Document:

Exhibit
10.23

 

DEMAND
MEDIA, INC.

 

AMENDED AND
RESTATED 2006 EQUITY INCENTIVE PLAN

 

STOCK
OPTION AGREEMENT

 

Demand Media, Inc. (the “Company”),  pursuant to the Amended and
Restated Demand Media, Inc. 2006 Equity Incentive Plan (as such plan may be
amended and/or restated, the “Plan”), hereby grants to Optionee listed
below (“Optionee”), an option to purchase the number of
shares of the Company’s Common Stock (“Shares”)
set forth below, subject to the terms and conditions of the Plan and
this Stock Option Agreement. Unless otherwise defined herein, the terms defined
in the Plan shall have the same defined meanings in this Stock Option
Agreement.

 

I.              NOTICE OF STOCK OPTION GRANT

 

	
  Optionee:

  	
   

  	
  Michael Blend

  
	
   

  	
   

  	
   

  
	
  Date of Stock Option Agreement:

  	
   

  	
  June     , 2009

  
	
   

  	
   

  	
   

  
	
  Date of Grant:

  	
   

  	
  June 9, 2009

  
	
   

  	
   

  	
   

  
	
  Vesting Commencement Date:

  	
   

  	
  April 1, 2009

  
	
   

  	
   

  	
   

  
	
  Exercise Price per Share:

  	
   

  	
  $4.75

  
	
   

  	
   

  	
   

  
	
  Total Number of Shares Granted:

  	
   

  	
  150,000 Shares

  
	
   

  	
   

  	
   

  
	
  Total Exercise Price:

  	
   

  	
  $712,500

  
	
   

  	
   

  	
   

  
	
  Term/Expiration Date:

  	
   

  	
  June 8, 2019

  
	
   

  	
   

  	
   

  
	
  Type of Option:

  	
   

  	
  o  Incentive Stock Option

  	
   

  	
  x
  Non-Qualified Stock Option

  
					

 

Vesting Schedule:               This Option
shall vest and become exercisable one-forty-eighth (1/48th) of the Shares subject hereto on each monthly
anniversary of the Vesting Commencement Date, subject to Optionee’s continued
status as a Service Provider through each such vesting date, such that all
Shares subject to this Option shall be vested and exercisable (subject to
Optionee’s continued status as a Service Provider) as of the fourth anniversary
of the Vesting Commencement Date, provided,
however, that if a Change of Control shall occur prior to
termination of Optionee’s status as a Service Provider and either (x) Optionee
remains a Service Provider through the three hundred and eightieth (380th) day following the Change
of Control or (y) Optionee’s employment is terminated by the Company without
Cause prior to the three hundred and eightieth (380th) day following the of the Change of Control, then
the Option shall vest in full and become exercisable with respect to all Shares
subject hereto (to the extent not already vested and exercisable) on the first
to occur of the three hundred and eightieth (380th) day following the of the Change of Control or
termination of Optionee’s employment by the Company without Cause following
consummation of a Change of Control and, provided,
further, that if Optionee’s employment with the Company is
terminated by the Company without Cause upon consummation of or within 90 days
prior to the occurrence of a Change of Control and such termination was at the
request of a third party that has taken steps reasonably calculated to effect a
Change of Control or such termination otherwise arose in connection with a
Change of

 

 

Control, as determined in the reasonable discretion of the
Administrator, then the Option shall vest in full and become exercisable with
respect to all Shares subject hereto upon the consummation of such Change of
Control.

 

Termination Period: Following a termination of
Optionee’s status as a Service Provider, the Option shall remain outstanding
and exercisable (to the extent vested) for a period of thirty (30) days
following such termination, provided that
(i) if Optionee’s employment with the Company is terminated without Cause prior
to both a Change of Control and the fourth anniversary of the Vesting
Commencement Date, the Option shall remain outstanding, eligible to vest in
accordance with the last proviso in the Vesting Schedule above, and exercisable
(to the extent vested) for a period of one hundred twenty (120) days following
such termination, (ii) if Optionee’s status as a Service Provider is terminated
for Cause at any time, the Option shall terminate and be forfeited in full as
of the start of business on the date of Optionee’s termination, without regard
to the Option’s vested status, or (iii) if Optionee’s status as a Service
Provider is terminated due to Optionee’s death or total and permanent
disability (within the meaning of Section 22(3)(3) of the Code) at any time,
the Option shall remain outstanding and exercisable (to the extent vested) for
a period of six months following such termination (and, in the case of Optionee’s
death, shall be exercisable by Optionee’s estate or by a person who acquires
the right to exercise the Option by bequest or inheritance).

