Sublease and all rights of Subtenant in the Sublet Premises shall terminate upon the date of termination of the Lease or Sublandlord’s right to possession thereunder. The terms of this Section supercede any contrary provisions in the Sublease.

6. Payments Under the Sublease . If at any time Sublandlord is in default beyond applicable notice and cure periods under the terms of the Lease, Landlord shall have the right to contact Subtenant and require Subtenant to pay all rent due under the Sublease directly to Landlord until such time as Sublandlord has cured such default. Subtenant agrees to pay such sums directly to Landlord if requested by Landlord, and Sublandlord agrees that any such sums paid by Subtenant shall be deemed applied against any sums owed by Subtenant under the Sublease. Any such sums received by Landlord from Subtenant shall be received by Landlord on behalf of Sublandlord and shall be applied by Landlord to any sums past due under the Lease, in such order of priority as required under the Lease or, if the Lease is silent in such regard, then in such order of priority as Landlord deems appropriate. The receipt of such funds by Landlord shall in no manner be deemed to create a direct lease or sublease between Landlord and Subtenant.

7. Authority . Each signatory of this Agreement represents hereby that he or she has the authority to execute and deliver the same on behalf of the party hereto for which such signatory is acting.

8. OFAC . Subtenant hereby represents and warrants to Landlord that neither Subtenant, nor any persons or entities holding any legal or beneficial interest whatsoever in Subtenant, is (i) the target of any sanctions program that is established by Executive Order of the President or published by the Office of Foreign Assets Control, U.S. Department of the Treasury (“ OFAC ”); (ii) designated by the President or OFAC pursuant to the Trading with the Enemy Act, 50 U.S.C. App. § 5, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701-06, the Patriot Act, Public Law 107-56, Executive Order 13224 (September 23, 2001) or any Executive Order of the President issued pursuant to such statutes; or (iii) named on the following list that is published by OFAC: “List of Specially Designated Nationals and Blocked Persons.”

9. Third-Party Beneficiary . Sublandlord and Subtenant acknowledge and agree that this Agreement is expressly made for the benefit of Landlord and Landlord shall be a third-party beneficiary of this Agreement and Landlord shall have the right to enforce the obligations of the parties under this Agreement.

[SIGNATURES ON NEXT PAGE]

 

E -2


IN WITNESS WHEREOF , Sublandlord and Subtenant have executed this Agreement as of the date first set forth above.

 

SUBLANDLORD:

 

  , a

 

   
By:  

 

   
Name:  

 

   
Title:  

 

   
SUBTENANT:

 

  , a

 

   
By:  

 

   
Name:  

 

   
Title:  

 

   

 

E -3


EXHIBIT A – SUBLEASE AGREEMENT

attached to and made a part of the Acknowledgement of Sublease dated as of                     , 20    

between                     , a                     , as Sublandlord and                     , a

                    , as Subtenant

 

E -4


EXHIBIT F – PROJECT PROPERTY INSURANCE

attached to and made a part of the Lease bearing the

Commencement Date of February 7, 2011 between

WILSON MENLO PARK CAMPUS, LLC, a Wisconsin limited liability company, as Landlord

and

FACEBOOK, INC., a Delaware corporation, as Tenant

Property Insuranc e: All Risks of Direct Physical Loss (Special Form) to the full replacement cost (no depreciation) of the Buildings and Tenant Improvements with no deduction for depreciation; including:

 

   

Terrorism

 

   

Theft

 

   

Extra Expense

 

   

Boiler & Machinery/Equipment Breakdown

 

   

Building Ordinance

 

   

Windstorm

 

   

Sprinkler leakage, earthquake sprinkler leakage, bursting of stoppage of pipes, explosion

 

   

Owner and lender as loss payee

 

   

Deductibles not to exceed $1,000,000

 

   

Rents for 12 months

 

   

Agreed Amount Endorsement

 

   

No coinsurance allowed

 

   

Extended period of indemnity of at least 30 days

 

   

Evidence of Property Insurance (Acord 28 or Equivalent). All certificates of insurance must have assigned policy numbers.

 

   

Lender named as mortgagee

 

   

Landlord as an additional named insured

Earthquake :

 

   

With limits no less than the Probable Maximum Loss (PML) on the location

 

   

“Probable Maximum Loss” will be defined based on mutually agreed upon standards

 

   

Deductible no greater than 5% of the insured value of the Project

 

   

PML analysis conducted no less than annually to assure adequacy of limits or sub-limits

Flood : The maximum amount of Flood insurance and deductible available from the National Flood Insurance Program:

 

   

Acceptable proof of flood insurance prior to receipt of the NFIP policy, is a copy of the completed, signed, and dated application along with a copy of the annual premium check.

 

   

If coverage is included on a blanket property policy insuring more than one location, the following must be provided:

 

   

Evidence of property certificate that shows the Project location and the flood zone

 

   

Copy of the policy declarations along with the flood provisions and endorsements

 

   

Amount of flood coverage that applies exclusively to the Project, is not aggregated with other coverage, and is equal to the maximum amount of flood insurance and deductible available from the National Flood Insurance Program

Pollution Legal Liability :

 

   

Minimum limits of $10,000,000 per occurrence /$10,000,000 annual aggregate covering bodily injury and property damage liability

 

   

deductibles not to exceed $1,000,000

 

   

no carve outs or exclusions for known conditions subject to commercially available terms and conditions

 

F -1


General Terms Applicable to a Tenant Insurance Period :

Tenant shall provide to Landlord copies of policies and certificates of the foregoing insurance.

All deductibles payable under Project Property Insurance are the sole responsibility of Tenant.

Tenant shall provide Landlord prompt advance notice of any cancellation of Project Property Insurance policies. Tenant shall also endeavor to cause all such insurance policies to provide that the coverage shall not be cancelable without at least ten (10) days prior written notice to Landlord and Lender of any cancellation for nonpayment of premiums, and not less than thirty (30) days prior written notice to Landlord and Lender of any other cancellation. Lender shall be named under a Lender’s Loss Payable Endorsement (form #438BFU or equivalent) on all property insurance policies which Tenant actually maintains with respect to the Project. All insurance policies shall be issued and maintained by insurers approved to do business in the state of California and must have an A.M. Best Company financial rating and policyholder surplus of a minimum of A- VII.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

F -2

EXHIBIT 10.12

 

     [*]   

Certain confidential information

contained in this document, marked

by brackets, has been omitted and

filed separately with the Securities

and Exchange Commission

pursuant to Rule 406 of the

Securities Act of 1933, as amended.

Developer Addendum

This Developer Addendum (this “ Addendum ”) is effective as of May 14, 2010 (the “ Effective Date ”) and is made between Facebook, Inc. (“ we ” or “ us ”) and Zynga Game Network Inc. (“ you ” or “ your ”). We and you are sometimes referred to in this Addendum individually as a “ party ” and collectively as the “ parties ”. The parties hereby agree as follows:

Recitals

 

  A. We and you are parties to our then-current standard online Statement of Rights and Responsibilities (together with all referenced policies, terms and guidelines, including without limitation, the online Developer Principles and Policies and the Facebook Credits Terms, the “ SRR ”) which set forth the terms and conditions for your use of Facebook. The SRR is located at http://www.facebook.com/terms.php?ref=pf , or some other such URL designated by us in writing;

 

  B. As a high-volume user of Facebook, your use of Platform far exceeds some or all of the thresholds in Section II.11 of the Developer Principles and Policies;

 

  C. You acknowledge that supporting your use of Facebook requires significant operational, technical infrastructure, performance, employee and financial resources. Accordingly, in order to be able to continue to support your use of Facebook, we need to invest significant additional resources to help ensure the continued stability and reliability of our services.

 

  D. You wish to assist us in our effort to help us provide our users with a safe, secure, simple and efficient experience on Facebook. In furtherance of such efforts, you agree to comply with the terms of this Addendum and cooperate with us in our efforts to encourage the adoption of Facebook Credits.

 

  E. Accordingly, the parties mutually agree to the terms and conditions of this Addendum. This Addendum supplements the SRR as set forth herein.

 

  F. Capitalized terms not defined in this Addendum or its Exhibits have the meanings given to them in the SRR.

For mutual and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, we and you agree as follows:

Agreement

1. API . Subject to your continued compliance with this Addendum and the SRR, during the Term, we will provide you with access to our public APIs that we generally make available to all other developers. For purposes of clarity, nothing herein obligates us to provide you with access to any distribution channels (e.g., requests, bookmarks, streams) for any Zynga Services or Covered Zynga Services.

 

1


2. Facebook Ad Units .

a. Implementation of Facebook Ad Units . Subject to the terms herein, beginning on a date to be determined by us (the “ Facebook Ad Unit Launch Date ”) and continuing for so long as we wish to utilize Facebook Ad Units (defined below) during the remainder of the Term, you will enable us to display advertising purchased by a third party or other advertising purchased by us (“ Content ”) through an iFrame (or some other functionality or technology that is mutually agreed upon by the parties in writing) provided by us that shall appear on Zynga Game Pages (and only Zynga Game Pages) on which you decide to implement such iFrame (the “ Facebook Ad Unit ”) (all such Zynga Game Pages, “ Properties ”). We will provide you with ninety (90) days prior written notice in the event that we elect to cease serving Content through Facebook Ad Units for display on the Properties.

b. Conditions and Restrictions Relating to Facebook Ad Units . The following conditions and restrictions apply to Facebook Ad Units on Properties:

(i) Each Facebook Ad Unit you implement shall (1) appear on the right hand side of the web page of all Properties so the user is not required to scroll horizontally to see the Facebook Ad Unit, and (2) be subject to and comply with the same dimension and substantially the same position and placement requirements that we use for and apply to third party advertisements placed on Canvas Pages as of the Effective Date, as such dimension, positioning and placement requirements are depicted and described in Exhibit F . You acknowledge and agree that we will be the “executive producer” of all Facebook Ad Units. Accordingly, and subject to Section 2.b (vii) below, you agree that we will have sole control over the appearance, design, layout, look-and-feel, Content (including adding, changing or removing Content), advertisers whose Content appear within, features, and functionality of all Facebook Ad Units and the methods and means used to monetize Facebook Ad Units.

(ii) You must have and abide by an appropriate privacy policy. Your privacy policy should also include information about user options for cookie management.

(iii) You agree to comply with commercially reasonable specifications provided by us from time to time to enable proper delivery, display, tracking, and reporting of Content and to enable proper tracking and reporting of impressions, clicks and other actions taken in connection with Content.

(iv) You agree to direct to us, and not to any advertiser, any communication regarding any Content displayed in connection with Facebook Ad Units.

(v) You are solely responsible for the Properties, including all content and materials, maintenance and operation thereof and the proper implementation of our specifications. We are not responsible for anything related to Properties except for the serving of Content that appears in the Facebook Ad Units implemented on such Properties.

(vi) You will not (a) directly or indirectly generate impressions, clicks, or any other user engagement with Content through any automated, deceptive, fraudulent or other invalid means, including through repeated manual clicks, the use of robots or other automated tools or software; (b) modify or change in any way any Content; (c) use any interstitial, pop-up windows, other intermediate steps or any other technology or content which acts as a barrier to the transition of a user from any Facebook Ad Unit to any web page or other location accessed by an end user after clicking on any Content (“ Page ”); (d) remove, minimize, frame, or otherwise inhibit the full and complete display of any Page; (e) display any Content on any web page or web site that contains pornographic, hate-related, violent or illegal content; (f) redirect an end user away from any Page or provide a version of any Page that is different from the page an end user would access by going directly to the Page, intersperse any content between the Content and the Page; or otherwise provide anything other than a direct link from Content to a Page; (g) directly or indirectly access, launch, and/or activate Content through or from any software application, web site, or other means other than Properties and then only to the extent expressly permitted by this Section 2.b(vii); and (h) index, “crawl”, “spider” or in any non-transitory manner store or cache information obtained from any Content. In addition, you will not facilitate or encourage any of the foregoing. Notwithstanding

 

2


anything to the contrary herein, we acknowledge that you may offer users the option to play games that are Covered Zynga Services in full screen mode, so long as such option shall be presented to a user in a manner that is not materially more prominent than the implementation of such option on Covered Zynga Services as of the Effective Date and as reflected in Exhibit G .

(vii) You agree not to display on the same web page on which any Facebook Ad Unit or Content is displayed, any advertisement(s) or content that an end user of any Properties would reasonably confuse with one of our advertisements or otherwise associate with us (e.g., by utilizing our branding or using the same font or branding elements used in the Facebook Ad Unit).

(viii) We will not serve any advertisement (A) for any Named Entity or (B) that disparages you or (C) that contains pornographic, hate-related, violent or illegal content, or (D) that contains animation, in each case within any Facebook Ad Unit displayed on any Properties. In the event we do serve any such advertisement described in the foregoing (A) – (D), you will notify us and, as your sole and exclusive remedy, we will promptly remove the advertisement, but in no event within more than [*] following receipt of such notification. In the event that we serve any Facebook Ad Unit that causes a material degradation in or otherwise materially impedes the functionality of any of your Properties, as your sole and exclusive remedy, you will be entitled to remove the Facebook Ad Unit and you will notify us immediately of such removal. You will reinstate the removed Facebook Ad Unit within 12 hours of us notifying you that we have cured the issue giving rise to the applicable material degradation or material impediment.

(ix) We represent and warrant that, for the calendar month of April 2010, the average RPM for advertisements shown in connection with Covered Zynga Services on your Canvas Pages is [*].

(x) [*] Notwithstanding the foregoing, we may allow advertisers to choose not to place ads on your Properties or third party websites in general. You acknowledge and agree that if we offer any third party the ability to display advertising on its website as part of an official advertising network using iFrames that are larger than the Facebook Ad Unit, doing so shall not be deemed a breach of this Section 2.(x), and we agree to offer you the same larger iFrame format.

(xi) We will provide advertisement partner management support to drive advertising revenue derived from Facebook Ad Units.

(xii) You acknowledge and agree that certain Content may, when clicked upon or otherwise engaged with by a user, render or generate an overlay, pop-up, or interactive functionality (collectively, an “ Overlay ”), and you hereby agree not to block, inhibit, impede, or interfere with the rendering, performance, or use of any such Overlay. You acknowledge and agree that the rendering of an Overlay in and of itself does not constitute a material degradation in, or a material impediment of, the functionality of any of your Properties.

3. Fees.

a. Within 15 days of the end of each month of the Term you shall send us a report that (1) identifies the specific Properties on which you implemented the Facebook Ad Unit during the previous month and (2) the number of Page Views generated during the previous month of all Zynga Game Pages on which a Facebook Ad Unit was not implemented (“ Monthly Page View Count ”).

b. Each month during the Term, for all Properties on which you implemented, during the previous month, the Facebook Ad Unit, we will pay you a percentage of Net Revenue (“ Ad Share ”) arising from such Properties for the previous month. Such Ad Share will be [*]. Notwithstanding anything to the contrary in this Addendum, we shall not be liable for any payment identified by us within [*] after the date of such payment as having been based on: (a) any amounts which result from fraud, invalid queries or invalid clicks or impressions on Content generated by any person, bot, automated program or similar device, as reasonably determined by us, including without limitation through any clicks or impressions (i) originating from your IP addresses or computers under your control, (ii) solicited by payment of money,

 

   3    *Confidential Treatment Requested.


false representation, or request for end users to click on Content, or (iii) solicited by payment of money, false representation, or any illegal or otherwise invalid request for end users to complete events; (b) Content delivered to end users whose browsers have JavaScript disabled; (c) placeholder or transparent Content that we may deliver; or (d) clicks co-mingled with a significant number of invalid clicks described in (a) above, or as a result of any breach of this Addendum by you for any applicable pay period. We reserve the right to withhold payment or charge back your account due to any of the foregoing pending our reasonable investigation of any of the foregoing (provided that such investigation shall not exceed [*], or in the event that an advertiser whose Content is displayed in connection with Properties defaults on payment for such Content to us. Our records and figures, as determined by us using our tracking methodologies will be used to determine all Ad Share payments and will govern in all circumstances.

c. For each month during the Term after the Facebook Ad Unit Launch Date in which we served Content for display on the Properties, for all Zynga Game Pages on which you did not, during the previous month, implement the Facebook Ad Unit (other than as a result of the removals made pursuant to Section 2.b(viii)), you will pay us an amount equal to [*]. In no event shall the foregoing monthly payment exceed [*] for any given month. Each payment made by you pursuant to this Section 3.c will be accompanied by a detailed report verifying amounts paid and the manner in which payments were calculated. Each such report shall include such categories of data and level of detail as mutually agreed upon by the parties. Within fourteen (14) days of the date of any written request by us, you shall verify and certify in a writing signed by one of your senior executives your compliance with your payment obligations under Section 3.c. We may request any such certification no more than once each quarter during the Term.

d. Each month during the Term, you shall have the right, but not the obligation, to display Facebook Ad Units on game-related forums and game related web pages that are owned and operated by Zynga or its Affiliates that are not Zynga Game Pages. Your display of Facebook Ad Units on any other web pages that are not Zynga Game Pages shall be subject to our prior written approval on a case by case basis (which we may withhold at our sole discretion). For the sake of clarity, in the event that Facebook Ad Units are displayed on any such web pages, the provisions of Sections 2, 3.a and 3.b shall apply.

e. Each payment made by us pursuant to Section 3.b will be accompanied by a detailed report verifying amounts paid and the manner in which such amounts were calculated. Each such report shall include such categories of data and level of detail as mutually agreed upon by the parties. Within fourteen (14) days of the date of any written request by you, we shall verify and certify in a writing signed by one of our senior executives our compliance with our payment obligations under Section 3.b. You may request any such certification no more than once each quarter during the Term.

4. Implementation of Facebook Credits.

a. Implementation of Facebook Credits in Covered Zynga Services . You shall begin implementing (and you shall cause your Affiliates to begin implementing) Facebook Credits in all Covered Zynga Services commencing on the Implementation Start Date set forth in Exhibit B for each such Covered Zynga Service. You shall complete implementation (and you shall cause your Affiliates to complete implementation) of Facebook Credits in all Covered Zynga Services by no later than the Exclusivity Start Date set forth in Exhibit B for each such Covered Zynga Service. Within thirty (30) days after the Effective Date, the parties will mutually agree on a detailed written implementation plan that is consistent with the dates set forth on Exhibit B (“ Implementation Plan ”); provided, however, you acknowledge and agree that any failure by the parties to agree on the Implementation Plan will not affect or reduce any of your obligations under this Addendum including, without limitation, your obligations under Section 4.b. The Implementation Plan may only be accelerated upon mutual agreement of the parties. Notwithstanding anything to the contrary in this Addendum, you acknowledge and agree that we reserve the right to slow down the pace at which you implement Facebook Credits in any or all Covered Zynga Services by pushing back the Exclusivity Start Dates or the staging set forth in the Implementation Plan, with the understanding that the Exclusivity Start Date for each such Covered Zynga Service will be extended by the number of days by which we extend the staging of the implementation of Facebook

 

   4    *Confidential Treatment Requested.