 

Notwithstanding the foregoing, (x) except as expressly provided in the
Vesting Schedule above with respect to a Change of Control following a
termination of Optionee’s employment without Cause, in no event shall any
portion of the Option vest following termination of Optionee’s status as a
Service Provider, and (y) in no event shall any portion of the Option be
exercisable after the Term/Expiration Date stated above.

 

II.            AGREEMENT

 

1.            Grant of Option. The Company hereby grants to Optionee
an Option to purchase the number of Shares set forth in the Notice of Grant, at
the exercise price per Share set forth in the Notice of Grant (the “Exercise Price”).  Notwithstanding
anything to the contrary anywhere else in this Stock Option Agreement, the
Option is subject to the terms, definitions and provisions of the Plan adopted
by the Company, which is incorporated herein by reference.

 

If designated in the Notice of Grant as an Incentive
Stock Option, this Option is intended to qualify as an Incentive Stock Option
as defined in Section 422 of the Code; provided,
however, that to the extent that the aggregate Fair Market Value of
stock with respect to which Incentive Stock Options (within the meaning of Code
Section 422, but without regard to Code Section 422(d)), including the Option,
are exercisable for the first time by Optionee during any calendar year,
exceeds $100,000, such options shall be treated as not qualifying under Code
Section 422, but rather shall be treated as Non-Qualified Stock Options to the
extent required by Code Section 422. The rule set forth in the preceding
sentence shall be applied by taking options into account in the order in which
they were granted. For purposes of these rules, the Fair Market Value of stock
shall be determined as of the time the option with respect to such stock is
granted.

 

2

 

2.             Exercise of Option. This Option is exercisable as
follows:

 

(a)           Right
to Exercise.

 

(i)                This Option shall be exercisable cumulatively
according to the Vesting Schedule set forth in the Notice of Grant. For
purposes of this Stock Option Agreement, Shares subject to this Option shall
vest based on Optionee’s continued status as a Service Provider, except as
otherwise expressly provided in the Vesting Schedule set forth in the Notice of
Grant.

 

(ii)               This Option may not be exercised for a fraction of a
Share.

 

(iii)              In the event of Optionee’s death, disability or other
termination of Optionee’s status as a Service Provider, the exercisability of
the Option is governed by Section 7 below and the Termination Provisions set
forth in the Notice of Grant.

 

(iv)             In no event may this Option be exercised after the date
of expiration of the term of this Option as set forth in the Notice of Grant.

 

(b)           Method
of Exercise. This Option shall be exercisable by written Notice (substantially
in the form attached as Exhibit A). The Notice must state the number of
Shares for which the Option is being exercised, and such other representations
and agreements with respect to such Shares as may be required by the Company
pursuant to the provisions of the Plan. The Notice must be signed by Optionee
and shall be delivered in person or by certified mail to the Secretary of the
Company. The Notice must be accompanied by payment of the Exercise Price plus
payment of any applicable withholding tax. This Option shall be deemed to be
exercised upon receipt by the Company of such written Notice accompanied by the
Exercise Price and payment of any applicable withholding tax. No Shares shall
be issued pursuant to the exercise of an Option unless such issuance and such
exercise comply with all relevant provisions of law and the requirements of any
stock exchange upon which the Shares may then be listed. 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.

 

3.             Optionee’s Representations. If the Shares
purchasable pursuant to the exercise of this Option have not been registered
under the Securities Act or any applicable state laws at the time this Option
is exercised, Optionee shall, if required by the Company, concurrently with the
exercise of all or any portion of this Option, deliver to the Company his or
her Investment Representation Statement in the form attached hereto as Exhibit
B and shall make such other written representations as are deemed necessary
or appropriate by the Company and/or its counsel.

 

4.             Lock-Up Period. Optionee hereby agrees that, if
so requested by the Company or any representative of the underwriters (the “Managing Underwriter”) in
connection with any registration of the offering of any securities of the
Company under the Securities Act or any applicable state laws, Optionee shall
not sell or otherwise transfer any Shares or other securities of the Company
during the 180-day period (or such longer period as may be requested in writing
by the
Managing Underwriter and agreed to in writing by the Company)
(the “Market Standoff Period”) following
the effective date of a registration statement of the Company filed under the
Securities Act; provided, however, that
such restriction shall apply only to the first registration

 

3

 

statement of the Company to become effective
under the Securities Act that includes securities to be sold on behalf of the
Company to the public in an underwritten public offering under the Securities
Act. The Company may impose stop-transfer instructions with respect to
securities subject to the foregoing restrictions until the end of such Market
Standoff Period and these restrictions shall be binding on any transferee of
such Shares.