Credits. Except as set forth in the foregoing sentence, any changes to Exhibit B must be mutually agreed upon by the parties in writing. Without limiting Section 4.b. of this Addendum, once you (or your Affiliates) begin implementing Facebook Credits in any Covered Zynga Service, you shall not (and you shall cause your Affiliates not to) remove Facebook Credits from such Covered Zynga Service unless we request otherwise in writing. Notwithstanding anything to the contrary in this Addendum, you acknowledge and agree that, no more frequently than [*] (the “ Removal Cap ”), we may request you (or any of your Affiliates) to remove Facebook Credits from, and to cease using Facebook Credits in connection with, any Covered Zynga Services at any time at our sole discretion upon written notice to you, and you shall comply with (and you shall cause your Affiliates to comply with) each such request within [*] of any such request. In the event of any request by us to remove Facebook Credits completely from any Covered Zynga Services, Section 4.b shall no longer apply to such Covered Zynga Service, and you shall be entitled to use any alternative Payment Method in place of Facebook Credits, until the date on which we instruct you in writing to once again include Facebook Credits in such Covered Zynga Service(s), which we may do at our sole discretion, at which point Section 4.b will once again apply in full force and effect to said Covered Zynga Service(s) within twenty four (24) hours of such instruction being made. Notwithstanding anything to the contrary herein, you acknowledge and agree that the Removal Cap shall not apply to any requests by us for you to remove Facebook Credits from any Covered Zynga Services for breaches or violations by you (or any of your Affiliates) of this Addendum or the SRR.

b. Facebook Credits Exclusivity for Covered Zynga Services .

(i) You acknowledge and agree that Facebook Credits will be the sole and exclusive Payment Method that is used, accepted or otherwise made available on or in connection with all Covered Zynga Services during the Term. Subject to Section 4.a, this exclusivity obligation will commence with respect to each of the Covered Zynga Services set forth in Exhibit B on the Exclusivity Start Date set forth therein and will continue for the remainder of the Term for so long as such Covered Zynga Service remains a Covered Zynga Service. For each Covered Zynga Service that is created after the Effective Date or offered or otherwise made available to any third party for the first time after the Effective Date, the exclusivity obligations set forth in this Section 4.b. will commence for such Covered Zynga Service on the date such Covered Zynga Service is first offered or otherwise made available (or some other date as mutually agreed by you and us by way of a written amendment to this Addendum) and will continue for the remainder of the Term, provided that in the event that you acquire a Covered Zynga Service from a third party (whether by merger, stock purchase, asset acquisition or otherwise), you will provide us written notice thereof, and the exclusivity obligations set forth in this Section 4.b will commence for such Covered Zynga Service on that date that is [*] after the closing date of the applicable transaction. Within fourteen (14) days of the date of any written request by us, you shall verify and certify in a writing signed by one of your senior executives your (and your Affiliates’) compliance with the terms of this Section 4.b. We may request such certification no more than once per each quarter of the Term.

(ii) Notwithstanding anything to the contrary in Section 4.b(i), the parties acknowledge and agree that Section 4.b(i) shall be subject only to the following limited exceptions set forth in this Section 4.b(ii):

 

(1) If, for any individual Covered Zynga Service, Facebook Credits cannot be used by users of such Covered Zynga Service (an “ Impacted Covered Zynga Service ”) for a period of [*] due to a technical error and such inability to use Facebook Credits is not caused by any acts or omissions of you or any of your Affiliates or the systems or technology of you or any of your Affiliates (such [*] outage a “ Facebook Credits Outage ”), as your sole and exclusive remedy, you shall notify us of the Facebook Credits Outage by sending a screenshot of the outage via email to an email address designated by us to enable us to verify the Facebook Credits Outage, and, beginning on [*] and continuing only for so long as Facebook Credits cannot be used by users of an Impacted Covered Zynga Service due to such Facebook Credits Outage, you may use any alternative Payment Method in place of Facebook Credits (a “ Substitute Payment Method ”) to complete purchases made by users within all Impacted Covered Zynga Services. You shall replace the Substitute Payment Method with Facebook Credits within [*] following your receipt of notice (email acceptable) from us that Facebook Credits is capable of being used (such notice, the “ Replacement Notice ”); provided, however, if you are unable to do so within such time period,

 

   5    *Confidential Treatment Requested.


  you will notify us (email acceptable) and you shall complete such replacement within [*] of your receipt of the Replacement Notice during normal business hours, and within [*] of your receipt of the Replacement Notice outside of normal business hours. You shall comply with the requirements set forth herein for each Facebook Credits Outage that occurs. The messaging you display or send to users related to Facebook Credits Outages shall be subject to our prior review and written approval, not to be unreasonably withheld or delayed, provided that you may display or send to users any messaging that is substantially similar to messaging already approved by us in accordance with this Section 4.b.(ii)(1) without seeking our prior review and approval. Such messaging may only be displayed to users of the Impacted Covered Zynga Service who have attempted or are attempting to make a purchase while a Facebook Credits Outage is occurring and who experience the Facebook Credits Outage.

 

(2) You may use a Payment Method that is not Facebook Credits to complete purchases made within Covered Zynga Services by users of such Covered Zynga Services that reside in any country in which we prohibit, pursuant to the SRR, residents of such country to purchase Facebook Credits from us (a “ Restricted Country ”). In the event we remove any such prohibition, without limiting Section 4.b(i), you will use Facebook Credits as the sole and exclusive Payment Method for purchases made by users of Covered Zynga Services that that reside in any Restricted Country in accordance with Section 4.b(i) above within thirty (30) days of receipt of written notice from us.

 

(3) Notwithstanding anything to the contrary in Section 4.b(i):

 

  (a) Your Gift Cards . Subject to the terms herein, we acknowledge that your distribution of Gift Cards [*] is not a violation of Section 4.b(i), provided that all Gift Cards that are redeemable on Covered Zynga Services may be redeemed only for Facebook Credits.

As used herein, “ Gift Card(s) ” mean a stored value gift card that is redeemable on Covered Zynga Services and/or Other Zynga Services.

Subject to Section 4.b(ii)(3)(d) below, to enable you to use Gift Cards as a Payment Method for Facebook Credits in Covered Zynga Services in accordance with this Section 4.b(ii)(3)(a), we will sell you Facebook Credits [*]. You shall then resell to users [*] in transactions using such Gift Cards on Covered Zynga Services. You assume all risk of loss for and shall be solely responsible for, all fraud, returns, refunds, reversals, fines, chargebacks and other such fees arising from or relating to the resale by you of Facebook Credits pursuant to this Section 4.b(ii)(3)(a) or Section 4.b(ii)(3)(b).

For the avoidance of doubt, this Section 4.b(ii)(3)(a) is not intended to and shall not preclude you from offering and redeeming Gift Cards that are redeemable only on Other Zynga Services [*].

 

  (b) Permitted Third Party Payment Options . In the event we do not offer, and only until such time as we begin to offer, Wire Transfers or any of the payment options set forth on Exhibit D hereto (“ Permitted Third Party Payment Options ”) as a Payment Method for Facebook Credits, we will allow you to offer within Covered Zynga Services such Permitted Third Party Payment Option to end users directly for the sole and exclusive purpose of enabling such end users to purchase Facebook Credits from you using such Permitted Third Party Payment Option; provided, however, you acknowledge and agree that Wire Transfers may be used solely to complete individual purchases from you of Facebook Credits that are in excess of [*].

Subject to Section 4.b(ii)(3)(d) below, if applicable, to enable you to use Permitted Third Party Payment Options as a Payment Method for Facebook Credits in Covered Zynga Services in accordance with this Section 4.b(ii)(3(a), we will sell you Facebook Credits [*] which you shall then resell to users [*] using Permitted Third Party Payment Option. We agree that we will, within a commercially practicable time period, implement and maintain

 

   6    *Confidential Treatment Requested.


a high volume mechanized process in order to implement the applicable provisions of this Section 4.b(ii)(3)(b). We acknowledge that use of Permitted Third Party Payment Options in accordance with this Section 4.b(ii)(3)(b) is not a violation of Section 4.b(i). As used herein, “ Wire Transfer ” means a same day irrevocable electronic transfer of funds between banks by electronic means.

Notwithstanding anything to the contrary herein, you acknowledge and agree that we may restrict or limit your ability to offer or use Permitted Third Party Options to the extent we reasonably believe necessary to prevent or respond to fraudulent activity or money laundering, or as required by law.

 

  (c) [*] .

 

  (d) Zynga In-Game Currency . We acknowledge and agree that (i) you are entitled to use Zynga In-Game Currency in accordance with this Addendum and all applicable laws, provided that to the extent Zynga In-Game Currency is sold or purchased in or in connection with Covered Zynga Services, such Zynga In-Game Currency must be sold and purchased via Facebook Credits and will be subject to Section 4.b(i); (ii) your continued use of Zynga In-Game Currency in Covered Zynga Services in accordance with this Addendum during the Term is not a violation of Section 4.b(i); and (iii) we will not require you to denominate items sold in Covered Zynga Services in Facebook Credits (for purposes of clarity, and subject to Section 4.b(ii), Zynga In-Game Currency used in Covered Zynga Services must be purchasable using Facebook Credits only). “ Zynga In-Game Currency ” means any currency that is developed and maintained solely by or on behalf of you and offered solely by you or any of your Affiliates. For purposes of clarity, no third party currencies will be Zynga In-Game Currencies. You acknowledge and agree that each Zynga In-Game Currency that is used in a Covered Zynga Service: (a) may not be used in any other Covered Zynga Service, with the exception of experience points that are earned only through game play and are not purchased with any Payment Method; (b) may not be converted into or redeemed for any other Zynga In-Game Currency or any other currency including, without limitation, cash, any cash equivalents, or the experience points described in (a) of this subsection; (c) may not be given by a user to another user within any Covered Zynga Services, provided that the limitation in this subsection (c) shall not apply to the winning and losing of poker chips in a poker game play or to any gift that is not deducted from the gifting user’s balance; (d) may not be used or accepted by any third party. For purposes of clarity, experience points described in Section 4.b(ii)(3)(d) of this section are subject to subsection (b), (c) and (d) of this Section 4.b(ii)(3)(d).

 

  (e) Special Provisions Related to Reselling Facebook Credits . You acknowledge and agree that: (i) you shall not resell any Facebook Credits other than those purchased from us pursuant to and resold in accordance with Sections 4.b(ii)(3)(b) or 4.b(ii)(3)(c); (ii) you must segregate all Facebook Credits that you purchase from us to resell to users from all other Facebook Credits you receive from users and redeem with us; and (iii) at our sole discretion, Facebook Credits that are resold by you may move directly from us into the applicable user’s account and may never be stored by you.

 

  (f) Co-Marketing . We acknowledge and agree that you have the right to issue up to [*] of the value of your paid Zynga In-Game Currency per Covered Zynga Service per month through advertising co-marketing relationships with third parties.

 

  (g) Payment Terms for Facebook Credits Resold by You . There will be [*] payment periods [*] for all Facebook Credits sold by you pursuant to Section 4.b(ii)(3)(a) or Section 4.b(ii)(3)(b): [*]. You will pay out to us for each period within [*] days after the end of each period.

 

   7    *Confidential Treatment Requested.


(4) The amount of the service fee described in the Facebook Credits Terms that we charge to you at any given time to redeem Facebook Credits shall be [*] 30% per each Facebook Credit redeemed [*].

 

(5) Section 4.b shall not apply to Payment Methods used, accepted or otherwise made available to sell physical goods that are not Payment Methods.

5. Other Agreements . The parties acknowledge and agree to the following:

a. Intentionally Left Blank.

b. The parties will engage in the activities described on Exhibit H regarding operational requirements that are necessary to implement Facebook Credits.

c. On a mutually agreed upon date after the Effective Date, the parties shall issue a joint press release, with the wording of such press release to be mutually agreed to by the parties in writing (the “ Press Release ”). Except as expressly set forth in this Section 5.c, neither party will make any press release regarding the terms of this Addendum without the prior written approval of the other party, provided that to the extent such disclosure is required by law, rule, regulation, or governmental or court order, the party requesting disclosure will furnish the counter-party with sufficient time to address such request with any such governmental agency and seek confidential treatment.

d. We will not [*] to the extent such efforts are permitted under the SRR in effect as of the time of collection unless any such actions are generally applicable to developers or required by law.

e. We acknowledge and agree that you are entitled to promote Other Zynga Services from within Covered Zynga Services.

f. We acknowledge and agree that the Excluded Zynga Games shall not be considered Covered Zynga Services for the purposes of this Addendum, provided that in the event that any of the following Excluded Zynga Games on [*] access or use the Facebook API, then such game shall become a Covered Zynga Service for the purposes of this Addendum: [*]

6. Operating Guidelines . Without limiting any of our rights under the SRR, in an effort to minimize the strain you place on our systems, from time to time we may, at our sole discretion, establish restrictions or operating guidelines and procedures governing your use of Facebook provided such guidelines and procedures are generally applicable to other developers (collectively, “ Operating Guidelines ”). All Operating Guidelines will be provided to you in writing, will be effective thirty (30) days after the date provided, and may be changed by us at our sole discretion upon thirty (30) days prior written notice to you. You shall comply with (and to cause your Affiliates to comply with) all Operating Guidelines, and you acknowledge and agree that a material breach by you or any of your Affiliates of any Operating Guidelines will be deemed a material breach by you of the SRR and this Addendum.

7. SRR . You acknowledge and agree that your use of or access to Facebook (including, without limitation, your use of Facebook Credits) shall be subject to the SRR and you hereby agree to comply with (and to cause your Affiliates to comply with) the SRR. This Addendum is part of and is hereby incorporated by this reference into the SRR. In the event of a conflict between the SRR and this Addendum, this Addendum shall govern to the extent of the conflict. Except as supplemented or expressly modified by this Addendum, the SRR shall remain unmodified and in full force and effect and you hereby ratify your obligations thereunder. Any changes made by us to the SRR [*]. The definition of “application(s)”, “data”, “information” and “content” in the SRR will not apply to any uses of such terms in this Addendum, and solely in this Addendum. For purposes of clarity, you acknowledge and agree that the foregoing shall not modify the meaning of such terms as they apply to the SRR or your obligations with respect to data, content, and information as defined in the SRR and pursuant to the SRR. Unless defined otherwise or noted herein, all definitions included in the SRR will apply to this Addendum. The definitions in Exhibit A shall apply to the terms of this Addendum only, and shall not modify such terms as used in and as they apply to, the SRR.

 

   8    *Confidential Treatment Requested.


8. Term; Termination .

a. This Addendum shall commence on the Effective Date and shall continue for five (5) years after the Effective Date (the “ Term ”), unless terminated earlier in accordance with this Addendum.

b. Either party may terminate (without penalty to the terminating party arising from such termination) this Addendum or the SRR upon written notice to the other party if the other party materially breaches any term of this Addendum or materially breaches or materially violates any term or provision of the SRR and such party fails to cure any such breach or violation within 30 days of receipt of written notice of such breach from the non-breaching party (such thirty (30) day period, the “ Breach Cure Period ”). You acknowledge that if any such breach or violation by you is a breach or violation of any term or provision of the SRR or Addendum relating to the storing, caching, deletion, transferring, acquiring, disclosing, selling or displaying of user data or is a violation of any term or provision of the SRR that requires you to comply with applicable laws, then we may, in addition to our termination remedy, at our sole discretion, cease providing you with access to Facebook (including, without limitation, our APIs) during the Breach Cure Period, provided that [*] in a good faith attempt to resolve the issue that gave rise to such breach, provided, further if [*], we may so notify your General Counsel via email and thereafter and immediately cease providing you with access to Facebook (including, without limitation, our APIs).

c. Within two (2) days after a party’s receipt of notice of a breach or violation described in Section 8.b the appropriate parties identified on Exhibit E will meet in person to attempt in good faith to resolve the issue that gave rise to the breach (“ Level 1 Escalation ”). If the parties are unable to resolve such issue via the Level 1 Escalation within five (5) days after such issue was referred to Level 1 Escalation, then senior executives of the parties will meet in person to attempt in good faith to resolve the issue that gave rise to the breach (“ Level 2 Escalation ”). If the parties are unable to resolve such issue via the Level 2 Escalation, then the CEOs of the parties will meet in person to attempt in good faith to resolve the issue that gave rise to the breach (“ Level 3 Escalation ”). A party may only terminate this Addendum if the parties have been unable to resolve the issue via the Level 3 Escalation within thirty (30) days of written notice of the breach. Any deletion by you (or your Affiliates) of your account (or the accounts of your Affiliates) or any disabling by you (or any of your Affiliates) of any Covered Zynga Services will not limit or affect your obligations under this Addendum.

(i) In the event that either party: (i) becomes insolvent; (ii) files a petition in bankruptcy or reorganization or has such a petition filed against it (and fails to lift any stay imposed thereby within sixty (60) days after such stay becomes effective); (iii) has a receiver appointed with respect to all or substantially all of its assets; (iv) makes an assignment for the benefit of creditors; (v) ceases to do business in the ordinary course; or (vi) takes any corporate action for your winding-up, dissolution or administration, the other party may terminate this Addendum immediately upon written notice.

d. Sections 7, 8(c), 8(e) (for the time period set forth therein), 9 and 10 shall survive the early termination or natural expiration of this Addendum. In addition to the foregoing, in the event of any termination of this Addendum or the SRR by us pursuant to this Addendum, Sections 2, 3 and 4 shall survive any such early termination for 5 years after the Effective Date if we so choose at our sole discretion, provided that in such event we will continue to provide you with access to Facebook to the extent necessary to enable performance of the obligations set forth in such Sections.

e. Transition Services . In the event of any termination by you due to a breach of this Addendum by us, and provided you are not in breach of this Addendum or in violation of the SRR, the parties shall operate under the following guidelines for no more than [*] following the effective date of such termination (the “ Transition Period ”)

(i) We shall continue to provide you with access to the APIs in accordance with this Addendum.

 

   9    *Confidential Treatment Requested.


(ii) You shall continue to abide by the terms of this Addendum.

9. Confidentiality . “ Confidential Information ” means the existence of this Addendum, the specific terms of this Addendum, any information, data, or other materials provided by one party to the other in the course of discussions and negotiations relating to this Addendum. In addition, Confidential information means any information, data or other materials provided by one party to the other under or in connection with this Addendum that is (a) clearly and conspicuously marked as “confidential” or with a similar designation; (b) is identified by the disclosing party (“ Discloser ”) as confidential and/or proprietary before, during, or promptly after presentation or communication; or (c) is disclosed in a manner which the Discloser reasonably communicated, or the receiving party (“ Recipient ”) should reasonably have understood under the circumstances that the disclosure should be treated as confidential, whether or not the specific designation “confidential” or any similar designation is used. Except with the prior written consent of the disclosing party, neither party shall (i) use or disclose any Confidential Information other than (A) to employees and contractors who have a need to know and any disclosure to contractors may only be to contractors who have signed a non-disclosure agreement to protect the confidential information of third parties, (B) the terms of this Addendum to investors or potential investors in connection with the sale of such party’s securities, including any disclosure required by state or federal securities laws, pursuant to an agreement imposing confidentiality obligations substantially similar to those set forth herein (except as prohibited or otherwise required by state or federal securities laws)or (C) the terms of this Addendum to acquirors or potential acquirors and their advisors in connection with a Change of Control of such party, pursuant to an agreement imposing confidentiality obligations substantially similar to those set forth herein or (ii) make copies or allow others to make copies of such Confidential Information except as is necessary for internal business purposes. In addition, nothing in this Agreement shall prohibit or limit either party’s use or disclosure of information (a) previously known to it without obligation of confidence (excluding, for clarity, any information, data, or other materials provided by one party to the other in the course of negotiations relating to this Agreement); (b) independently developed by or for it without use of or access to the other party’s Confidential Information; (c) acquired by it from a third party which is not under an obligation of confidence with respect to such information; (d) which is or becomes publicly available through no breach of this Addendum; or (e) is required to be disclosed by operation of law, court order or other governmental demand. Notwithstanding the foregoing provisions, any disclosure made by you to your investors as of the Effective Date, Board members, or advisors prior to the execution of this Addendum shall not be deemed to be a breach of this Section 9. The parties acknowledge and agree that the Press Release will not be deemed a breach of this Section 9.