 

5.             Method
of Payment. Payment of the Exercise Price shall be by any of the following,
or a combination thereof, at the election of Optionee:

 

(a)           cash;

 

(b)           check; or

 

(c)           with the consent of the Administrator,

 

(i)               a full recourse promissory note bearing interest (at
no less than such rate as is a market rate of interest and which then precludes
the imputation of interest under the Code), payable upon such terms as may be
prescribed by the Administrator and structured to comply with Applicable Laws;

 

(ii)              surrender of other Shares owned by Optionee which have
a Fair Market Value on the date of surrender equal to the Exercise Price of the
Shares as to which the Option is being exercised;

 

(iii)             surrendered Shares then issuable upon the exercise of
the Option having a Fair Market Value on the date of exercise equal to the
aggregate Exercise Price of the Option or exercised portion thereof;

 

(iv)             property of any kind which constitutes good and valuable
consideration;

 

(v)             delivery of a notice that Optionee has placed a market
sell order with a broker with respect to Shares then issuable upon exercise of
the Option and that the broker has been directed to pay a sufficient portion of
the net proceeds of the sale to the Company in satisfaction of the aggregate
Exercise Price; provided, however, that
payment of such proceeds is then made to the Company upon settlement of such
sale; or

 

(vi)            any combination of the foregoing methods of payment.

 

6.             Restrictions
on Exercise. If the issuance of Shares upon such exercise or if the method
of payment for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, then the Option may not
be exercised. The Company may require Optionee to make any representation and
warranty to the Company as may be required by any applicable law or regulation
before allowing the Option to be exercised.

 

7.             Termination
of Relationship. If Optionee ceases to be a Service Provider, the exercisability
of the Option following termination of Optionee’s status as a Service Provider
shall be governed by the Termination Period provisions set forth in the Notice
of Grant. To the

 

4

 

extent that the Option is not vested as of the date on which Optionee’s
status as a Service Provider terminates (except as otherwise expressly provided
in the Termination Period provisions set forth in the Notice of Grant), or if
Optionee does not exercise the Option within the time specified in the
Termination Period Provisions set forth in the Notice of Grant, the Option
shall terminate.

 

8.               Non-Transferability of Option. This Option may
not be transferred in any manner except by will or by the laws of descent or
distribution. It may be exercised during the lifetime of Optionee only by
Optionee. The terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of Optionee.

 

9.               Term of Option. This Option may be exercised
only within the term set forth in the Notice of Grant.

 

10.             Restrictions on Shares. Optionee hereby agrees
that Shares purchased upon the exercise of the Option shall be subject to such
terms and conditions as the Administrator shall determine in its sole
discretion, including, without limitation, restrictions on the transferability
of Shares, the right of the Company to repurchase Shares, the right of the
Company to require that Shares be transferred in the event of certain
transactions, a right of first refusal in favor of the Company with respect to
permitted transfers of Shares, tag-along rights and take-along rights. Such
terms and conditions may, in the Administrator’s sole discretion, be contained
in the Exercise Notice with respect to the Option or in such other agreement as
the Administrator shall determine and which Optionee hereby agrees to enter
into at the request of the Company.

 

11.             Code Section 409A. Without limiting the
generality of any other provision of this Agreement, Section 23 of the Plan
pertaining to Code Section 409A is hereby explicitly incorporated into this
Agreement.

 

12.             No Right to Employment. Nothing in the Plan or in
this Stock Option Agreement shall confer upon Optionee any right to serve or
continue as an Employee, Director or Consultant of the Company or any Parent or
Subsidiary, or shall interfere with or restrict in any way the rights of the
Company or any Parent or Subsidiary, which are hereby expressly reserved, to
discharge Optionee at any time for any reason whatsoever, with or without
Cause, except to the extent expressly provided otherwise in a written
employment agreement between Optionee and the Company or any Parent or
Subsidiary.

 

(Signature Page Follows)

 

5

 

This Stock Option Agreement
may be executed in two or more counterparts, each of which shall be deemed an
original and all of which shall constitute one document.