10. General . Your obligations under this Addendum shall apply in the Territory. You will cause all of your Affiliates to comply with this Addendum, and you will be liable for any failure of any of your Affiliates to comply with this Addendum. You will not, and you will cause all of your Affiliates not to, allow or enable any third party to engage in any activity that violates, contravenes, or is inconsistent with the terms Addendum. This Addendum supersedes any other prior or collateral agreements, whether oral or written, with respect to the subject matter of this Addendum. This Addendum (including the SRR and the Exhibits attached to this Addendum) sets forth the entire understanding and agreement between the parties with respect to the subject matter of this Addendum. This Addendum may be amended only in a writing signed by both parties; provided, however, for clarity, and notwithstanding anything to the contrary in this Addendum, nothing in this Addendum restricts our right to change, modify, or amend the SRR or any aspect thereof in accordance with its terms. Capitalized terms that are not defined herein shall have the meaning assigned to them in Exhibit A. This Addendum shall be construed as if jointly drafted by the parties. The parties are entering this Agreement as independent contractors, and this Addendum will not be construed to create a partnership, joint venture or employment relationship between them. This Addendum will not be effective unless and until signed by both parties. You may not assign or otherwise transfer your rights or obligations under this Addendum without the prior written permission of us except in the event of a Change of Control where the assignee agrees to be bound by the terms of this Addendum.

 

10


IN WITNESS WHEREOF, this Addendum has been duly executed by the parties as of the Effective Date.

 

Facebook, Inc.      Zynga Game Network Inc.
BY:  

[*]

     BY:   

[*]

NAME:  

[*]

     NAME:   

[*]

TITLE:  

[*]

     TITLE:   

[*]

DATE:  

[*]

     DATE:   

[*]

 

   11    *Confidential Treatment Requested.


Exhibit A

Certain Definitions

Affiliate(s) ” means, as to a party hereto, any Downstream Affiliate(s) or any Internal Reorg Affiliate(s)

Average RPM ” means the average total ad revenue earned by us per every 1000 Page Views for advertising inventory displayed on the top twenty (20) most trafficked third party social games on which our advertising inventory appears, as calculated based on data maintained by us.

Canvas Page(s) ” means a page on www.facebook.com where the majority of the content of such page is provided by a developer.

Change of Control ” means a third party acquires, directly or indirectly, through merger, stock purchase, or otherwise: (i) beneficial ownership of more than fifty percent (50%) of the voting power of the issued and outstanding shares of you, (ii) the ability to nominate a majority of your board of directors, or (iii) all or substantially all of your assets.

Cost of Goods Sold ” means [*].

Covered Zynga Services ” means all Zynga Services where (a) such Zynga Services are accessing or using any aspect of Facebook or (b) such Zynga Services utilize, incorporate, or contain any Facebook Data.

Downstream Affiliate(s) ” means, as to any party hereto, any corporation, firm, partnership, person or other entity, whether de jure or de facto, directly or indirectly controlled by such party, where “control” means (a) beneficial ownership of greater than fifty percent (50%) of the equity interests in such entity (based on either economic ownership or voting power) or (b) the possession, directly or indirectly, of the power to independently direct or cause the direction of the management and policies of an entity, whether through the ownership of a voting equity interest, by contract or otherwise.

Exclusivity Start Date ” means the date on which the obligations in Section 4.b(i) of this Addendum begin applying to each of the Covered Zynga Services, as such dates or the process for determining such dates are set forth in Exhibit B or Section 4.b(i) of this Addendum.

Excluded Zynga Games ” mean the current (as of the Effective Date) and successor versions of the following (and only the following) games on [*], provided the successor version of any such game (i) is branded and offered under the same product name as the original version (i.e., a future successor version of [*] must be branded and offered as [*]) and (ii) uses substantially the same game play mechanics and user experience as the original version: [*].

Facebook ” means the products, services and technology we make available, including, without limitation, through (a) the website at www.facebook.com and any other Facebook branded or co-branded websites (including sub-domains, international versions, widgets, and mobile versions); (b) the Platform; and (c) other media, software (such as a toolbar), devices, or networks now existing or later developed.

Facebook Data ” means all data or information (including, without limitation, data or information received from or about Facebook Users) you or any of your Affiliates receive or received directly from or through Facebook (including, without limitation, any data or information that you or any of your Affiliates knowingly receive or received directly from a third party that received, directly, such data or information from or through Facebook), or any data or information derived therefrom (including, without limitation, data or information that can be reversed engineered to data or information that you received from or through Facebook). By way of example only, and without limitation, a friend list that originated from or through Facebook would constitute Facebook Data and your use of such friend list would result in all Zynga Services containing, incorporating, or utilizing such Facebook Data being a Covered Zynga Service. For

 

   12    *Confidential Treatment Requested.


purposes of clarity and illustration (but without limitation), the utilization, incorporation or containment of the following game-derived data for a user in a Zynga Service would not constitute Facebook Data and would not, in and of itself, cause such Zynga Service to be deemed a Covered Zynga Service: such user’s experience points with you, any of your virtual goods purchased by such user, and the game level achieved by such user in your game.

Facebook Credits ” means any of our Payment Methods we elect to make available at our sole discretion.

Facebook User ” is a human user of any aspect of Facebook.

Implementation Start Date ” means the date on which you and your Affiliates must begin implementing Facebook Credits in each of the Covered Zynga Services, as such dates are set forth in Exhibit B and may be changed in accordance with this Addendum.

Internal Reorg Affiliate(s) ” means, as to any party hereto, any Downstream Affiliate(s) of any direct or indirect parent or successor of such party (whether such parent or successor shall be a corporation, firm, partnership, person or other entity), whether de jure or de facto, that arises in connection with any reorganization of such party (whether by sale of all or substantially all of the assets, merger, consolidation or otherwise) in which (a) a majority of the members of the board of directors of such party prior to such reorganization represent a majority of the members of the board of directors of such parent or successor following the reorganization, or (b) the holders of shares or other ownership interests of such party prior to the reorganization continue to hold at least a majority of the shares or other ownership interests (based on either economic ownership or voting power) of such parent or successor following the reorganization.

Named Entity ” individually and collectively means the social game properties owned by the companies identified in Exhibit C. Once each quarter during the Term or more frequently as may be agreed by the parties, you may update the list of Named Entities in Exhibit C upon no less than fourteen (14) days prior written notice to us by adding additional companies and removing the same number of companies, such that in no event shall there be more than [*] separate Named Entities at any given time.

Net Revenue ” means revenue actually collected by us from third party advertisers (excluding our Affiliates or any of our other corporate affiliates or subsidiaries) [*], net of our Cost of Goods Sold.

Other Zynga Services ” mean all Zynga Services that are not Covered Zynga Services.

Page View ” means a request to load a web page that is seen by a user.

Payment Method ” means any solution, functionality, platform, method, wallet, item, product, checkout process, currency (either virtual or real world currency), resource, means, or mechanism (a) used to fund or process purchases of any kind or (b) used to give or receive anything of value including, but not limited to, third party funded offers.

Platform ” means a set of APIs and services that enable services and others including, without limitation, application (including, without limitation, applications or websites that use or access Platform, as well as anything else that receives data from Facebook) developers and website operators to retrieve or access data from Facebook or provide data to Facebook.

Territory ” means worldwide.

Zynga Other Page ” mean any web page that is owned and operated by you or any of your Affiliates that is not a Zynga Game Page.

Zynga Game Page ” means any web page on which a Covered Zynga Service is playable (including, without limitation, loading pages and landing pages) and that is accessible or made available on any

 

   13    *Confidential Treatment Requested.


websites that are owned and operated by you or any of your Affiliates. For the purposes of clarification, Zynga Game Pages do not include Canvas Pages or any other pages on www.faceboook.com.

Zynga Services ” means all games, game-related technology, game-related applications, and/or game-related platforms, now existing or later developed, that are made available, offered or provided by you or any of your Affiliates, either directly or indirectly through a third party (including, without limitation as part of a relationship or experience that is substantially branded or co-branded with any of your trademarks, logos or other branding elements or those of any of your Affiliates).

 

14


Exhibit B

Implementation Schedule

 

Covered Zynga Services

  

Implementation Start Date

  

Exclusivity Start Date

PetVille    Effective Date    June 30, 2010
FishVille    Effective Date    June 30, 2010
Treasure Isle    Effective Date    July 15, 2010
Café World    Effective Date    July 15, 2010
Mafia Wars    Effective Date    July 31, 2010
YoVille    Effective Date    August 15, 2010
Live Poker by Zynga    Effective Date    August 31, 2010
FarmVille    Effective Date    August 31, 2010
All other Covered Zynga Services*    Effective Date    August 31, 2010, or as set forth in Section 4.b(i) for all Covered Zynga Services that are created after the Effective Date or offered or made available for the first time after the Effective Date

 

* For purposes of clarity, for each Covered Zynga Service that is created after the Effective Date or offered or otherwise made available to any third party for the first time after the Effective Date, the Implementation Start Date shall be the same as the Exclusivity Start Date.

You shall provide us with prior written notice of any Covered Zynga Services you intend to offer or make available no later than seven (7) days prior to it being offered or otherwise made available to any third party.

 

15


Exhibit C

Named Entities

[*]

 

  16   *Confidential Treatment Requested.


Exhibit D

Permitted Third Party Payment Options

[*]

 

  17   *Confidential Treatment Requested.


Exhibit E

Escalation Personnel

For operational or business issues:

Zynga: [*]

Facebook: [*]

For technical issues:

Zynga: [*]

Facebook: [*]

In the event that either party appoints a successor to any of the above personnel, such party shall notify the other party and, upon the other party’s receipt of such notice, this Exhibit E shall be deemed amended to reflect such successor.

 

  18   *Confidential Treatment Requested.


  Exhibit F

  [*]

 

  19   *Confidential Treatment Requested.


Exhibit G

Full Screen Option Mockup

 

LOGO

 

 

20


Exhibit H

Operational Requirements

Compliance

We will become PCI Level 1 certified compliant by [*].

Fraud

The parties will work together in good faith to identify and implement procedures to (i) manage fraud issues; (ii) effect appropriate overrides of fraud triggers and velocity limits; and (iii) provide reason codes to you describing the reason for any rejections.

For the avoidance of doubt, until such time as we implement user flow for transactions that are greater than $1,000.00, you may maintain your own high value transaction flow.

Financial Reporting

Within ten (10) days after the Effective Date, you will provide [*] (“ Your Reporting Requirements ”).

We will use commercially reasonable efforts to enable the settlement of funds to multiple accounts by July 31, 2010 for all transactions occurring on or after July 1, 2010.

We will use commercially reasonable efforts to provide detailed API reporting that meets your Reporting Requirements no later than July 31, 2010 for all transactions occurring on or after July 1, 2010.

We will use commercially reasonable efforts to provide detailed flat file reporting that meets Your Reporting Requirements no later than July 31, 2010 for all transactions occurring on or after July 1, 2010.

Customer Service

The parties will work together in good faith to identify and implement procedures to offer satisfactory customer service in connection with the use of Facebook Credits on Covered Zynga Services.

Payment Terms

There will be [*] payment periods [*] for all Facebook Credits you have accepted for transactions and redeemed by you: [*]. We will pay out for each period within [*] days after the end of each period.

 

   21    *Confidential Treatment Requested.


AMENDMENT NO. 1 TO

DEVELOPER ADDENDUM

This Amendment No. 1 (this “ Amendment ”) to the Developer Addendum dated May 14, 2010, by and between Zynga Inc. (“ Zynga ”) and Facebook, Inc. (“ Facebook ”) (the “ Addendum ” and together with the Statement of Rights and Responsibilities, as amended and supplemented by the Addendum and the Developer Addendum No. 2 dated December 26, 2010, the “ Original Agreement ”), is made effective as of October 1, 2011 (“ Amendment Effective Date ”) by and between Zynga, Facebook, Zynga Game Ireland Limited, a limited company organized under the laws of Ireland, resident in Ireland and having its registered office located at 25-28 North Wall Quay, Dublin 1, Ireland (“ Zynga Ireland ”), Zynga Luxembourg S.àr.l., a Luxembourg Société Anonyme à Responsabilité Limitée having its registered office at 15, rue Edward Steichen, L-2540 Luxembourg (“ Commissionaire ”) (solely to the extent set forth on the signature page hereto) and Facebook Ireland Limited, a limited company organized under the laws of Ireland, resident in Ireland and having its principal place of business at Hanover Reach, 5-7 Hanover Quay, Dublin 2, Ireland (“ Facebook Ireland ”). Zynga, Facebook, Zynga Ireland, Commissionaire (solely to the extent set forth on the signature page hereto) and Facebook Ireland are each a Party and together Parties under this Amendment. Capitalized terms used and not otherwise defined herein shall have the meanings given such terms in the Original Agreement to the extent defined therein.

W HEREAS Zynga’s Affiliates (as defined in the Addendum), including Zynga Ireland and Commissionaire, are bound by the terms of the Addendum;

W HEREAS Zynga and Facebook now wish to amend the Addendum to specifically add Zynga Ireland, Commissionaire (solely to the extent set forth on the signature page hereto) and Facebook Ireland as parties to the Addendum;

W HEREAS outside of the United States players enter into transactions with Zynga Ireland and within the United States players enter into transactions with Zynga;

W HEREAS the Parties further wish to specify that with respect to transactions entered into with players by Zynga Ireland, any related transactions will be transacted between Zynga Ireland and Facebook Ireland;

W HEREAS Zynga and Zynga Ireland have authorized and designated the Commissionaire to be responsible for the collection and receipt of payments due to Zynga Ireland and wish all revenue payments owed by Facebook Ireland to Zynga Ireland be remitted to Commissionaire;

N OW , T HEREFORE , in consideration of the mutual promises and assurances contained in the Original Agreement and this Amendment, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

  1. Zynga Ireland, Commissionaire (solely to the extent set forth on the signature page hereto) and Facebook Ireland are hereby added as parties to the Addendum.

 

  2. Any transactions as described in the Addendum and this Amendment arising from transactions entered into by Zynga Ireland shall be transacted between Facebook Ireland and Zynga Ireland. For clarity, any such transactions entered into by Zynga shall be transacted between Facebook and Zynga.

 

  3. Facebook Ireland shall remit any and all revenue payments due to Zynga Ireland to Commissionaire as directed by Zynga or Zynga Ireland. The determination of these amounts will be based on a process mutually agreeable to the Parties.

 

22


  4. Notices to Zynga Ireland, the Commissionaire and Facebook Ireland shall be sent to:

If to Facebook Ireland:

Hanover Reach, 5-7 Hanover Quay

Dublin 2, Ireland Attn: Shane Crehan

email: shanecrehan@fb.com

If to Zynga Ireland or Commissionaire:

Zynga Game Ireland Limited

25-28 North Wall Quay

Dublin 1, Ireland

Attn: Managing Director

Zynga Luxembourg S.àr.l.

15, rue Edward Steichen

L-2540 Luxembourg

Attn: Managing Director

With copies to:

Zynga Inc.

699 8 th Street

San Francisco, CA 94103

USA

Attn: Sundeep Jain

cc: Office of General Counsel

email: legalnotices@zynga.com

fax: +1-415-358-5665

 

  5. This Amendment together with the Original Agreement constitute the entire agreement of the parties with respect to the matters set forth herein and there are no other agreements, commitments or understandings among the parties with respect to the matters set forth herein. Nothing in this Amendment shall amend the terms and conditions of Developer Addendum No. 2, and all terms and conditions of the Original Agreement not expressly amended herein shall remain in full force and effect. The terms and conditions of this Amendment shall prevail over any conflicting terms and conditions in the Original Agreement.

Signature Page Follows

 

23


The parties hereto have entered into this Amendment as of the Amendment Effective Date by their duly authorized representatives.

 

ZYNGA INC:         FACEBOOK, INC.:
By:   

/s/ Dave Wehner

      By:   

 

Name:   

Dave Wehner

      Name:   

 

Title:   

CFO

      Title:   

 

Date:   

October 7, 2011

      Date:   

 

ZYNGA GAME IRELAND LTD:       FACEBOOK IRELAND LTD:
By:   

 

      By:   

/s/ Shane Crehan

Name:   

 

      Name:   

Shane Crehan

Title:   

 

      Title:   

Director Finance

Date:   

 

      Date:   

13/10/11

Accepted, acknowledged and agreed solely as to the right to receive all payments owed to Zynga Ireland as set forth in this Amendment and for no other purpose:         
Zynga Luxembourg S.àr.l.         
By:   

 

        
Name:   

 

        
Title:   

 

        
Date:   

 

        

 

24


The parties hereto have entered into this Amendment as of the Amendment Effective Date by their duly authorized representatives.

 

ZYNGA INC:         FACEBOOK, INC.:
By:  

/s/ Dave Wehner

      By:   

/s/ Dan Rose

Name:  

Dave Wehner

      Name:   

Dan Rose

Title:  

CFO

      Title:   

VP Partnerships and Platform Marketing

Date:  

October 7, 2011

      Date:   

13/10/11

ZYNGA GAME IRELAND LTD:       FACEBOOK IRELAND LTD:
By:  

 

      By:   

/s/ Shane Crehan

Name:  

 

      Name:   

Shane Crehan

Title:  

 

      Title:   

Director Finance

Date:  

 

      Date:   

13/10/11

Accepted, acknowledged and agreed solely as to the right to receive all payments owed to Zynga Ireland as set forth in this Amendment and for no other purpose:         
Zynga Luxembourg S.àr.l.         
By:  

 

        
Name:  

 

        
Title:  

 

        
Date:  

 

        

 

25


The parties hereto have entered into this Amendment as of the Amendment Effective Date by their duly authorized representatives.

 

ZYNGA INC:       FACEBOOK, INC.:

By:

  

 

      By:   

 

Name:

  

 

      Name:   

 

Title:

  

 

      Title:   

 

Date:

  

 

      Date:   

 

ZYNGA GAME IRELAND LTD:       FACEBOOK IRELAND LTD:

By:

  

/s/ Ana Fitzpatrick

      By:   

 

Name:

  

Ana Fitzpatrick

      Name:   

 

Title:

  

Director

      Title:   

 

Date:

  

7/10/11

      Date:   

 

 

Accepted, acknowledged and agreed solely as to the right to receive all payments owed to Zynga Ireland as set forth in this Amendment and for no other purpose:

  

 

Zynga Luxembourg S.àr.l.         

By:

  

 

           

Name:

  

 

           

Title:

  

 

           

Date:

  

 

           

 

26


The parties hereto have entered into this Amendment as of the Amendment Effective Date by their duly authorized representatives.

 

ZYNGA INC:       FACEBOOK, INC.:

By:

  

 

      By:   

 

Name:

  

 

      Name:   

 

Title:

  

 

      Title:   

 

Date:

  

 

      Date:   

 

ZYNGA GAME IRELAND LTD:       FACEBOOK IRELAND LTD:

By:

  

 

      By:   

 

Name:

  

 

      Name:   

 

Title:

  

 

      Title:   

 

Date:

  

 

      Date:   

 

 

Accepted, acknowledged and agreed solely as to the right to receive all payments owed to Zynga Ireland as set forth in this Amendment and for no other purpose:

 

 

Zynga Luxembourg S.àr.l.         

By:

  

/s/ Alberto Fasanotti

        

Name:

  

Alberto Fasanotti

        

Title:

  

Director

        

Date:

  

10/7/11

        

 

27

EXHIBIT 10.13

 

      [*]   

Certain confidential information

contained in this document,

marked by brackets, has been

omitted and filed separately with

the Securities and Exchange

Commission pursuant to Rule 406

of the Securities Act of 1933, as

amended.

Developer Addendum No. 2

This Developer Addendum No. 2 (this “ Addendum No. 2 ”) is effective as of December 26, 2010 (the “ Addendum No. 2 Effective Date ”), and is made by and between Facebook, Inc. and Facebook Ireland Limited (collectively, “ FB ”, “ we ”, “ us ” or “ our ”) and Zynga Inc. (“ Zynga ”, “ you ” or “ your ”). We and you are sometimes referred to in this Addendum No. 2 individually as a “party” or collectively as the “parties”.

Recitals

A. FB and Zynga are parties to the Statement of Rights and Responsibilities (together with all referenced policies, terms and guidelines, including without limitation, the online Facebook Platform Policies, the “ SRR ”) which set forth the terms and conditions for Zynga’s use of the Facebook Service. The SRR is incorporated herein by this reference and the current version is attached hereto as Annex 1 .

B. Facebook, Inc. and Zynga previously entered into that certain Developer Addendum effective as of May 14, 2010 (the “ Addendum No. 1 ”) which supplemented the SRR with certain additional terms and conditions as set forth therein. For clarity, references to “ Agreement ” include the SRR, as supplemented by Addendum No. 1.

C. The parties acknowledge that FB desires to enable Zynga to build the Zynga Platform on top of the Facebook Platform, and the parties desire to, amongst other goals set forth herein, work together to increase the number of users of each party’s products and services. [*] The parties further acknowledge that Zynga is making a significant commitment to the Facebook Platform (i.e., using Facebook as the exclusive Social Platform on the Zynga Properties and granting FB certain title exclusivities to Zynga games on the Facebook Platform). In exchange for such commitment, [*] the parties have committed to set certain growth targets for monthly unique users of Covered Zynga Games.

D. The parties now wish to enter into this Addendum No. 2 to further supplement the SRR with certain additional terms and conditions as set forth herein.

E. Unless otherwise designated herein, all defined terms used in this Addendum No. 2 are set forth in Exhibit A .

For mutual and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, the parties hereby agree as follows:

Agreement

 

1. Use of Terms; Conflicts; Changes to the SRR .

 

  1.1 The lower case definitions of the defined terms in the SRR shall not apply to this Addendum No. 2 as such defined terms are used in this Addendum No. 2; however, all defined terms in the SRR shall continue to apply to the SRR.

 

  1.2 In the event of any conflict between the terms and conditions of the Agreement and the terms and conditions of this Addendum No. 2, the terms of this Addendum No. 2 shall control to the extent of the conflict.

 

   1    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

  1.3 Except as expressly set forth in this Section 1.3, no amendment or modification of the Agreement or this Addendum No. 2 will be binding without the written agreement of both parties. Notwithstanding the foregoing, nothing herein shall restrict FB from making any changes to its online Facebook Platform Policies (including any policies and guidelines referenced therein or in the SRR) and any such changes shall apply to Zynga without Zynga’s written consent; provided, however, that [*], Zynga may invoke the Escalation Process, in which case [*]. In addition, if FB determines, in its reasonable discretion, that a change to the SRR is needed in order to protect the integrity or security of the Facebook Platform, user security or user privacy, or to protect FB from material legal liability (“ Urgent Change ”), FB may make such Urgent Change and it will notify Zynga, which notice may be sent via email to Zynga’s Designated Manager. Except as expressly set forth herein, [*]. Zynga will not be in breach of the Agreement or this Addendum No. 2 with respect to (a) any failure to comply with any such [*] until at least [*] after its receipt of such notice; (b) any Covered Zynga Game or Zynga Property that Zynga discontinues and that ceases to access the Facebook Platform within [*] after its receipt of such notice; provided, however, that if Zynga determines, in its reasonable discretion, that any such Urgent Changes have a material negative impact on any Covered Zynga Game or a Zynga Property, and Zynga invokes the Escalation Process within [*] after Zynga’s receipt of such notice, Zynga will not be in breach of the Agreement or this Addendum No. 2 with respect to any such impacted Covered Zynga Games or Zynga Properties that Zynga discontinues or brings into compliance with such [*] within [*] following Zynga’s receipt of such notice.

 

2. Target Growth Schedule . During the Term, FB and Zynga desire to increase the number of Zynga MUUs to [*] over [*] at a linear weekly growth rate as set forth on Exhibit B1 attached hereto (“ Web Target Growth Schedule ”) and to increase the number of Mobile MUUs to [*] over [*] as set forth on Exhibit B2 attached hereto (“ Mobile Target Growth Schedule ”).

 

  2.1 Within 15 days following the end of each three month period designated in the Web Target Growth Schedule as a quarter (e.g. Q1, Q2, Q3, etc.) (each, a “ Quarterly Period ”), Zynga will provide FB with a report detailing the number of MUUs for the immediately preceding Quarterly Period. In the event FB disagrees with such numbers by [*], the parties shall use the Escalation Process to determine whether the parties have met, missed or exceeded the “Target MUU” number specified in the Web Target Growth Schedule for the applicable Quarterly Period or the Mobile Target Growth Schedule, as applicable. No later than thirty (30) days following the end of each Quarterly Period, the Designated Managers shall meet in person to review the MUUs for the preceding Quarterly Period and review the overall health of the parties’ relationship.

 

  2.2 (a) In the event Zynga acquires a Social Game from a third party (whether by merger, stock purchase, asset acquisition or otherwise) during the Term that operates only on the Facebook Platform (“ Acquired Covered Zynga Game ”) or that operates on both the Facebook Platform and any other Social Platform(s), Zynga shall provide FB, within [*] following the closing date of such acquisition, with written notice of the acquisition and the number of MUUs of such Social Game (“ Acquisition Notice ”). Either as part of such written notice or thereafter, but in no case more than [*] following the closing date of any acquisition, Zynga shall also provide FB with an accurate list of all Facebook User IDs for users that have at any time before any acquisition granted permission (implicitly or explicitly) for the Acquired Covered Zynga Game to access their basic information, but that have never granted such permission (implicitly or explicitly) for any other Covered Zynga Game (“ Acquired Users ”).

(b) This Section 2.2(b) shall apply to Acquired Users who are using an Acquired Covered Zynga Game. During the Term, [*] Acquired Users (whether from a single transaction or series of transactions) acquired in any single calendar year shall not be included in the calculation of MUUs in any Quarterly Period (“Excluded Users”). Except for Excluded

 

   2    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

Users, if an Acquired User later grants such permission to another Covered Zynga Game, then such Acquired User will be included in the calculation of MUUs for the applicable Quarterly Period for the purposes of the Web Target Growth Schedule. MUUs (excluding Acquired Users and Excluded Users) of Acquired Covered Zynga Games shall be included in the MUU calculation for the Quarterly Period in which the acquisition of such game closed. For the avoidance of doubt, Acquired Users who do not grant permission (implicitly or explicitly) to another Covered Zynga Game shall not be included in the calculation of MUUs in any Quarterly Period. In the event FB disagrees with any numbers in an Acquisition Notice by [*], the parties shall use the Escalation Process to reconcile the number of users that will be included in the calculation of MUUs for the applicable Quarterly Period for the purposes of the Web Target Growth Schedule.

(c) This Section 2.2(c) shall apply to Acquired Users who are using an Acquired Zynga Mobile Game. [*] Mobile Acquired Users (“Excluded Mobile Users”), whether from a single acquisition or a series of acquisitions (including Mobile Acquired Users of the Words with Friends game acquired as a result of the acquisition of Newtoy, Inc. prior to the Addendum 2 Effective Date), shall not be included in the calculation of Mobile MUUs for the purposes of the Mobile Target Growth Schedule. Except for Excluded Mobile Users, if a Mobile Acquired User later grants permission (implicitly or explicitly) for another Zynga Mobile Game to access its basic information, then such Mobile Acquired User will be included in the calculation of Mobile MUUs for purposes of the Mobile Target Growth Schedule. In the event FB disagrees with any user numbers by [*], the parties shall use the Escalation Process to reconcile the number of users that will be included in the calculation of Mobile MUUs for the purposes of the Mobile Target Growth Schedule.

 

  2.3 In the territories mutually agreed in writing by the parties (if any), FB will pre-install a bookmark linking to [*] in the bookmark section of the Facebook Site, provided that Zynga confirms in writing that [*] will not be enabled, offered, displayed, distributed and/or otherwise made available on, in, by, or through any other Social Platform in such mutually agreed territories for a period of [*] following the date on which such bookmark is pre-installed on the Facebook Site. After the bookmark has been initially pre-installed, the subsequent location of such bookmark for a given Facebook User will be determined in accordance with FB’s general practices.

 

  2.4 Failure to meet any of the “Target MUU” numbers set forth in the Target Growth Schedule [*], and (except for each party’s termination right set forth in Section 3.1.1 and Section 3.1.2) [*].

 

3. Exclusivity .

 

  3.1 Throughout the Term, the Facebook Platform will be integrated into the Zynga Mobile Games and Zynga Properties and FB will be the sole and exclusive Social Platform that [*] (“ Platform Exclusivity ”). For the avoidance of doubt, the parties acknowledge and agree that this Section 3.1 does not prohibit Zynga from developing a platform on top of the Facebook Platform provided that such platform complies with the requirements set forth on Exhibit G (“ Zynga Platform ”). Zynga shall not be in breach of this Section 3.1 if Zynga Users utilize the Zynga Platform to perform actions in connection with the Covered Zynga Games or the Zynga Properties that are not required to use the Facebook Platform as described in more detail in this Addendum No. 2 and on Exhibit G .

 

  3.1.1 If, at the end of the [*] Quarterly Period set forth in the Web Target Growth Schedule, the number of MUUs (subject to the calculations set forth in Section 2) does not meet or exceed the [*] Target Growth number specified in the Web Target Growth Schedule, either party may elect to terminate this Addendum No. 2 upon written notice to the other party prior to [*].

 

   3    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

  3.1.2 If, at the end of the [*] Quarterly Period set forth in the Mobile Target Growth Schedule, the number of Mobile MUUs (subject to the calculations set forth in Section 2.2) does not meet or exceed the [*] Mobile Target Growth number specified in the Mobile Target Growth Schedule, either party may elect to terminate this Addendum No. 2 upon written notice to the other party prior to [*].

 

  3.2 Subject to subsection 3.2.1 below, any Covered Zynga Game or Substantially Similar Game that is first offered and/or otherwise made available during the Term will not [*] (“ Title Exclusivity ”) for a period of [*] following the date such Covered Zynga Game is first offered or otherwise made available. For the purposes of clarity, “Covered Zynga Game”, as used in this Section 3.2, shall not include Zynga Mobile Games (which, for the avoidance of doubt, are subject to Platform Exclusivity per Section 3.1).

 

  3.2.1 If, at the end of [*] and each Quarterly Period thereafter set forth in the Web Target Growth Schedule, (a) the number of MUUs (subject to the calculations set forth in Section 2) meets or exceeds the Target Growth Ceiling for such Quarterly Period set forth in the Web Target Growth Schedule, the period of Title Exclusivity will [*]; or (b) the number of MUUs (subject to the calculations set forth in Section 2) does not meet the Target Growth Floor number for the applicable Quarterly Period set forth in the Web Target Growth Schedule, the period of Title Exclusivity will [*]. Any change to the Title Exclusivity period shall take effect on the first day of the next Quarterly Period and any such new exclusivity period shall apply to all Covered Zynga Games first offered and/or otherwise made available in the next Quarterly Period.

 

  3.2.2 FB shall provide Zynga with written notice if it reasonably believes that Zynga has violated any of the provisions set forth in Section 3.2 and Zynga will not be in breach of this Addendum No. 2 with respect to any acts, omissions, terms, or agreements that it modifies or corrects to remain compliant with Section 3.2 within [*] after its receipt of such notice.

 

  3.3 Neither any non-Covered Zynga Game that Zynga first offers or otherwise makes available on any other Social Platform during the Term nor any Eligible Zynga Mobile Game shall use or access the Facebook Service without FB’s prior written approval.

 

  3.4 FB shall not offer or otherwise make available on the Facebook Site or the Facebook Platform any Facebook Game. Zynga may terminate this Addendum No. 2 if, at any time during the Term, FB offers or otherwise makes a Facebook Game available on the Facebook Site or the Facebook Platform (except for non-production servers and other internal development and beta testing environments); provided, however, that Zynga will provide FB with notice if it reasonably believes FB is in breach of this Section 3.4, and FB will not be in breach of this Addendum No. 2 if it ceases to distribute such Facebook Game within fourteen (14) days after receipt of such notice.

 

  3.5 Section 4.b.(ii)(3)(c) of the Addendum is hereby deleted in its entirety and replaced as follows:

“(c) [*].

(A) We acknowledge that [*] as a Payment Method for purchases from you by users within the Covered Zynga Services [*] is not a violation of Section 4.(b)(i) of the Addendum. As used herein, “[*]” means [*].

(B) Notwithstanding anything to the contrary set forth in Section 4.(b)(i) of Addendum No. 1, you may opt not to use Facebook Credits as a Payment Method (and [*] use the

 

   4    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

Payment Method of [*]) for purchases from you by users within the Covered Zynga Services [*], so long as (1) [*], or (2) [*]. The foregoing exception shall no longer be valid if you: (x) agree upon any terms [*] related to Payment Methods that circumvent, intentionally or otherwise, your obligation to use Facebook Credits as set forth in Addendum No. 1 or that ensure you are able to satisfy one of the exceptions set forth in subsections (1)-(3) above, or (y) encourage, promote or otherwise incentivize users to use Payment Methods other than Facebook Credits (including, but not limited to, making available better offers or special incentives [*] as compared to the offers or incentives made available on the Covered Zynga Services offering Facebook Credits). As used herein, “[*]” means any [*] that are owned or operated [*] and that power/support [*]. For the avoidance of doubt, [*] shall not include [*] running on or powering/supporting [*], including but not limited to, [*], irrespective of whether such other [*]). Notwithstanding anything to the contrary set forth herein, the exception to using Facebook Credits set forth in this section shall in no event apply to web pages, web sites and/or HTML 5 applications.”

 

  3.6 Exceptions .

 

  3.6.1 Notwithstanding anything to the contrary set forth in Section 3.1, this Addendum No. 2 shall not apply to Zynga’s activities [*]; provided, however, that Zynga shall not, without FB’s prior written consent: (i) incorporate the Facebook Platform into any versions of the Zynga Properties [*]; or (ii) access or otherwise use the Facebook Service [*] in connection with Zynga’s games, websites or other properties.

 

  3.6.2 (a) Notwithstanding anything to the contrary set forth in Section 3.1, Zynga may use (i) [*] APIs solely in connection with up to [*] Eligible Zynga Mobile Games; (ii) [*] APIs solely in connection with up to [*] Eligible Zynga Mobile Games; and (iii) [*] APIs solely in connection with up to [*] Eligible Zynga Mobile Games. As used herein, “ Eligible Zynga Mobile Game ” means a Zynga Mobile Game that is a companion to a non-Covered Zynga Game or a Covered Zynga Game (excluding Zynga Mobile Games) that is not subject to Title Exclusivity and that is launched on a third party Social Platform at or before the time the Eligible Zynga Mobile Game uses the third party’s Mobile Platform APIs. Zynga will provide FB with written notice if it offers or otherwise makes available an Eligible Zynga Mobile Game and such notice shall be delivered via email to FB’s Designated Manager within no more than fifteen (15) days following the availability of any such Eligible Zynga Mobile Game.

(b) Notwithstanding anything to the contrary set forth in this Addendum No. 2, Zynga may offer or otherwise make available Solo Zynga Mobile Games. As used herein, “ Solo Zynga Mobile Game ” means a non-Zynga Mobile Game offered or otherwise made available on a Mobile Platform that has no user account (i.e. the user is not prompted to log-in or otherwise enter any identifying information, including username, email address, password, demographic information, etc.) and does not allow users to establish connections, interact and/or collaborate with other users.

 

  3.6.3 Notwithstanding anything to the contrary set forth in Section 3.1 and without limiting Section 3.6.2, Zynga may use third party Mobile Platform APIs solely to enable the actions/functionality set forth in subsections (a) – (d) below and solely in connection with Zynga Mobile Games; [*]: (a) push notifications, (b) sending Stories or posting game scores to a game center hosted on a third party Mobile Platform API (provided that such Stories link back to the Zynga Mobile Game that was the subject of the Story), (c) integrate with and/or access hardware features of the phone (e.g., camera, accelerometer); and (d) pull contact data from the

 

   5    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

  native local address book application on a phone, provided that Zynga delivers to FB (using the Game Friends Protocol) any such contact data it uses or collects. Prior to sending such contact data to FB, Zynga will notify and obtain clear, conspicuous and express consent from Facebook Users. In no case may Zynga use such Mobile Platform APIs to link user identities to one another, populate game friends data on a social graph other than FB’s social graph, or link gameboard(s) to user IDs.

 

  3.6.4 Section 3.2 and FB’s obligations hereunder shall not apply at the time of Zynga’s acquisition of such game to a Social Game (which Social Game, for the avoidance of doubt, excludes any property, or game or property operating on a Mobile Platform) that Zynga acquires during the Term that operates both on the Facebook Platform and any other Social Platform(s); provided, however, that Zynga shall use commercially reasonable efforts to ensure that at the end of ninety (90) days following the closing of such acquisition, no user of such game shall be permitted to utilize both the Facebook Platform and any other Social Platform, and provided further that in no event shall any user of such game be permitted to use both the Facebook Platform and any other Social Platform at the end of the one hundred-eighty (180) day period following the closing date of such acquisition. For the purposes of clarity, once any such game utilizes only the Facebook Platform, Section 3.2 and FB’s obligations hereunder shall apply to such game.

 

  3.6.5 Section 3.2 of this Addendum No. 2 shall not apply to the Words with Friends game and shall not apply to any existing Covered Zynga Games offered by Zynga as of the Addendum No. 2 Effective Date and any successor versions thereof, provided that such successor version (i) is branded and offered under a substantially similar product name as the original version (i.e., a future successor version of “Taxiville” is branded and offered as “Taxiville 2” or “Taxiville: Limited Addition or KingTaxi”); and (ii) uses substantially the same game play mechanics and user experience as the original version.

 

4. Integration on Zynga Properties .

 

  4.1 Registration .

 

  4.1.1 All Zynga Users must have a valid (e.g. real; not suspended) FB account. Zynga will require all Zynga Users to connect their Zynga account to their FB account. In addition, Zynga will require all Zynga Users to be logged-in to their FB account with an active session to use or access any Covered Zynga Game, Zynga Mobile Game or any Zynga Property, except: (a) during the Registration Flow; or (b) in a non-social portion of a Zynga Property that (i) does not involve a Covered Zynga Game and (ii) that is not required to use the Facebook Platform per this Addendum No. 2, or (iii) is related solely to corporate or charitable information or to help and support forums, including but not limited to, blogs, documentation or FAQs. For the avoidance of doubt, if a Zynga User does not connect their Zynga account with their FB account and/or is not logged-in to their FB account with an active session, such user will not be able to use or access any Covered Zynga Games.

 

  4.1.2 Zynga Users who are not Facebook Users must create a FB account. Zynga will implement the FB-provided APIs to create a registration flow, as described in more detail on Exhibit F (“ Registration Flow ”). FB and Zynga (as described in Section 4.1.3 below) will be the only mechanism by which Zynga Users can register for, authenticate or log into their Zynga account, or otherwise access the Zynga Properties.

 

6


Facebook/Zynga Confidential Information

 

  4.1.3 Without limiting the FB account creation and log-in requirements set forth in this Section 4.1 and on Exhibit F , Zynga may require Zynga Users to create a Zynga username and password (“ Zynga Credentials ”) on the Zynga Properties. For the avoidance of doubt, Zynga may not prompt any users on the Facebook Site to create, log-in with, register for or otherwise use Zynga Credentials on the Facebook Site.