 

 

	
   

  	
  DEMAND MEDIA, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Richard Rosenblatt

  
	
   

  	
  Name:

  	
  Richard Rosenblatt

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  

 

OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF
SHARES PURSUANT TO THE OPTION HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE
PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING
GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS STOCK OPTION AGREEMENT, NOR IN THE
COMPANY’S 2006 EQUITY INCENTIVE PLAN WHICH IS INCORPORATED HEREIN BY REFERENCE,
SHALL CONFER UPON OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION AS A SERVICE
PROVIDER OF THE COMPANY OR ANY PARENT OR SUBSIDIARY, NOR SHALL IT INTERFERE IN
ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S
SERVICE PROVIDER RELATIONSHIP AT ANY TIME, WITH OR WITHOUT CAUSE AND WITH OR
WITHOUT PRIOR NOTICE.

 

Optionee acknowledges receipt of a copy of the Plan
and represents that he or she is familiar with the terms and provisions
thereof. Optionee hereby accepts this Option subject to all of the terms and
provisions hereof. Optionee has reviewed the Plan and this Option in their
entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Option.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Administrator upon any questions arising under the
Plan or this Option. Optionee further agrees to notify the Company upon any
change in the residence address indicated below.

 

	
  Dated:

  	
  26 June 2009

  	
   

  	
   

  	
  By:

  	
  /s/ Michael Blend

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Michael Blend

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Address:

  	
  26 Arcadia Terrace

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Santa Monica, CA 90401

  

 

6

 

 

EXHIBIT A

 

DEMAND MEDIA, INC.

 

AMENDED AND RESTATED 2006 EQUITY
INCENTIVE PLAN

 

EXERCISE NOTICE

 

Demand
Media, Inc.

Attention:
Legal Department

 

1.                                       Exercise of
Option.  Effective as of today,
                      ,
                              ,
the undersigned (“Optionee”) hereby elects to exercise Optionee’s option
to purchase
                  
shares of the Common Stock (the “Shares”) of Demand Media, Inc.
(the “Company”) under and pursuant to the Amended and Restated Demand
Media, Inc. 2006 Equity Incentive Plan (as such plan may be amended and/or
restated, the “Plan”) and the Stock Option Agreement dated
                                        
(the “Option Agreement”). 
Capitalized terms used herein without definition shall have the meanings
given in the Option Agreement.

 

	
   

  	
  Date
  of Grant:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Number
  of Shares as to which Option is Exercised:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Exercise
  Price per Share:

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Total
  Exercise Price:

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Certificate
  to be issued in name of:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Cash
  Payment delivered herewith:

  	
  o

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Promissory
  note delivered herewith:

  	
  o

  	
  $

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Type
  of Option:

  	
  o  Incentive Stock Option

  	
  o  Non-Qualified Stock Option

  	
   

  	
   

  
							

 

2.                                       Representations
of Optionee.  Optionee
acknowledges that Optionee has received, read and understood the Plan and the
Option Agreement.  Optionee agrees to
abide by and be bound by their terms and conditions.

 

3.                                       Rights as
Stockholder.  Until the
stock certificate evidencing such Shares is issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other
rights as a stockholder shall exist with respect to Shares subject to the
Option, notwithstanding the exercise of the Option.  The Company shall issue (or cause to be
issued) such stock certificate promptly after the Option is exercised.  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 14 of the Plan.  Optionee shall enjoy rights as a stockholder
until such time as Optionee disposes of the Shares or the Company and/or its
assignee(s) exercises the Right of First Refusal, the Call 

 

A-1

 

Right or the Take-Along Right hereunder (each as
defined below).  Upon such exercise,
Optionee shall have no further rights as a holder of the Shares so purchased
except the right to receive payment for the Shares so purchased in accordance
with the provisions of this Exercise Notice, and Optionee shall forthwith cause
the certificate(s) evidencing the Shares so purchased to be surrendered to
the Company for transfer or cancellation.

 

4.                                       Company’s Right
of First Refusal. Before any Shares held by Optionee (including, for
purposes of Sections 4, 5 and 6 hereof, any permitted transferee holding
Shares) may be sold, pledged, assigned, hypothecated, transferred, or otherwise
disposed of (including transfer by gift or operation of law) (collectively, “Transfer”
or “Transferred”), 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 4 (the “Right of First Refusal”).

 

(a)                                  Notice
of Proposed Transfer.  Optionee
shall deliver to the Company a written notice (the “Notice”)
stating:  (i)  Optionee’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 bona fide cash price or other consideration for which
Optionee proposes to Transfer the Shares (the “Offered Price”), and
Optionee shall offer the Shares at the Offered Price to the Company or its assignee(s).