 

  4.1.4 If Zynga implements Instant Personalization on the Zynga Properties, Zynga may use the Instant Personalization product in accordance with Section 4.6 and Exhibit H of this Addendum No. 2 to enable a single authentication experience for Zynga Users of Covered Zynga Games.

 

  4.1.5 [*]. “ Single Sign On (SSO) ” means an authentication method that permits a Facebook User that is logged-in to the Facebook Service with an active session through the most current version of a Facebook mobile application to authenticate their basic user information to a Zynga Mobile Game with a single-click of a dialog. For the purposes of clarity, SSO will not be deemed unavailable for the purposes of this Section if a Facebook User (a) does not have a Facebook mobile application on one of the SSO Mobile Platforms, (b) is not logged-in to a Facebook mobile application with an active session, or (c) does not have an Internet connection. SSO Mobile Platforms are Apple’s iPhone operating system and Google’s Android Mobile Platform (“ SSO Mobile Platform ”). As used herein, “ Trial Use ” means that Zynga may allow Zynga Users of Zynga Mobile Games to find and/or invite friends through the phone’s local address book, email, or phone number and play with friends [*]. Notwithstanding anything to the contrary in this Section, Zynga does not have to require registration for an active Game Session in which a Zynga User exclusively connects to random people (i.e., non-friends) or chooses to play against a non-human computer player. “ Game Session ” means the period of time during which a Zynga User of a Zynga Mobile Game is continuously playing such game, but in no case more than twenty-four (24) hours.

 

  4.1.6 Solely with respect to (a) users of the [*] game existing as of the Addendum No. 2 Effective Date, Zynga shall implement the requirements of this Section 4.1 no later than [*]; (b) new users of the [*] game, Zynga shall implement the requirements of this Section 4.1 no later than [*]; and (c) existing Zynga Social Games that have less than [*] monthly active users (“ MAUs ”) as of the Addendum No. 2 Effective Date (except as set forth below), Zynga shall use diligent efforts to implement the requirements of this Section 4.1, but will in no case implement such requirements later than [*]. For so long as (x) the “[*]” and “[*]” Zynga Social Games have less than [*] MAUs, and (y) the “[*]” and “[*]” Zynga Social Games have less than [*] MAUs, Zynga shall not have to implement the requirements set forth in Sections 4.1.1 and 4.1.2; provided, however, that as soon as any one of such games has, (in the case of “[*]” or “[*]”) [*] or more MAUs, or (in the case of “[*]” or “[*]”) [*] or more MAUs, Zynga shall implement the requirements of this Section 4.1 for any such game within [*] following the date in which such game met or exceeded the applicable MAU threshold set forth in subsections (x) and (y) above.

 

  4.1.7 FB will use commercially reasonable efforts to implement a solution by the end of [*] (designated in the target Growth Schedule) that [*]. If, by the end of [*] (designated in the target Growth Schedule), FB has not implemented such a solution, the parties will work together in good faith for a period of thirty (30) days to mutually agree upon an alternative approach that addresses [*]. If FB does not implement a solution as described above and the parties are unable to agree upon an alternative approach during the thirty (30) day period, (a) except as

 

   7    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

  otherwise expressly set forth in this Section, Zynga’s sole remedy under this Section shall be to invoke the Escalation Process, and (b) Zynga shall be entitled to launch its own website(s) [*] to play Zynga games, provided that such website(s) and such games shall (i) [*]; and (ii) not use or access any other Social Platform, the Facebook Platform, the Zynga Platform (including, for the avoidance of doubt, Zynga’s account system(s)), or other Zynga Properties, or utilize, incorporate, receive or contain any Facebook User Data. If Zynga acquires a game (which game, for the avoidance of doubt, includes any property, or game or property operating on a Mobile Platform) that [*], such [*] may not use or access the Zynga Platform (including, for the avoidance of doubt, Zynga’s account system(s)), the Facebook Platform, or other Zynga Properties, or utilize, incorporate, receive, or contain any Facebook User Data. In the event Zynga acquires a [*], Zynga may continue to operate and maintain the account system of such acquired [*] that existed as of the closing date of the acquisition.

 

  4.2 Game Friends . At such time that FB makes generally available to third party developers a game friends API that enables developers to associate game friends and publish such associations to the open graph protocol (“ Game Friends Protocol ”) Zynga will incorporate into the Zynga Properties and Zynga Mobile Games such Game Friends Protocol for all Covered Zynga Games. For avoidance of doubt, users may be game friends on Zynga Properties, yet not be Facebook friends.

 

  4.3 Authentic FB Account . If Facebook identifies as inauthentic a FB account, and such account is linked to a Zynga User, FB will notify Zynga of such inauthentic FB account and Zynga may subsequently prompt the Zynga User to either authenticate his FB account or set-up a new FB account using the registration process set forth in Section 4.1 and on Exhibit F .

 

  4.4 Zynga User and Profile Pages . Zynga Users may have one or more pages within each Covered Zynga Game that contain information and data related to the applicable Covered Zynga Game (“ Zynga User Pages ”), including one or many profile pages that contain personal information (e.g. common name, hometown, profile picture) (“ Zynga Profile Pages ”). Zynga Profile Pages shall primarily contain information and data that is related to applicable Covered Zynga Games. All real names and profile pictures on Zynga Profile Pages will link to such Zynga User’s Facebook Service profile. In addition, for those Zynga Users who have populated their Zynga Profile Page with a profile picture that was obtained directly from FB connect, Zynga will include in the user’s profile picture on the Zynga Profile Page the FB fav icon per the specifications provided by FB to Zynga.

 

  4.5 Data Ownership . As between the parties, Game Data and Zynga User IDs associated with each Zynga User that a Facebook User provides directly to Zynga shall be owned by Zynga. Any other data that a Facebook User provides directly to Zynga (“ Independent Data ”) shall not be subject to the data restrictions set forth in the SRR or any other restrictions imposed by FB. If Zynga collects Game Data, User IDs, or Independent Data, Zynga must make it clear to the Facebook User that the collection is being carried out by Zynga and not Facebook and make sure that the Facebook User has the opportunity to review Zynga’s privacy policy, which will govern Zynga’s use of such Independent Data.

 

  4.6 Instant Personalization . Zynga may provide a personalized experience to Facebook Users who use the Zynga Service through a Developer Application (a “ Personalized Developer Application ”) in accordance with Exhibit H . Instant Personalization will enable a single authorization at Zynga Properties such that a Zynga User on a Zynga Property will not get a Facebook connect authorization prompt for a Covered Zynga Game that such Zynga User has already installed on the Facebook Site. For the

 

   8    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

  purposes of clarity, as of the Addendum No. 2 Effective Date, the parties acknowledge that Instant Personalization is not enabled on Mobile Platforms.

 

  4.7 Indemnity . FB shall indemnify Zynga with respect to any and all third party claims arising on or after the Addendum No. 2 Effective Date brought against Zynga resulting from [*], so long as such [*] was not caused by any action or inaction on the part of Zynga.

 

5 . User Experience .

 

  5.1 All Covered Zynga Games (irrespective of whether the Covered Zynga Game is offered or otherwise made available on a Zynga Property, the Facebook Site or both) will be interoperable such that any instantiation of a Covered Zynga Game on one property will automatically be instantiated on the other property(ies). For the purposes of illustration only, game play (e.g. game board layout, game levels, game mechanics, etc.) of Taxiville on www.zynga.com, will be substantially similar on the Facebook Site and all other Zynga Properties so that such user will be able to simultaneously engage in the same game play of Taxiville on the Facebook Site and Zynga Properties.

 

  5.2 Any Stories generated by Zynga in connection with a Covered Zynga Game that are displayed in a FB communication channel may contain links but any such link must be a local link that links Zynga Users to the instantiation of the Covered Zynga Game on the site on which such Story is read by friends of such Zynga User, irrespective of where such Story originated (e.g. Stories in a newsfeed on FB must link to the Covered Zynga Game on the Facebook Site and Stories in a newsfeed on a Zynga Property must link to the Covered Zynga Game on the Zynga Property). Any Stories generated by Zynga within a Covered Zynga Game (e.g. on the canvas page of a Covered Zynga Game) may contain links that link Zynga Users off of the Facebook Site; provided, however, that such links must comply with subsections (a)-(c) in Section 7 (Promotions).

 

  5.3 Subject to the terms set forth in Section 2.b. of Addendum No. 1 and in Facebook’s Advertising Guidelines, advertisements generated by the parties and appearing on the Facebook Site or the Zynga Properties may contain links that transition users to any site; provided, however, that advertisements containing social content must only include links that transition a user to the site on which such advertisement is read or viewed.

 

  5.4 In the event that one or more of the points of interconnectivity between the Zynga Properties and the Facebook Platform contemplated by Sections 4.1.1, 4.1.2, 4.2, 4.4 or 5.1 above are unavailable (and such interconnectivity is required for Zynga to obtain a user’s active Facebook session) due to a technical error for a period of [*] and such unavailability is not caused by any acts or omission of Zynga or any of its Affiliates (such [*] outage, a “ Facebook Outage ”), as Zynga’s sole and exclusive remedy, Zynga shall notify FB of the Facebook Outage by sending a screenshot of the outage via email to FB’s Designated Manager to enable FB to verify the Facebook Outage and, beginning on the [*] and continuing only for so long as such point of interconnectivity is unavailable due to a Facebook Outage, Zynga shall be permitted to enable Zynga Users to log-in to a Zynga Property without an active Facebook session. If there are [*] Facebook Outages during a [*] period, Zynga may invoke the Escalation Process.

 

6 . Facebook Platform Enhancements .

 

  6.1 Within the number of days following the Addendum No. 2 Effective Date that are specified in Exhibit D , FB will deploy each of the platform enhancements set forth on Exhibit D . Zynga shall invoke the Escalation Process if it reasonably believes that FB has failed to perform its obligations under this Section 6.1.

 

   9    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

  6.2 In addition, FB will use commercially reasonable efforts to deploy within [*] following the deployment of the last platform enhancement set forth on Exhibit D at least [*] of the APIs and/or features set forth on Exhibit E . Zynga may invoke the Escalation Process if it reasonably believes that FB has failed to perform its obligations under this Section 6.2. If Zynga refers such matter to the Escalation Process and this does not result in the matter being resolved by agreement between the parties, then Zynga may terminate this Amendment No. 2 and termination shall be Zynga’s sole and exclusive remedy for FB’s breach of this Section 6.2.

 

7. Promotions . During the Term, Zynga (including its Affiliates) may promote on the Facebook Site the Zynga Properties and/or Covered Zynga Games; provided, however, that such promotions must (a) link directly and only to the Zynga Properties; (b) not interrupt game play or display any modal dialogs or interstitial screens; and (c) not link to any other Social Platforms. Without limiting the foregoing and provided that the requirements in (a) – (c) above are met, Zynga can (as permitted under the SRR) enable a Zynga message center that provides Zynga level communications and information to users such as messages, points, requests, wishlists and stats.

 

8 . Preferred Terms .

 

  8.1 FB will not apply or develop its general policies (including, but not limited to, the SRR) and algorithms for the purpose of [*] on the Facebook Platform.

 

  8.2 Throughout the Term, FB will make available to Zynga (excluding games on the Zynga Platform developed by third parties) [*], provided that such requirements were imposed by FB in good faith, and provided further that Zynga shall have thirty (30) days to comply with such requirements (except as set forth below in the last sentence of this Section 8.2), measured from the date on which [*] in connection therewith. Notwithstanding the foregoing notice requirement, in no case will FB be required to [*]. FB will not intentionally withhold requirements with the primary purpose of avoiding its obligations under this Section 8.2. FB shall not be in breach of this Section 8.2 in the event a [*].

 

  8.3 Notwithstanding anything to the contrary set forth in Section 4.b.(ii)(4) of Addendum No. 1, the amount of the service fee described in the Facebook Credits Terms that FB charges to Zynga at any given time to redeem Facebook Credits shall be [*] 30% per each Facebook Credit redeemed [*].

 

  8.4 Zynga shall provide FB with notice if it reasonably believes that FB has violated any of the provisions set forth in this Section 8, and FB will have fifteen (15) days after its receipt of such notice to cure such breach (unless FB invokes the Escalation Process during such time period in which case FB shall have thirty (30) days after its receipt of such notice to cure such breach) and will not be liable for any damages related to such breach during such period. [*]. FB agrees that it shall not intentionally and repeatedly breach Section 8.2 with the primary purpose of avoiding its obligations under this Addendum No. 2.

 

  8.5 Notwithstanding anything to the contrary set forth in the SRR (whether as of the Addendum No. 2 Effective Date or thereafter) or this Addendum No. 2, but without limiting Zynga’s obligations under Addendum No. 1 and subject to FB’s generally applicable policies, procedures and payment terms related to advertisements and Sections 5.3 and 7 of this Addendum No. 2, Zynga may include sponsored game elements (e.g. a virtual good or promotion that is sponsored by a third party, such as a McDonald’s blimp within the game board) on the Facebook Site, but solely in a Covered Zynga Game (unless otherwise permitted under the SRR); provided, however, that a substantially similar sponsored game element is already included in the instantiation of such Covered Zynga Game available on the Zynga Property. [*]. For the avoidance of

 

   10    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

  doubt, the foregoing sentence shall not prevent Zynga from offering advertisements as may be permitted by and in accordance with the SRR. As used herein, “Social Ad” means any advertising creative that uses or displays data Zynga receives from FB concerning a user, even if a user consents to such use.

 

9. Term and Termination .

 

  9.1 Unless earlier terminated as provided elsewhere in this Addendum No. 2, the term of this Addendum No. 2 will be for a period of five (5) years from the Effective Date (“ Term ”).

 

  9.2 Either party may terminate this Addendum No. 2 upon written notice to the other party if the other party materially breaches any term of this Addendum No. 2 and such party fails to cure any such breach or violation within thirty (30) days of receipt of written notice of such breach from the non-breaching party (such thirty (30) day period, the “ Breach Cure Period ”). In addition, each party acknowledges that if any such breach or violation is, in the other party’s reasonable discretion, likely (a) to jeopardize the integrity or security of such party’s platform, or such party’s user security or user privacy, or (b) to give rise to material liability of such other party, then such other party may, in addition to its termination remedy and prior to completion of the Escalation Process, at its sole discretion, cease providing the breaching or violating party with access to the Facebook Platform or the Zynga Properties, as applicable, during the Breach Cure Period, provided that [*] in a good faith attempt to resolve the issue that gave rise to such breach, provided, further, that if [*], such other party may so notify the General Counsel of the breaching or violating party via email and thereafter and immediately cease providing access to the Facebook Platform or the Zynga Properties, as applicable.

 

  9.3 In the event of a termination of this Addendum No. 2 (except in the case of a termination pursuant to Section 9.2), the parties shall operate under the following guidelines for a period of (a) [*] following the effective date of such termination if this Addendum No. 2 is terminated at or before [*]; or (b) [*] following the effective date of such termination if this Addendum No. 2 is terminated any time after [*] (“ User Continuity Period ”): (x) FB will provide to Zynga continued access to the Facebook Platform; and (y) Zynga will continue to integrate and display the Facebook Platform on the Zynga Properties for the User Continuity Period, and each party will continue to comply with the Agreement and this Addendum No. 2; provided, however, that in the case of subsections (x) and (y), none of the [*] provisions of this Addendum No. 2 shall apply following the expiration or effective date of termination of this Addendum No. 2.

 

  9.4 Except as specifically set forth in this Addendum No. 2 (including, for the avoidance of doubt, the Sections of this Addendum No. 2 that survive per Section 9.5), neither party will have any liability or obligation under this Addendum No. 2 upon any termination in accordance with the terms of this Addendum No. 2, other than with respect to any liabilities under this Addendum No. 2 that accrued from events that occurred prior to termination.

 

  9.5 The following Sections of this Addendum No. 2 will survive any termination or expiration of the Agreement or this Addendum No. 2: 1.1, 1.3, 4.7, 9.2, 9.3, 10, 11.1 and 12.

 

10. Confidentiality; Publicity . Section 9 of Addendum No. 1 is incorporated herein by reference and shall govern the confidentiality of this Addendum No. 2. Notwithstanding anything to the contrary set forth in the Agreement or this Addendum No. 2, if either party is required to disclose all or any part of the Agreement and/or this Addendum No. 2 pursuant to applicable laws or regulations, then prior to any such required disclosure, such party shall: (a) promptly notify the other party of the obligation to disclose the Agreement and/or this Addendum No. 2; (b) obtain confidential treatment (or the equivalent thereof) for such disclosure; and (c) allow the other party to participate in such protective process and provide all reasonable cooperation in connection

 

   11    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

  therewith. For a period of forty-five (45) days following the Addendum No. 2 Effective Date, the parties will work together to agree upon a product announcement-related joint media event in which the parties’ CEOs will participate. If the parties are unable to mutually agree upon such an event, the parties’ CEOs shall meet in person to discuss the matter. Neither party shall be in breach of this Section 10 if the parties and their respective CEOs are unable to reach agreement on such media event; provided, however, that in lieu of such an event, the parties will issue a joint press release (which release shall include quotes of each party’s CEO) in the form mutually agreed by the parties.

 

11. Escalation Process; Executive Business Review.

 

  11.1 Each party will designate an employee (the “ Designated Manager ”) who will liaise with the other party from time-to-time. Each party may change its Designated Manager(s) from time-to-time and will inform the other party of such a change. The initial Designated Managers will be:

 

Zynga Designated Manager

  

Facebook Designated Manager

Name: [*]    Name: [*]
Title: [*]    Title: [*]
Email: [*]    Email: [*]

If a dispute, claim, question or difference between the parties (a “ Dispute ”) arises regarding this Addendum No.2, the Designated Managers will consult and negotiate for at least [*] to resolve such Dispute. If the Designated Managers are unable to resolve the Dispute, the matter will be escalated to the following senior executives, for resolution for at least another [*]. Each party may change its Designated Senior Executive(s) from time-to-time:

 

Zynga Senior Executive

  

Facebook Senior Executive

Name: [*]    Name: [*]
Title: [*]    Title: [*]
Email: [*]    Email: [*]
cc: [*]    cc: [*]

 

  11.2 During the Term, the CEOs of each party shall meet in person no less frequently than every [*] in order to discuss and review the health of the parties’ relationship.

 

12. General . This Addendum No. 2 supersedes any other prior or collateral agreements, whether oral or written, with respect to the subject matter of this Addendum No. 2. This Addendum No. 2 (including the SRR, Addendum No. 1 and the Exhibits attached to each) sets forth the entire understanding and agreement between the parties with respect to the subject matter of this Addendum No. 2. This Addendum No. 2 may be amended only in a writing signed by both parties. Except for notice to the other party for a breach of this Addendum No. 2 or a Change of Control (unless expressly indicated otherwise in this Addendum No. 2), any other written notice required to be delivered pursuant to this Addendum No. 2 shall be permitted to be delivered via email, provided that any such email notice is sent to the other party’s Designated Manager, with a copy sent to the Designated Senior Executive and their respective cc’s. Any notice to a party for a breach of this Addendum No. 2 or a Change of Control must be delivered in writing via certified mail, FedEx or other delivery service with proof of delivery, and shall be delivered to the address set forth on the signature page of this Addendum No. 2. This Addendum No. 2 shall be construed as if jointly drafted by the parties. The parties are entering this Addendum No. 2 as independent contractors, and this Addendum No. 2 will not be construed to create a partnership, joint venture or employment relationship between them. This Addendum No. 2 will not be effective unless and until signed by both parties. Neither party may assign this Addendum No. 2 or its rights or obligations hereunder without the other party’s prior written consent, except in connection with a

 

   12    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

  Change of Control where the assignee agrees to be bound by the terms of this Addendum No. 2. Notwithstanding the preceding sentence, solely in the event of a Change of Control [*], (a) the party subject to such Change of Control (“ Acquired Party ”) shall provide the other party (“ Non-Acquired Party ”) with reasonable advance written notice of the closing of any such Change of Control, which advance notice shall in no case be less than fifteen (15) days in advance of such closing, and (b) the Non-Acquired Party shall have the right to terminate this Addendum No. 2 upon written notice to the other party within thirty (30) days, or some other period of time mutually agreed in writing by the parties, following the Non-Acquired Party’s receipt of such notice. In no case may Zynga transfer or assign any Facebook User Data obtained under the Agreement or this Addendum No. 2 to any third party, except in connection with a Change of Control as permitted by the SRR; provided, however, that in the event of a Change of Control of Zynga [*], (a) that results in Zynga remaining a separate legal entity following the closing of such transaction, Zynga shall ensure that [*], or (b) that results in Zynga not remaining a separate legal entity following the closing of the transaction, Zynga shall ensure that [*], in each case (i) without FB’s prior written consent; but (ii) provided that in no case may [*] (notwithstanding anything to the contrary set forth in the Agreement) [*]. Zynga shall not, at any time following any Change of Control or assignment (permitted or otherwise) of this Addendum No. 2 or its rights or obligations hereunder, without FB’s prior written consent: (a) intentionally stifle or block growth of MUUs or (b) perform any other action or fail to take an action that directly results in a decrease of MUUs. Subject to the foregoing limitation on assignment, this Addendum No. 2 will be binding upon, enforceable by and inure to the benefit of the parties and each of their successors and permitted assigns.

 

   13    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

IN WITNESS WHEREOF, this Addendum No. 2 has been duly executed by the parties as of the Addendum No. 2 Effective Date.

 

FACEBOOK, INC.         ZYNGA INC.
BY:   

[*]

      BY:   

[*]

NAME:   

[*]

      NAME:   

[*]

TITLE:   

[*]

      TITLE:   

[*]

DATE:   

[*]

      DATE:   

[*]

FACEBOOK, IRELAND LIMITED         
BY:   

[*]

        
NAME:   

[*]

        
TITLE:   

[*]

        
DATE:   

[*]

        
Address for written notice of breach:         

Facebook, Inc.

1601 S. California Ave.

Palo Alto, CA 94304

Attn: General Counsel

     

Zynga Inc.

444 De Haro Street, Suite 132

San Francisco, CA 94107

Attn: General Counsel

 

   14    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

Exhibit A

Definitions

Acquired Zynga Mobile Game ” means a Social Game offered or otherwise made available on a Mobile Platform that Zynga acquires from a third party (whether by merger, stock purchase, asset acquisition or otherwise) that operates only on the Facebook Platform or that operates on both the Facebook Platform and any other Social Platform(s).

Affiliates ” has the meaning set forth in Addendum No. 1.

API(s) ” means application programming interface(s).

Change of Control ” means a third party acquires, directly or indirectly, through merger, stock purchase, or otherwise: (i) beneficial ownership of more than fifty percent (50%) of the voting power of the issued and outstanding shares of a party, (ii) the ability to nominate a majority of a party’s board of directors, or (iii) all or substantially all of a party’s assets.

Covered Zynga Game ” means any Social Games or Zynga Mobile Games now existing or later developed, offered or provided by Zynga or any of its Affiliates, either directly or indirectly through a third party (including, without limitation, as part of a relationship or experience that is substantially branded or co-branded with any of your trademarks, logos or other branding elements or those of any of your Affiliates) that [*].

Escalation Process ” means the dispute resolution process set forth in Section 11.

Facebook Game ” means any game owned or developed by or on behalf of FB or any of its Affiliates that (a) has game play as its primary purpose; and (b) has a user account (i.e., a user is prompted to log-in or otherwise enter identifying information, including but not limited to, username, email address, password, demographic information, etc.), generates Stories to be shared with Facebook Users, or maintains a dependency on interactions and/or collaborations with other Facebook Users. In the event that FB or any of its Affiliates acquires a company that owns or offers games, then FB shall use commercially reasonable efforts to cease the offering or otherwise making available such game at the end of ninety (90) days following the closing of such acquisition. For the avoidance of doubt, (y) an application that merely contains game mechanics (e.g. leader boards, incentives, points, etc.) will not be considered a Facebook Game; and (z) “Facebook Games” shall not include FB’s chess game or other games or applications that have the primary purpose of demonstrating to FB developers how to use the Facebook Platform.

Facebook Platform ” means Facebook’s APIs, tools and services that enable others to retrieve data, information and content from FB and transmit data, information and content to FB.

Facebook Service ” means the features and services made available through (a) the Facebook Site; (b) the Facebook Platform; and (c) other media, software (such as toolbar), devices or networks now existing or later developed.

Facebook Site ” means www.facebook.com and any other FB branded or co-branded websites, including, without limitation, sub-domains, international versions, widgets, and versions made available through applications and mobile versions.

Facebook User ” means a human user of the Facebook Service.

Facebook User Data ” means: (a) any data, content, code or other materials received by Zynga from FB through the Facebook Platform in connection with this Addendum No. 2; and (b) any information that Zynga would not have if Zynga did not access such data, content, code or other materials through the Facebook Platform. “Facebook User Data” does not include Game Data or Independent Data.

 

   15    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

Game Data ” means any game-derived data for a Zynga User including, but not limited to, such user’s experience points, users’ game-related interactions with other users, any Zynga virtual goods purchased by such user, and the game level achieved by such user.

Independent Data ” has the meaning set forth in Section 4.5.

Instant Personalization ” means the pilot Facebook Service program that allows certain Facebook Platform developers to access, use, and display the data defined as “General Information” in the FB Privacy Policy to personalize a Facebook User’s experience on such developer’s website or service as soon as the Facebook User arrives to the website or service.

Mobile Acquired User ” means a Facebook User of an Acquired Zynga Mobile Game that has granted permission (implicitly or explicitly) for such Acquired Zynga Mobile Game to access their basic information, but that has never granted such permission for any other Covered Zynga Game.

Mobile MUUs ” means the number of de-duplicated monthly unique users that are playing at least one Covered Zynga Game that is a Zynga Mobile Game.

Mobile Platform ” means a mobile platform, including but not limited to, Symbian, Brew, Android, iOS, Windows Phone and RIM.

MUU ” means de-duplicated monthly unique users across all Covered Zynga Games.

Social Game Company ” means a third party developer or provider of Social Games that is primarily in the business of developing, distributing and/or publishing Social Games.

Social Game ” means a game that (a) has a user account (i.e. a user is prompted to log-in or otherwise enter identifying information, including but not limited to, username, email address, password, demographic information, etc.), or (b) allows users to establish connections, interact and/or collaborate with other users. For the purposes of clarity, Social Game shall not include “solo games” that do not have user accounts and do not allow users to connect with friends as described in subsection (b) above.

Social Platform ” means any website, platform, network, device, application, online service or other media (now existing or later developed), excluding the Zynga Platform, through which a user can create or utilize an online identity (e.g., a profile), establish connections with others and share information or communicate with others. As of the Addendum No. 2 Effective Date, Social Platforms include (but are not limited to) the following companies and their acquirers or successors: Twitter, Google’s social media properties (including Orkut, Buzz, “Google ME”, or other properties with similar functionality), Gmail, LinkedIn, StudiVZ, Cyworld, Odnoklassniki, VKontakte, Mail.ru, kaixin001, 51.com and MySpace. For the avoidance of doubt, nothing herein shall prohibit Zynga from sending communications to Zynga Users via electronic mail or SMS or providing an email- or SMS-based game that works across email providers (e.g. Gmail, Yahoo, Hotmail). “Social Platform” shall not include a platform that is used primarily to provide customer support to Zynga Users or maintain user forums in which Zynga Users communicate directly with one another primarily to discuss support issues related to the Zynga Properties or Zynga games.

Story ” means a story, status update, event, comment, rating, review, blog post, photo, video, or other information shared by or generated about a user for communication with other users.

Substantially Similar Game ” means a Social Game offered by Zynga that has a substantially similar theme as a Covered Zynga Game or an Acquired Covered Zynga Game (i.e. Cabville and Taxiville would be substantially similar games, but Taxiville and Yachtville would not be). For purposes of this definition, “theme” shall mean the environment or objectives of the Social Game.

Zynga ID ” means an identification assigned by Zynga to any Zynga User who sets up an account with Zynga.

 

16


Facebook/Zynga Confidential Information

 

Zynga Mobile Game ” means a Social Game that Zynga offers or otherwise makes available on a Mobile Platform.

Zynga Platform ” has the meaning set forth in Section 3.1.

Zynga Property ” means any sites and applications (except as expressly set forth below), now existing or later developed, that are owned or operated by Zynga or any of its Affiliates, either directly or indirectly through a third party (including, without limitation, as part of a relationship or experience that is substantially branded or co-branded with any of your trademarks, logos or other branding elements or those of any of your Affiliates), including but not limited to, www.zynga.com and any other Zynga branded or co-branded websites, including, without limitation, sub-domains, international versions, versions developed for other form factors and for Mobile Platforms (excluding Zynga’s activities [*] as set forth in Section 3.6.1). Zynga Property does not include (a) non-Covered Zynga Games that Zynga offers or otherwise makes available (as permitted under this Addendum No. 2) through iFrames, embedded java script, or API calls on a page on third party web sites (including but not limited to other Social Platforms) that are not owned or operated by Zynga or any of its Affiliates, either directly or indirectly through a third party and where the user navigated domain is not a Zynga domain, or (b) Solo Mobile Games.

Zynga User ” means a human user of a Covered Zynga Game or a Zynga Property.

 

   17    *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

Exhibit B1

Web Target Growth Schedule

 

All MUU numbers in mm (millions)                          
                  Starting MUU for Web         [*]
                  Y2 Ending MUU         [*]
                  Y5 Ending MUU         [*]
                  [*]    [*]       [*]
       

Quarterly Growth Rate (Y0 to Y2):

     [*]    [*]       [*]
        Quarterly Growth Rate (Y3 to Y5):      [*]    [*]       [*]
        (calendar quarters)              
             [*]    [*]       [*]

Y1:

   2011      Q1           [*]    [*]       [*]
        Q2           [*]    [*]       [*]
        Q3           [*]    [*]       [*]
        Q4           [*]    [*]       [*]

Y2:

   2012      Q1           [*]    [*]       [*]
        Q2           [*]    [*]       [*]
        Q3           [*]    [*]       [*]
        Q4           [*]    [*]       [*]

Y3:

   2013      Q1           [*]    [*]       [*]
        Q2           [*]    [*]       [*]
        Q3           [*]    [*]       [*]
        Q4           [*]    [*]       [*]

Y4:

   2014      Q1           [*]    [*]       [*]
        Q2           [*]    [*]       [*]
        Q3           [*]    [*]       [*]
        Q4           [*]    [*]       [*]

Y5:

   2015      Q1           [*]    [*]       [*]
        Q2           [*]    [*]       [*]
        Q3           [*]    [*]       [*]
        Q4           [*]    [*]       [*]

 

  18   *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

        Exhibit B2

        Mobile Target Growth Schedule

Q4Y2 (2012) Ending Mobile MUU: [*]

 

  19   *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

Exhibit C

[Intentionally left blank]

 

20


Facebook/Zynga Confidential Information

 

Exhibit D

Product Enhancements

1. Within sixty (60) days following the Addendum No. 2 Effective Date, FB will create a type of discovery Story that is generated based on a Facebook User’s usage of a game or application. Such Story will be generated at least one (1) time if and when a Facebook User has (a) within a calendar year, logged more than 50 hours of playing time of a game or application; or (b) played a game or application for more than 40 days. Such Stories will also appear to Facebook Users’ non-gamer friends. Facebook may replace this product enhancement at any time with an alternative solution that drives more game or application installs or re-activation of inactive users. If Zynga reasonably believes that such alternative solution is not driving more game or application installs or re-activation of inactive users, Zynga shall provide FB with notice and FB shall have forty-five (45) days to remedy such problem.

2. Within forty-five (45) days following the Addendum No. 2 Effective Date, FB will surface Stories in the recent stories feed related to Covered Zynga Games that are generated by Facebook Users to such Facebook User’s friends that have played such Covered Zynga Game at least once in the sixty (60) days immediately preceding the generation of such Story. FB will continue to surface such Stories for a period that is the greater of: (x) ninety (90) days following the first day that this enhancement is made available, or (y) until FB makes a change to and/or discontinues such Stories.

3. Within ninety (90) days following the Addendum No. 2 Effective Date, FB will provide API access for sending requests that does not require FB confirmation dialogs. FB must approve all flows which use such APIs and such APIs will be subject to continued quality control reviews (including generally applied algorithmic-based limitations) to ensure good user experience.

 

21


Facebook/Zynga Confidential Information

 

        Exhibit E

        Facebook Platform Enhancements

[*]

 

  22   *Confidential Treatment Requested.


Facebook/Zynga Confidential Information

 

Exhibit F

Registration Flow

 

   

Facebook will enable a registration API which allows Zynga Users to create a new FB account on the Zynga Properties.

 

   

FB will provide Zynga with the data fields necessary to create a new FB account (“ Data Fields ”) (e.g., “First Name”, “Last Name”, “Email Address”, “Password”, “Gender”, “Date of Birth”). Data Fields may be changed by FB from time-to-time. Promptly following receipt of notice from FB, Zynga will implement and update the Data Fields in the registration flow.

 

   

FB will provide Zynga with the security information fields necessary to create a new FB account (“ Security Information Fields ”) (e.g., URL referrer that the user had when they hit the registration page, the IP address of the user, the length of time the user spent filling out a registration form, the facebook.com cookies present on the user’s machine, the “User Agent” of the user’s browser). Security Information may be changed by FB from time-to-time. Promptly following receipt of notice from FB, Zynga will implement and update the Security Information Fields that must be passed to Facebook.

 

   

Zynga will store and use the Data Fields and Security Information Fields for the purpose of providing users with the Registration Flow.

 

   

Zynga will pass to FB all information Zynga collects using the then-current Data Fields and Security Information Fields designated by FB.

 

   

Prior to linking a Facebook User’s Zynga account to their FB account, Zynga will notify and obtain clear, conspicuous and express consent from such Facebook User. Zynga will be solely responsible for obtaining such consent from such Facebook Users.

 

   

If a user’s attempted registration is deemed by FB to be invalid or an error has occurred, the registration API will generate an error message (e.g., if a user enters an email address that has already been used to create an existing FB account, then FB will provide a notice that an account for such email address already exists).

 

   

Zynga will include in the Registration Flow any and all legal, privacy, security and/or regulatory-related language (including links to web applications or web pages) that FB provides to Zynga from time-to-time (e.g. terms of use, privacy policy) and Zynga will promptly implement any FB-provided changes to such language, the Data Fields or Security Information.

 

   

Zynga will submit the initial Registration Flow to FB’s Designated Manager for review and approval of FB Elements prior to making it available to users. As used herein, “ FB Elements ” includes but is not limited to, Data Fields and Security Information Fields, messaging to users, FB assets and legal, regulatory, security and/or privacy language and other related requirements. If FB does not respond within 3 business days following FB’s receipt of such Registration Flow with a detailed summary of unapproved elements of the Registration Flow, then Zynga may, as its sole remedy, invoke the Escalation Process.

 

   

Zynga may make modifications to those portions of the Registration Flow that do not impact the FB Elements. Notwithstanding the foregoing, if Zynga makes any modifications that have a substantial impact on the Registration Flow, Zynga will re-submit such modified Registration Flow to FB’s Designated Manager for review and approval prior to making the modified Registration Flow available to users. If FB does not respond within 3 days with a detailed summary of the

 

23


Facebook/Zynga Confidential Information

 

 

unapproved elements of the Registration Flow, then Zynga may, as its sole remedy, invoke the Escalation Process.

 

24


Facebook/Zynga Confidential Information

 

Exhibit G

Zynga Platform

(1) All games on the Zynga Platform developed by third parties must be registered for the Facebook API and have a unique application identifier that is different from any application ID used by Zynga or any Zynga games.

(2) All games on the Zynga Platform must make all API requests related to login, identity, friends and game friends (“ Core Social APIs ”) directly and solely to FB. Notwithstanding the preceding sentence, Zynga may develop the Facebook Zynga SDK. As used herein, “ Facebook Zynga SDK ” means a software development kit that Zynga develops for distribution on the Facebook Site in accordance with all the SDK Requirements solely (1) to facilitate the development of games on the Zynga Platform that use the Core Social APIs and (2) for the purpose of caching, instrumentation, graceful degradation, performance, security, logging, infrastructure or statistics related solely to the Core Social APIs. Zynga hereby grants FB all rights necessary to use, copy, modify, sublicense and distribute on the Facebook Site the Facebook Zynga SDK and Documentation. “ SDK Requirements ” means the Facebook Zynga SDK (a) [*]: (i) API methods, (ii) signatures (i.e. the same inputs/outputs for all method calls), (iii) API names, (iv) functionality and (v) semantics, as the Core Social APIs; (b) shall remain current and reflect any changes, updates, modifications, etc. that FB makes to the Core Social APIs from time-to-time; (c) must comply with the SRR; (d) include accompanying documentation (“ Documentation ”); and (e) may include Zynga-developed API methods related to game friends (“ Zynga Game Friends Equivalents ”) only until FB makes available the Game Friends Protocol, at which time Zynga shall remove the Zynga Game Friends Equivalents from the Facebook Zynga SDK and incorporate the Game Friends Protocol per FB’s requirements. As between the parties, Facebook retains the sole right to distribute the Facebook Zynga SDK to third parties, and Facebook will provide a summary description of the Facebook Zynga SDK in the developer section of the Facebook Site with a download link to the developer portion of a Zynga Property for the Documentation. The Zynga Platform may make calls to Core Social APIs on behalf of games, provided that the Zynga API provides only substantially different functionality than the Core Social APIs and does not combine any such functionality(ies) to serve as a replacement for any of the Core Social APIs (e.g., the Zynga API may provide a leaderboard API method that retrieves the top 10 scores of user’s friends such that the Zynga Platform could call getFriends in order to determine which users to rank).

(3) To the extent that games on the Zynga Platform integrate with FB communication channels, such integration must happen through the standard Facebook Platform APIs for the application. For the avoidance of doubt, Zynga cannot publish activity about a third party game to FB via Zynga’s application identifier; such activity must be published directly via the application identifier of such third party game.

(4) To the extent that games on the Zynga Platform generate Stories, such Stories shall be subject to the requirements set forth in Section 5.2 of this Addendum No. 2.

 

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Exhibit H

Instant Personalization

 

1. Availability and Access to Instant Personalization . If Zynga desires to make Instant Personalization available on the Zynga Properties, Zynga will consult with FB and FB will assist Zynga in developing an Instant Personalization experience on the Zynga Properties.

 

2. Use of Facebook User Data for Instant Personalization . If Zynga makes the Instant Personalization service available, then when a Facebook User (or a Facebook User’s friends or other category of user as approved in writing by FB) visits the Zynga Properties, so long as such Facebook User has not exercised an Opt-Out (as defined in Section 4.5.3.6 below) and subject to the SRR and the Facebook Platform Policies, Zynga may use the data defined as “ General Information ” in the Facebook Privacy Policy to improve the user’s experience on the Zynga Properties through Instant Personalization. As of the Addendum No. 2 Effective Date, General Information includes a Facebook User’s and the Facebook User’s friends’ names, profile pictures, gender, user ID’s, connections and publicly viewable Facebook User Data. In addition, Instant Personalization will provide a session key for every user that is substantially equivalent to a session key obtained on FB canvas for an installed user. For the avoidance of doubt and notwithstanding anything to the contrary set forth in the Agreement or this Addendum No. 2, Zynga’s ability to use Facebook User Data as part of a Personalized Developer Application is subject to the generally applicable requirements and restrictions specified in the SRR and the Facebook Platform Policies.