 

(b)                                 Exercise
of Right of First Refusal.  Within thirty
(30) days after receipt of the Notice, the Company and/or its assignee(s) may
elect in writing to purchase all, but not less than all, of the Shares proposed
to be Transferred to any one or more of the Proposed Transferees.  The purchase price will be determined in
accordance with subsection (c) below.

 

(c)                                  Purchase
Price.  The purchase price (the “ROFR
Purchase Price”) for the Shares repurchased under this Section 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.

 

(d)                                 Payment.  Payment of the ROFR 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 of Optionee to
the Company (or, in the case of repurchase by an assignee, to the assignee), 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.

 

(e)                                  Optionee’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, then  Optionee
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 one hundred twenty (120) 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 (i) the provisions hereof, including without
limitation the provisions of Sections 4, 5 and 6 hereof, shall continue to
apply to the Shares in the hands of such Proposed Transferee and (ii) that
such Proposed Transferee will not transfer the Shares any other purchaser or
transferee unless such 

 

A-2

 

future purchase or transferee agrees in writing to
be bound by the provisions hereof, including without limitation the provisions
of Sections 4, 5 and 6 hereof.  If the
Shares described in the Notice are not Transferred to the Proposed Transferee
within such period, 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 as
provided herein before any Shares held by the Holder may be sold or otherwise
Transferred.

 

(f)                                    Exception
for Certain Family Transfers.  Anything to the contrary contained in this Section 4
notwithstanding, the Transfer of any or all of the Shares during Optionee’s
lifetime or on Optionee’s death by will or intestacy to Optionee’s Immediate
Family or a trust for the benefit of Optionee’s Immediate Family shall be
exempt from the Right of First Refusal. 
As used herein, “Immediate Family” shall mean spouse, lineal
descendant or antecedent, father, mother, brother or sister or stepchild
(whether or not adopted).  In such case,
the transferee or other recipient shall receive and hold the Shares so
Transferred subject to the provisions hereof, including without limitation the
provisions of Sections 4, 5 and 6 hereof, and there shall be no further
Transfer of such Shares except in accordance with the terms hereof.

 

(g)                                 Termination
of Right of First Refusal.  The
Right of First Refusal shall terminate as to all Shares upon the Public Trading
Date.

 

5.                                       Company Call
Right.

 

(a)                            Call
Right.  If Optionee ceases to be a
Service Provider for any reason, the Company shall have the right to purchase
from Optionee any or all of the Shares then owned by Optionee (and any or all
Shares acquired upon exercise of the Option after the date on which the
Optionee ceases to be a Service Provider) at a per Share price equal to the
Fair Market Value of a Share on the date on which the Optionee ceases to be a
Service Provider (the “Call Right”).

 

(b)                           Exercise
of Call Right.  The Company
may exercise the Call Right by delivering personally or by registered mail to
Optionee (or his transferee or legal representative, as the case may be),
within ninety (90) days after the date on which Optionee ceases to be a Service
Provider (or, in the case of Shares which are acquired after the date on which
Optionee ceases to be a Service Provider, then within ninety (90) days after
the date on which such Shares are acquired), a notice in writing indicating the
Company’s intention to exercise the Call Right and setting forth a date for
closing not later than thirty (30) days from the mailing of such notice.

 

(c)                            Payment.  Payment in respect of the Call Right 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 of the
Optionee to the Company, 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.

 

(d)                           Closing.  The closing shall take place at the Company’s
office.  At the closing, Optionee shall
deliver the stock certificate or certificates evidencing the Shares, and the
Company shall deliver the purchase price therefor.  At its option, the Company may elect to make
payment for the Shares at a bank selected by the Company.  The Company shall avail itself 

 

A-3

 

of this option by a notice in writing to Optionee
stating the name and address of the bank, date of closing, and waiving the closing
at the Company’s office.

 

(e)                            Termination
of Company Call Right.  If the
Company does not elect to exercise the Call Right conferred above by giving the
requisite notice within the time provided in Subsection (b) above, the
Call Right shall terminate.  The Call
Right shall terminate as to all Shares upon the Public Trading Date.