 

3. Requirements of Use of Instant Personalization Product . Zynga’s access to and use of the Instant Personalization product is subject to the following requirements:

 

  3.1 FB launching the Instant Personalization service in a particular territory before Instant Personalization can be used by Zynga in that specific territory.

 

  3.2 FB’s written approval of each Personalized Developer Application prior to the launch of such Personalized Developer Application. Zynga must launch such Personalization Developer Application within a reasonable time period after receiving the written approval from FB.

 

  3.3 Zynga will specify to FB in writing (which may be provided by email) the data Zynga will access in providing such Personalized Developer Applications and an explanation of how Zynga will use such data.

 

  3.4 With respect to every Facebook User for whom Zynga receives Facebook User Data who has not formally connected, Zynga agrees to display, with the frequency specified by FB, the dialog specified or approved by FB in writing (for example, the “blue bar”), which dialog gives such user the opportunity to opt out of Zynga’s use of such Facebook User Data. If such Facebook User opts out in such dialog, Zynga will delete that Facebook User Data immediately.

 

  3.5 For as long as Zynga has Personalized Developer Applications, Zynga will also provide an easy and prominent method for (a) Facebook Users to opt out of Zynga’s use of their Facebook User Data and (b) Facebook Users to request the deletion of all information Zynga received from FB about such Facebook Users. In addition, Zynga will provide an email address to FB, which may be provided to Facebook Users, so that FB may enable any Facebook User who has never visited Zynga’s Personalized Developer Applications to request that Zynga delete all information Zynga received from FB about such Facebook User. Zynga agrees to comply with all such requests as promptly as possible, but in any case within twenty-four (24) hours of receiving such request.

 

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  3.6 If a Facebook User at any time opts out of: (a) Instant Personalization for the Zynga Properties; (b) Instant Personalization in general; and/or (c) the Facebook Platform in general (any such action, an “ Opt-Out ”), Zynga will discontinue use of the Facebook User Data of such Facebook User in connection with Instant Personalization as soon as the Facebook User exercises such Opt-Out.

 

  3.7 Zynga is fully responsible for Facebook User Data in Zynga’s possession or control. As such, Zynga will deploy administrative, technical and physical safeguards that prevent the unauthorized access, processing, use or disclosure of Facebook User Data. Zynga promptly will notify FB of any unauthorized access, processing, use or disclosure of Facebook User Data and will cooperate with FB to address any problems or concerns resulting from such unauthorized access. If FB requests to review Zynga’s security program, Zynga will grant FB full and complete access and will cooperate with FB to address any security concerns.

 

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Annex 1

Statement of Rights and Responsibilities

 

 

This agreement was written in English (US). To the extent any translated version of this agreement conflicts with the English version, the English version controls. Please note that Section 16 contains certain changes to the general terms for users outside the United States.

Date of Last Revision: October 4, 2010.

Statement of Rights and Responsibilities

This Statement of Rights and Responsibilities (“Statement”) derives from the Facebook Principles , and governs our relationship with users and others who interact with Facebook. By using or accessing Facebook, you agree to this Statement.

 

  1. Privacy

Your privacy is very important to us. We designed our Privacy Policy to make important disclosures about how you can use Facebook to share with others and how we collect and can use your content and information. We encourage you to read the Privacy Policy, and to use it to help make informed decisions.

 

  2. Sharing Your Content and Information

You own all of the content and information you post on Facebook, and you can control how it is shared through your privacy and application settings . In addition:

 

  1. For content that is covered by intellectual property rights, like photos and videos (“IP content”), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (“IP License”). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.

 

  2. When you delete IP content, it is deleted in a manner similar to emptying the recycle bin on a computer. However, you understand that removed content may persist in backup copies for a reasonable period of time (but will not be available to others).

 

  3. When you use an application, your content and information is shared with the application. We require applications to respect your privacy, and your agreement with that application will control how the application can use, store, and transfer that content and information. (To learn more about Platform, read our Privacy Policy and Platform Page .)

 

  4. When you publish content or information using the “everyone” setting, it means that you are allowing everyone, including people off of Facebook, to access and use that information, and to associate it with you (i.e., your name and profile picture).

 

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  5. We always appreciate your feedback or other suggestions about Facebook, but you understand that we may use them without any obligation to compensate you for them (just as you have no obligation to offer them).

 

  3. Safety

We do our best to keep Facebook safe, but we cannot guarantee it. We need your help to do that, which includes the following commitments:

 

  1. You will not send or otherwise post unauthorized commercial communications (such as spam) on Facebook.

 

  2. You will not collect users’ content or information, or otherwise access Facebook, using automated means (such as harvesting bots, robots, spiders, or scrapers) without our permission.

 

  3. You will not engage in unlawful multi-level marketing, such as a pyramid scheme, on Facebook.

 

  4. You will not upload viruses or other malicious code.

 

  5. You will not solicit login information or access an account belonging to someone else.

 

  6. You will not bully, intimidate, or harass any user.

 

  7. You will not post content that: is hateful, threatening, or pornographic; incites violence; or contains nudity or graphic or gratuitous violence.

 

  8. You will not develop or operate a third-party application containing alcohol-related or other mature content (including advertisements) without appropriate age-based restrictions.

 

  9. You will not offer any contest, giveaway, or sweepstakes (“promotion”) on Facebook without our prior written consent. If we consent, you take full responsibility for the promotion, and will follow our Promotions Guidelines and all applicable laws.

 

  10. You will not use Facebook to do anything unlawful, misleading, malicious, or discriminatory.

 

  11. You will not do anything that could disable, overburden, or impair the proper working of Facebook, such as a denial of service attack.

 

  12. You will not facilitate or encourage any violations of this Statement.

 

  4. Registration and Account Security

Facebook users provide their real names and information, and we need your help to keep it that way. Here are some commitments you make to us relating to registering and maintaining the security of your account:

 

  1. You will not provide any false personal information on Facebook, or create an account for anyone other than yourself without permission.

 

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  2. You will not create more than one personal profile.

 

  3. If we disable your account, you will not create another one without our permission.

 

  4. You will not use your personal profile for your own commercial gain (such as selling your status update to an advertiser).

 

  5. You will not use Facebook if you are under 13.

 

  6. You will not use Facebook if you are a convicted sex offender.

 

  7. You will keep your contact information accurate and up-to-date.

 

  8. You will not share your password, (or in the case of developers, your secret key), let anyone else access your account, or do anything else that might jeopardize the security of your account.

 

  9. You will not transfer your account (including any page or application you administer) to anyone without first getting our written permission.

 

  10. If you select a username for your account we reserve the right to remove or reclaim it if we believe appropriate (such as when a trademark owner complains about a username that does not closely relate to a user’s actual name).

 

  5. Protecting Other People’s Rights

We respect other people’s rights, and expect you to do the same.

 

  1. You will not post content or take any action on Facebook that infringes or violates someone else’s rights or otherwise violates the law.

 

  2. We can remove any content or information you post on Facebook if we believe that it violates this Statement.

 

  3. We will provide you with tools to help you protect your intellectual property rights. To learn more, visit our How to Report Claims of Intellectual Property Infringement page.

 

  4. If we remove your content for infringing someone else’s copyright, and you believe we removed it by mistake, we will provide you with an opportunity to appeal.

 

  5. If you repeatedly infringe other people’s intellectual property rights, we will disable your account when appropriate.

 

  6. You will not use our copyrights or trademarks (including Facebook, the Facebook and F Logos, FB, Face, Poke, Wall and 32665), or any confusingly similar marks, without our written permission.

 

  7. If you collect information from users, you will: obtain their consent, make it clear you (and not Facebook) are the one collecting their information, and post a privacy policy explaining what information you collect and how you will use it.

 

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  8. You will not post anyone’s identification documents or sensitive financial information on Facebook.

 

  9. You will not tag users or send email invitations to non-users without their consent.

 

  6. Mobile

 

  1. We currently provide our mobile services for free, but please be aware that your carrier’s normal rates and fees, such as text messaging fees, will still apply.

 

  2. In the event you change or deactivate your mobile telephone number, you will update your account information on Facebook within 48 hours to ensure that your messages are not sent to the person who acquires your old number.

 

  3. You provide all rights necessary to enable users to sync (including through an application) their contact lists with any basic information and contact information that is visible to them on Facebook, as well as your name and profile picture.

 

  7. Payments

If you make a payment on Facebook or use Facebook Credits, you agree to our Payments Terms .

 

  8. Special Provisions Applicable to Share Links

If you include our Share Link button on your website, the following additional terms apply to you:

 

  1. We give you permission to use Facebook’s Share Link button so that users can post links or content from your website on Facebook.

 

  2. You give us permission to use and allow others to use such links and content on Facebook.

 

  3. You will not place a Share Link button on any page containing content that would violate this Statement if posted on Facebook.

 

  9. Special Provisions Applicable to Developers/Operators of Applications and Websites

If you are a developer or operator of a Platform application or website, the following additional terms apply to you:

 

  1. You are responsible for your application and its content and all uses you make of Platform. This includes ensuring your application or use of Platform meets our Facebook Platform Policies and our Advertising Guidelines .

 

  2. Your access to and use of data you receive from Facebook, will be limited as follows:

 

  1. You will only request data you need to operate your application.

 

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  2. You will have a privacy policy that tells users what user data you are going to use and how you will use, display, share, or transfer that data and you will include your privacy policy URL in the Developer Application .

 

  3. You will not use, display, share, or transfer a user’s data in a manner inconsistent with your privacy policy.

 

  4. You will delete all data you receive from us concerning a user if the user asks you to do so, and will provide a mechanism for users to make such a request.

 

  5. You will not include data you receive from us concerning a user in any advertising creative.

 

  6. You will not directly or indirectly transfer any data you receive from us to (or use such data in connection with) any ad network, ad exchange, data broker, or other advertising related toolset, even if a user consents to that transfer or use.

 

  7. You will not sell user data. If you are acquired by or merge with a third party, you can continue to use user data within your application, but you cannot transfer user data outside of your application.

 

  8. We can require you to delete user data if you use it in a way that we determine is inconsistent with users’ expectations.

 

  9. We can limit your access to data.

 

  10. You will comply with all other restrictions contained in our Facebook Platform Policies .

 

  3. You will not give us information that you independently collect from a user or a user’s content without that user’s consent.

 

  4. You will make it easy for users to remove or disconnect from your application.

 

  5. You will make it easy for users to contact you. We can also share your email address with users and others claiming that you have infringed or otherwise violated their rights.

 

  6. You will provide customer support for your application.

 

  7. You will not show third party ads or web search boxes on Facebook.

 

  8. We give you all rights necessary to use the code, APIs, data, and tools you receive from us.

 

  9. You will not sell, transfer, or sublicense our code, APIs, or tools to anyone.

 

  10. You will not misrepresent your relationship with Facebook to others.

 

  11. You may use the logos we make available to developers or issue a press release or other public statement so long as you follow our Facebook Platform Policies .

 

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  12. We can issue a press release describing our relationship with you.

 

  13. You will comply with all applicable laws. In particular you will (if applicable):

 

  1. have a policy for removing infringing content and terminating repeat infringers that complies with the Digital Millennium Copyright Act.

 

  2. comply with the Video Privacy Protection Act (“VPPA”), and obtain any opt-in consent necessary from users so that user data subject to the VPPA may be shared on Facebook. You represent that any disclosure to us will not be incidental to the ordinary course of your business.

 

  14. We do not guarantee that Platform will always be free.

 

  15. You give us all rights necessary to enable your application to work with Facebook, including the right to incorporate content and information you provide to us into streams, profiles, and user action stories.

 

  16. You give us the right to link to or frame your application, and place content, including ads, around your application.

 

  17. We can analyze your application, content, and data for any purpose, including commercial (such as for targeting the delivery of advertisements and indexing content for search).

 

  18. To ensure your application is safe for users, we can audit it.

 

  19. We can create applications that offer similar features and services to, or otherwise compete with, your application.

 

  10. About Advertisements and Other Commercial Content Served or Enhanced by Facebook

Our goal is to deliver ads that are not only valuable to advertisers, but also valuable to you. In order to do that, you agree to the following:

 

  1. You can use your privacy settings to limit how your name and profile picture may be associated with commercial, sponsored, or related content (such as a brand you like) served or enhanced by us. You give us permission to use your name and profile picture in connection with that content, subject to the limits you place.

 

  2. We do not give your content or information to advertisers without your consent.

 

  3. You understand that we may not always identify paid services and communications as such.

 

  11. Special Provisions Applicable to Advertisers

You can target your specific audience by buying ads on Facebook or our publisher network. The following additional terms apply to you if you place an order through our online advertising portal (“Order”):

 

  1.

When you place an Order, you will tell us the type of advertising you want to buy, the amount you want to spend, and your bid. If we accept your Order, we will

 

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  deliver your ads as inventory becomes available. When serving your ad, we do our best to deliver the ads to the audience you specify, although we cannot guarantee in every instance that your ad will reach its intended target.

 

  2. In instances where we believe doing so will enhance the effectiveness of your advertising campaign, we may broaden the targeting criteria you specify.

 

  3. You will pay for your Orders in accordance with our Payments Terms . The amount you owe will be calculated based on our tracking mechanisms.

 

  4. Your ads will comply with our Advertising Guidelines .

 

  5. We will determine the size, placement, and positioning of your ads.

 

  6. We do not guarantee the activity that your ads will receive, such as the number of clicks you will get.

 

  7. We cannot control how people interact with your ads, and are not responsible for click fraud or other improper actions that affect the cost of running ads. We do, however, have systems to detect and filter certain suspicious activity, learn more here .

 

  8. You can cancel your Order at any time through our online portal, but it may take up to 24 hours before the ad stops running. You are responsible for paying for those ads.

 

  9. Our license to run your ad will end when we have completed your Order. You understand, however, that if users have interacted with your ad, your ad may remain until the users delete it.

 

  10. We can use your ads and related content and information for marketing or promotional purposes.

 

  11. You will not issue any press release or make public statements about your relationship with Facebook without written permission.

 

  12. We may reject or remove any ad for any reason.

 

  13. If you are placing ads on someone else’s behalf, we need to make sure you have permission to place those ads, including the following:

 

  1. You warrant that you have the legal authority to bind the advertiser to this Statement.

 

  2. You agree that if the advertiser you represent violates this Statement, we may hold you responsible for that violation.

 

  12. Special Provisions Applicable to Pages

If you create or administer a Page on Facebook, you agree to our Pages Terms.

 

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  13. Amendments

 

  1. We can change this Statement if we provide you notice (by posting the change on the Facebook Site Governance Page ) and an opportunity to comment. To get notice of any future changes to this Statement, visit our Facebook Site Governance Page and become a fan.

 

  2. For changes to sections 7, 8, 9, and 11 (sections relating to payments, application developers, website operators, and advertisers), we will give you a minimum of three days notice. For all other changes we will give you a minimum of seven days notice. All such comments must be made on the Facebook Site Governance Page .

 

  3. If more than 7,000 users comment on the proposed change, we will also give you the opportunity to participate in a vote in which you will be provided alternatives. The vote shall be binding on us if more than 30% of all active registered users as of the date of the notice vote.

 

  4. We can make changes for legal or administrative reasons, or to correct an inaccurate statement, upon notice without opportunity to comment.

 

  14. Termination

If you violate the letter or spirit of this Statement, or otherwise create risk or possible legal exposure for us, we can stop providing all or part of Facebook to you. We will notify you by email or at the next time you attempt to access your account. You may also delete your account or disable your application at any time. In all such cases, this Statement shall terminate, but the following provisions will still apply: 2.2, 2.4, 3-5, 8.2, 9.1-9.3, 9.9, 9.10, 9.13, 9.15, 9.18, 10.3, 11.2, 11.5, 11.6, 11.9, 11.12, 11.13, and 14-18.

 

  15. Disputes

 

  1. You will resolve any claim, cause of action or dispute (“claim”) you have with us arising out of or relating to this Statement or Facebook exclusively in a state or federal court located in Santa Clara County. The laws of the State of California will govern this Statement, as well as any claim that might arise between you and us, without regard to conflict of law provisions. You agree to submit to the personal jurisdiction of the courts located in Santa Clara County, California for the purpose of litigating all such claims.

 

  2. If anyone brings a claim against us related to your actions, content or information on Facebook, you will indemnify and hold us harmless from and against all damages, losses, and expenses of any kind (including reasonable legal fees and costs) related to such claim.

 

  3.

WE TRY TO KEEP FACEBOOK UP, BUG-FREE, AND SAFE, BUT YOU USE IT AT YOUR OWN RISK. WE ARE PROVIDING FACEBOOK “AS IS” WITHOUT ANY EXPRESS OR IMPLIED WARRANTIES INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND NON-INFRINGEMENT. WE DO NOT GUARANTEE THAT FACEBOOK WILL BE SAFE OR SECURE. FACEBOOK IS NOT RESPONSIBLE FOR THE ACTIONS, CONTENT, INFORMATION, OR DATA OF THIRD PARTIES, AND YOU RELEASE US, OUR DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS FROM ANY CLAIMS AND DAMAGES, KNOWN AND UNKNOWN, ARISING OUT OF OR IN ANY WAY

 

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  CONNECTED WITH ANY CLAIM YOU HAVE AGAINST ANY SUCH THIRD PARTIES. IF YOU ARE A CALIFORNIA RESIDENT, YOU WAIVE CALIFORNIA CIVIL CODE §1542, WHICH SAYS: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.” WE WILL NOT BE LIABLE TO YOU FOR ANY LOST PROFITS OR OTHER CONSEQUENTIAL, SPECIAL, INDIRECT, OR INCIDENTAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THIS STATEMENT OR FACEBOOK, EVEN IF WE HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. OUR AGGREGATE LIABILITY ARISING OUT OF THIS STATEMENT OR FACEBOOK WILL NOT EXCEED THE GREATER OF ONE HUNDRED DOLLARS ($100) OR THE AMOUNT YOU HAVE PAID US IN THE PAST TWELVE MONTHS. APPLICABLE LAW MAY NOT ALLOW THE LIMITATION OR EXCLUSION OF LIABILITY OR INCIDENTAL OR CONSEQUENTIAL DAMAGES, SO THE ABOVE LIMITATION OR EXCLUSION MAY NOT APPLY TO YOU. IN SUCH CASES, FACEBOOK’S LIABILITY WILL BE LIMITED TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW.

 

  16. Special Provisions Applicable to Users Outside the United States

We strive to create a global community with consistent standards for everyone, but we also strive to respect local laws. The following provisions apply to users outside the United States:

 

  1. You consent to having your personal data transferred to and processed in the United States.

 

  2. If you are located in a country embargoed by the United States, or are on the U.S. Treasury Department’s list of Specially Designated Nationals you will not engage in commercial activities on Facebook (such as advertising or payments) or operate a Platform application or website.

 

  3. Certain specific terms that apply only for German users are available here .

 

  17. Definitions

 

  1. By “Facebook” we mean the features and services we make available, including through (a) our website at www.facebook.com and any other Facebook branded or co-branded websites (including sub-domains, international versions, widgets, and mobile versions); (b) our Platform; (c) social plugins such as the like button, the share button and other similar offerings and (d) other media, software (such as a toolbar), devices, or networks now existing or later developed.

 

  2. By “Platform” we mean a set of APIs and services that enable others, including application developers and website operators, to retrieve data from Facebook or provide data to us.

 

  3. By “information” we mean facts and other information about you, including actions you take.

 

  4. By “content” we mean anything you post on Facebook that would not be included in the definition of “information.”

 

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  5. By “data” we mean content and information that third parties can retrieve from Facebook or provide to Facebook through Platform.

 

  6. By “post” we mean post on Facebook or otherwise make available to us (such as by using an application).

 

  7. By “use” we mean use, copy, publicly perform or display, distribute, modify, translate, and create derivative works of.

 

  8. By “active registered user” we mean a user who has logged into Facebook at least once in the previous 30 days.

 

  9. By “application” we mean any application or website that uses or accesses Platform, as well as anything else that receives or has received data from us. If you no longer access Platform but have not deleted all data from us, the term application will apply until you delete the data.

 

  18. Other

 

  1. If you are a resident of or have your principal place of business in the US or Canada, this Statement is an agreement between you and Facebook, Inc. Otherwise, this Statement is an agreement between you and Facebook Ireland Limited. References to “us,” “we,” and “our” mean either Facebook, Inc. or Facebook Ireland Limited, as appropriate.

 

  2. This Statement makes up the entire agreement between the parties regarding Facebook, and supersedes any prior agreements.

 

  3. If any portion of this Statement is found to be unenforceable, the remaining portion will remain in full force and effect.

 

  4. If we fail to enforce any of this Statement, it will not be considered a waiver.

 

  5. Any amendment to or waiver of this Statement must be made in writing and signed by us.

 

  6. You will not transfer any of your rights or obligations under this Statement to anyone else without our consent.

 

  7. All of our rights and obligations under this Statement are freely assignable by us in connection with a merger, acquisition, or sale of assets, or by operation of law or otherwise.

 

  8. Nothing in this Statement shall prevent us from complying with the law.

 

  9. This Statement does not confer any third party beneficiary rights.

 

  10. You will comply with all applicable laws when using or accessing Facebook.

You may also want to review the following documents:

 

   

Privacy Policy : The Privacy Policy is designed to help you understand how we collect and use information.

 

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Payment Terms : These additional terms apply to all payments made on or through Facebook.

 

   

Platform Page : This page helps you better understand what happens when you add a third-party application or use Facebook Connect, including how they may access and use your data.

 

   

Facebook Platform Policies : These guidelines outline the policies that apply to applications, including Connect sites.

 

   

Advertising Guidelines : These guidelines outline the policies that apply to advertisements placed on Facebook.

 

   

Promotions Guidelines : These guidelines outline the policies that apply if you have obtained written pre-approval from us to offer contests, sweepstakes, and other types of promotions on Facebook.

 

   

How to Report Claims of Intellectual Property Infringement

 

   

How to Appeal Claims of Copyright Infringement

 

   

Pages Terms

Facebook © 2010 • English (US)

 

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EXHIBIT 10.16

FACEBOOK INC.

CONVERSION AGREEMENT

This Conversion Agreement (this “ Agreement ”), is made as of February 19, 2010 by and among Facebook, Inc., a Delaware corporation (the “ Company ”), Digital Sky Technologies Limited, a limited liability company incorporated under the laws of the British Virgin Islands (“ DST ”), and DST Global Limited, a limited liability company incorporated under the laws of the British Virgin Islands (“ DSTG ”).

R E C I T A L S

WHEREAS, DST and DSTG together hold approximately 8.2% of the Company’s outstanding capital stock.

WHEREAS, pursuant to that certain Letter Agreement Regarding Certain Agreements between the Company and DST, dated May 26, 2009 (the “ Side Letter Agreement ”), which Side Letter Agreement shall be amended on or about the date hereof, DST is subject to certain limitations on the percentage of the Company’s outstanding capital stock that DST and its affiliates (as such term is defined under the Securities Exchange Act of 1934, as amended (the “ 1934 Act ”)) can acquire (defined in the Side Letter Agreement as the “Standstill Threshold”).

WHEREAS, DST and DSTG are currently contemplating the purchase of shares of the Company’s Class B Common Stock pursuant to those certain Stock Transfer Agreements by and among each of DST and DSTG, respectively, Eduardo Saverin and the Company, to be entered into on or about the date hereof (together, the “ Saverin Agreement ”), and such purchase would result in DST and DSTG, together, exceeding the Standstill Threshold, absent the Company’s waiver of the Standstill Threshold.

WHEREAS, DST and DSTG desire to induce the Company to waive the Standstill Threshold and consent to DST’s and DSTG’s purchase of the Shares (as defined in the Saverin Agreement) pursuant to the Saverin Agreement by making certain agreements as set forth herein.

NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the adequacy and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Election to Convert . Pursuant to Article IV(B), Section 4(a) of the Company’s Tenth Amended and Restated Certificate of Incorporation, as amended from time to time (the “ Charter ”), immediately prior to its conversion of Class B Common Stock into Class A Common Stock as set forth below, DSTG provides to the Company notice of and hereby elects to convert 338,400 shares of the Company’s Series A Preferred Stock, represented by the stock certificate set forth on Schedule A hereto (the “ Preferred Certificate ”), into shares of the Company’s Class B Common Stock to be issued in the name of DSTG. Immediately following the Series A Preferred Stock conversion described in the first sentence of this section and pursuant to Article IV(D), Section 5(a) of the Charter (the “ Optional Conversion


Provision ”), DST and DSTG each provide to the Company notice of and hereby elect to convert, in the aggregate, 7,250,000 shares of the Company’s Class B Common Stock, represented by the stock certificates identified on Schedule A hereto (collectively with the Preferred Certificate, the “ Certificates ”), into shares of the Company’s Class A Common Stock to be issued in the names of DST and DSTG, respectively, as set forth on Schedule A . DST and DSTG are hereby deemed to deliver to the Company the Certificates representing the shares to be so converted pursuant to Article IV(B), Section 4(a) of the Charter and the Optional Conversion Provision, all in accordance with this Section 1.

2. Agreement to Convert . Reference is made to (a) that certain Holder Voting Agreement by and among the Company, DST and Mark Zuckerberg, dated as of May 26, 2009, as may be amended from time to time (the “ DST Voting Agreement ”) and (b) that certain Holder Voting Agreement by and among the Company, DSTG and Mark Zuckerberg, dated as of September 25, 2009, as may be amended from time to time (the “ DSTG Voting Agreement ”). In the event that either the DST Voting Agreement or the DSTG Voting Agreement is terminated pursuant to either Section 7.1(d) or Section 7.1(e) thereof (each a “ Termination Event ”), DST and DSTG hereby agree that this Agreement shall constitute notice to the Company that contingent upon and effective as of such Termination Event all shares of the Company’s Class B Common Stock held at the time of such Termination Event by DST, DSTG and/or any of their respective affiliates shall automatically (without any further action on the part of DST, DSTG and/or any of their respective affiliates) convert into shares of the Company’s Class A Common Stock pursuant to the Optional Conversion Provision. In addition, upon such Termination Event, DST, DSTG and/or any of their respective affiliates shall promptly deliver to the Company the stock certificates representing all shares of the Company’s Class B Common Stock to be converted pursuant to the Optional Conversion Provision in accordance with this Section 2.

3. Termination of Certain Obligations . Reference is made to the Series E Preferred Stock Purchase Agreement by and among the Company and the investors listed on Exhibit A thereto, dated as of May 16, 2009 (the “ Series E SPA ”). Pursuant to Section 6.11 of the Series E SPA, the Company and DST (which holds all of the Class B Common Stock issuable upon conversion of the Stock, as defined in the Series E SPA) hereby terminate Section 6.18 (Assignment/Waiver of Right of First Refusal) of the Series E SPA.

4. Agreement Not to Purchase . Following the Company’s IPO (as defined below), DST and DSTG agree that none of DST, DSTG or any of their respective affiliates will in any manner, directly or indirectly, either alone or together with one or more third parties, acquire or offer or agree to acquire, directly or indirectly, by purchase or otherwise, any shares of the Company’s capital stock that have been outstanding for six months or less; provided , however , that the restriction set forth in this Section 4 shall not be applicable to shares acquired by DST, DSTG or any of their respective affiliates directly from the Company or through open market transactions on a nationally recognized securities exchange. For purposes of this Section 4, “IPO” shall mean the consummation of a firm commitment underwritten public offering by the Company of its securities in connection with which all of the outstanding shares of Preferred Stock are converted into shares of Class B Common Stock, pursuant to the Company’s certificate of incorporation.

 

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5. Agreement Not to Sell . Reference is made to the Fifth Amended and Restated Investors’ Rights Agreement by and among the Company, the holders of the Company’s Series A Preferred Stock listed on Exhibit A thereto, the holders of the Company’s Series B Preferred Stock listed on Exhibit B thereto, the holders of the Company’s Series C Preferred Stock listed on Exhibit C thereto, the holders of the Company’s Series D Preferred Stock listed on Exhibit D thereto, the holders of the Company’s Series E Preferred Stock listed on Exhibit E thereto, and the other holders of the Company’s capital stock set forth on Exhibit F thereto, dated as of November 20, 2009 (the “ Rights Agreement ”) . Notwithstanding the restrictions set forth in Section 2.14(a) of the Rights Agreement, DST and DSTG hereby agree that in connection with the initial public offering of the Company’s securities and upon request of the Company or the underwriters managing such offering of the Company’s securities, DST, DSTG and/or any of their respective affiliates will not sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the Company, however or whenever acquired (other than those included in the registration), without the prior written consent of the Company or such underwriters, as the case may be, (a) in respect of such percentage of the combined aggregate interests of DST, DSTG and/or any of their respective affiliates held as of the effective date of such registration and (b) for such period from the effective date of such registration statement, all as set forth below:

 

Cumulative Percentage of Holdings For

Which Lock-Up Expires

   No. of Months Since Effective Date of
Registration Statement
  

50%

   6 months

75%

   12 months

100%

   18 months

Each of DST, DSTG and/or any of their respective affiliates further agrees to execute such agreements as may be reasonably requested by the underwriters of such registration statement that are consistent with this Section 5 (except for a difference in term) or that are necessary to give further effect thereto.

6. Stop-Transfer Instructions . DST and DSTG agree that, in order to ensure compliance with the restrictions imposed by this Agreement, the Company may issue appropriate “stop-transfer” instructions to its transfer agent, if any, and if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records. The Company will not be required (a) to transfer on its books any securities that have been sold or otherwise transferred in violation of any of the provisions of this Agreement or (b) to treat DST, DSTG, their affiliates or any purported transferee or assignee as owner of such securities, or to accord DST, DSTG, their affiliates or any purported transferee or assignee the right to vote or receive dividends in respect of such securities.

7. Specific Performance . Each party to this Agreement acknowledges and agrees that any breach by any of them of this Agreement may cause another party irreparable harm which may not be adequately compensable by money damages. Accordingly, in the event of a breach or threatened breach by a party of any provision of this Agreement, each other party shall be entitled to seek the remedies of specific performance, injunction or other preliminary or equitable relief, without having to prove irreparable harm or actual damages. The foregoing right shall be in addition to such other rights or remedies as may be available to any party for such breach or threatened breach, including but not limited to the recovery of money damages.

 

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8. Costs of Enforcement . If any party to this Agreement seeks to enforce its rights under this Agreement by legal proceedings, the non-prevailing party shall pay all costs and expenses incurred by the prevailing party, including, without limitation, all reasonable attorneys’ fees.

9. Amendment and Waiver . No amendment, modification, termination or cancellation of this Agreement shall be effective unless it is in writing signed by the Company, DST and DSTG. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

10. Successors and Assigns; Assignment . Except as otherwise provided in this Agreement, the rights and obligations of the parties under this Agreement will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives.

11. Entire Agreement . This Agreement together with the Side Letter Agreement, any amendments thereto and the Saverin Agreement, constitute the full and entire understanding and agreement among the parties regarding the subject matter hereof and thereof and supersede and cancel all prior agreements, negotiations, correspondence, undertakings and communications of the parties, oral or written, respecting such subject matter.

12. Severability . In case any one or more of the provisions contained in this Agreement is for any reason held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, and such invalid, illegal or unenforceable provision shall be reformed and construed so that it will be valid, legal and enforceable to the maximum extent permitted by law.

13. Notices . Any and all notices required or permitted to be given to a party pursuant to the provisions of this Agreement will be in writing and will be effective and deemed to provide such party sufficient notice under this Agreement on the earliest of the following: (a) at the time of personal delivery, if delivery is in person; (b) one (1) business day after deposit with an express overnight courier for United States deliveries, or two (2) business days after such deposit for deliveries outside of the United States; or (c) three (3) business days after deposit in the United States mail by certified mail (return receipt requested) for United States deliveries. All notices for delivery outside the United States will be sent by express courier. All notices not delivered personally will be sent with postage and/or other charges prepaid and properly addressed to the party to be notified at the address set forth below the signature lines of this Agreement or at such other address as such other party may designate by one of the indicated means of notice herein to the other party hereto. A “business day” shall be a day, other than Saturday or Sunday, when the banks in the cities of San Francisco, California and Moscow, Russian Federation are open for business.

 

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14. Further Assurances . The parties agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Agreement.

15. Titles and Headings . The titles, captions and headings of this Agreement are included for ease of reference only and will be disregarded in interpreting or construing this Agreement. Unless otherwise specifically stated, all references herein to “sections” and “exhibits” will mean “sections” and “exhibits” to this Agreement.

16. Miscellaneous . This Agreement shall be governed, construed and interpreted in accordance with the laws of the State of California, without giving effect to principles of conflicts of law. The parties (x) irrevocably and unconditionally submit to the jurisdiction of the federal or state courts located in the Northern District of California for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (y) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the federal or state courts located in the Northern District of California, and (z) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the suit, action or proceeding is brought in an inconvenient forum, that the venue of the suit, action or proceeding is improper or that this Agreement or the subject matter hereof may not be enforced in or by such court. This Agreement may be executed in one or more counterparts, which shall together constitute one agreement.

17. Authorized Agent . DST and DSTG hereby appoint CT Corporation System, located at 818 West Seventh Street, Suite 200, Los Angeles, CA 90017 (the “ Authorized Agent ”), upon whom process may be served in any suit, action or proceeding arising out of or relating to this Agreement and the transactions contemplated hereby. Service of process upon the Authorized Agent shall be deemed, in every respect, effective service of process upon DST and/or DSTG pursuant to this Agreement.

[Signature Pages Follow]

 

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The parties hereto have executed this Agreement as of the date first written above.

 

COMPANY:

FACEBOOK, INC.
By:  

/s/ Mark Zuckerberg

  Mark Zuckerberg, Chief Executive Officer
Address :
1601 S. California Ave.
Palo Alto, CA 94404

SIGNATURE PAGE TO CONVERSION AGREEMENT


The parties hereto have executed this Agreement as of the date first written above.

 

Digital Sky Technologies Limited
By:  

/s/ Michael Gray

Name:   Michael Gray
Title:   Director
DST Global Limited
By:  

/s/ Sean Hogan

Name:   Sean Hogan
Title:   Director

SIGNATURE PAGE TO CONVERSION AGREEMENT


SCHEDULE A

Certificates

[See attached.]


Schedule A to Conversion Agreement – Certificates

 

Name of Stockholder

   Date of
Issuance
   Certificate
Number
   Number
of
Shares
   Number of
Shares to be
Converted
(into
Class B
Common)
   Balance of
Series A
Preferred
Stock
 

DST Global Limited

   11/24/2009    PA-14    4,622,496    388,400      4,284,096   

Name of Stockholder

   Date of
Issuance
   Certificate
Number
   Number
of
Shares
   Number of
Shares to be
Converted
(into
Class A
Common)
   Balance of
Class B
Common
Stock
 

Digital Sky Technologies

   8/19/2009    CS-923    6,770,473    220,155      6,550,318   

Digital Sky Technologies

   8/31/2009    CS-1,029    40,000    40,000      —     

Digital Sky Technologies

   9/21/2009    CS-1,052    5,000    5,000      —     

DST Global Limited

   9/28/2009    CS-1,056    2,066,832    2,066,832      —     

DST Global Limited

   9/28/2009    CS-1,062    1,070,000    1,070,000      —     

DST Global Limited

   9/30/2009    CS-1,064    700,000    700,000      —     

DST Global Limited

   10/16/2009    CS-1,073    30,000    30,000      —     

DST Global Limited

   10/19/2009    CS-1,074    5,000    5,000      —     

DST Global Limited

   10/19/2009    CS-1,076    70,000    70,000      —     

DST Global Limited

   10/16/2009    CS-1,077    20,000    20,000   

DST Global Limited

   10/16/2009    CS-1,079    10,000    10,000      —     

DST Global Limited

   10/16/2009    CS-1,081    14,259    14,259      —     

DST Global Limited

   10/16/2009    CS-1,083    25,000    25,000      —     

DST Global Limited

   10/16/2009    CS-1,085    20,000    20,000      —     

DST Global Limited

   10/16/2009    CS-1,087    5,000    5,000      —     

DST Global Limited

   10/16/2009    CS-1,089    110,000    110,000      —     

DST Global Limited

   10/16/2009    CS-1,090    136,000    136,000      —     

DST Global Limited

   10/16/2009    CS-1,092    68,428    68,428      —     

DST Global Limited

   10/30/2009    CS-1,109    6,000    6,000      —     

DST Global Limited

   10/30/2009    CS-1,111    100,000    100,000      —     

DST Global Limited

   10/30/2009    CS-1,112    75,000    75,000      —     

DST Global Limited

   10/30/2009    CS-1,113    20,000    20,000      —     

DST Global Limited

   10/30/2009    CS-1,114    10,000    10,000      —     

DST Global Limited

   11/2/2009    CS-1,115    70,092    70,092      —     

DST Global Limited

   11/2/2009    CS-1,116    76,234    76,234      —     

DST Global Limited

   11/2/2009    CS-1,117    70,092    70,092      —     

DST Global Limited

   11/2/2009    CS-1,118    58,000    58,000      —     

DST Global Limited

   11/2/2009    CS-1,119    50,313    50,313      —     

DST Global Limited

   11/2/2009    CS-1,120    34,500    34,500      —     

DST Global Limited

   11/20/2009    CS-1,131    30,000    30,000      —     

DST Global Limited

   11/20/2009    CS-1,133    5,000    5,000      —     

DST Global Limited

   11/20/2009    CS-1,135    20,000    20,000      —     

DST Global Limited

   11/20/2009    CS-1,137    170,000    170,000      —     

DST Global Limited

   11/20/2009    CS-1,139    35,000    35,000      —     

DST Global Limited

   11/20/2009    CS-1,140    60,566    60,566      —     

DST Global Limited

   12/15/2009    CS-1,153    40,000    40,000      —     

DST Global Limited

   12/18/2009    CS-1,183    375,958    375,958      —     

DST Global Limited

   12/18/2009    CS-1,185    42,482    42,482      —     

DST Global Limited

   12/18/2009    CS-1,197    350,000    350,000      —     

DST Global Limited

   12/21/2009    CS-1,187    50,000    50,000      —     

DST Global Limited

   12/21/2009    CS-1,195    60,000    60,000      —     

DST Global Limited

   12/21/2009    CS-1,199    50,689    50,689      —     

DST Global Limited

   12/31/2009    CS--1,229    350,000    350,000      —     

DST Global Limited

   12/31/2009    CS-1,232    6,000    6,000      —     

DST Global Limited

   11/13/2009    CS-1,234    60,000    60,000      —     

DST Global Limited

   1/5/2010    CS-1,237    20,000    20,000      —     

DST Global Limited

   2/19/2010    CS-1,297    338,400    338,400      —     

Total Class B Common Stock to be Converted by DSTG

         6,984,845      

Total Class B Common Stock to be Converted by DST

         265,155      

Total Class B Common Stock to be Converted

         7,250,000      

EXHIBIT 21.1

SUBSIDIARIES OF FACEBOOK, INC.

Facebook Ireland Limited (Ireland)

Vitesse, LLC (Delaware)