 

6.                                       Company
Take-Along Right.

 

(a)                                  Approved
Sale.  If the Board shall deliver a
notice to Optionee (a “Sale Event Notice”) stating that the Board has
approved a sale of all or a portion of the Company (an “Approved Sale”)
and specifying the name and address of the proposed parties to such transaction
and the consideration payable in connection therewith, Optionee shall
(i) consent to and raise no objections against the Approved Sale or the
process pursuant to which the Approved Sale was arranged, (ii) waive any
dissenter’s rights and other similar rights, and (iii) if the Approved
Sale is structured as a sale of securities, agree to sell Optionee’s Shares on
the terms and conditions of the Approved Sale which terms and conditions shall
treat all stockholders of the Company equally (on a pro rata basis), except
that shares having a liquidation preference may receive an amount of
consideration equal to such liquidation preference in addition to the
consideration being paid to the holders of shares not having a liquidation
preference.  Notwithstanding the
foregoing, the sale of the Shares in an Approved Sale shall be further subject
to the terms of the Plan, including without limitation Section 14 of the
Plan.  Optionee will take all necessary
and desirable lawful actions as directed by the Board and the stockholders of
the Company approving the Approved Sale in connection with the consummation of
any Approved Sale, including without limitation, the execution of such
agreements and such instruments and other actions reasonably necessary to (A) provide
the representations, warranties, indemnities, covenants, conditions,
non-compete agreements, escrow agreements and other provisions and agreements
relating to such Approved Sale and, (B) effectuate the allocation and
distribution of the aggregate consideration upon the Approved Sale, provided, that this Section 6 shall not require
Optionee to indemnify the purchaser in any Approved  Sale for breaches of the representations,
warranties or covenants of the Company or any other stockholder, except to the
extent (x) Optionee is not required to incur more than its pro rata share
of such indemnity obligation (based on the total consideration to be received
by all stockholders that are similarly situated and hold the same class or
series of capital stock) and (y) such indemnity obligation is provided for
and limited to a post-closing escrow or holdback arrangement of cash or stock
paid in connection with the Approved Sale.

 

(b)                                 Costs.  Optionee will bear Optionee’s  pro rata share
(based upon the amount of consideration to be received) of the reasonable costs
of any sale of Shares pursuant to an Approved Sale to the extent such costs are
incurred for the benefit of all selling stockholders of the Company and are not
otherwise paid by the Company or the acquiring party.  Costs incurred by Optionee on Optionee’s own
behalf will not be considered costs of the transaction hereunder.

 

(c)                                  Share
Delivery.  At the
consummation of the Approved Sale, Optionee shall, if applicable, deliver
certificates representing the Shares to be transferred, duly endorsed 

 

A-4

 

for transfer and accompanied by all requisite stock transfer taxes, if
any, and the Shares to be transferred shall be free and clear of any liens,
claims or encumbrances (other than restrictions imposed by this Agreement) and
Optionee shall so represent and warrant.

 

(d)                                 Termination
of Company Take-Along Right.   The Take-Along Right shall terminate as to
all Shares upon the Public Trading Date.

 

7.                                       Tax
Consultation.  Optionee
understands that Optionee may suffer adverse tax consequences as a result of
Optionee’s purchase or disposition of the Shares.  Optionee represents that Optionee has
consulted with any tax consultants Optionee deems advisable in connection with
the purchase or disposition of the Shares and that Optionee is not relying on
the Company for any tax advice.

 

8.                                       Lock-Up Period.  Optionee hereby agrees that if so requested
by the Company or any representative of the underwriters (the “Managing
Underwriter”) in connection with any registration of the offering of any
securities of the Company under the Securities Act or any applicable state
laws, Optionee shall not sell or otherwise transfer any Shares or other
securities of the Company during the 180-day period (or such longer period as
may be requested in writing by the Managing Underwriter and agreed to in
writing by the Company) (the “Market Standoff Period”) following the
effective date of a registration statement of the Company filed under the
Securities Act; provided,
that such restriction shall apply only to the first registration statement of
the Company to become effective under the Securities Act that includes
securities to be sold on behalf of the Company to the public in an underwritten
public offering under the Securities Act. 
The Company may impose stop-transfer instructions with respect to
securities subject to the foregoing restrictions until the end of such Market
Standoff Period.

 

9.                                       Restrictive
Legends and Stop-Transfer Orders.

 

(a)                                  Legends.  Optionee understands and agrees that the
Company shall cause the legends set forth below or legends substantially
equivalent thereto, to be placed upon any certificate(s) evidencing
ownership of the Shares together with any other legends that may be required by
state or federal securities laws:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER THE ACT AND SUCH LAWS OR, IN THE OPINION OF COUNSEL
IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES, SUCH
OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN COMPLIANCE THEREWITH.

 

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND RIGHT OF FIRST REFUSAL OPTIONS HELD BY THE 

 

A-5

 

ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE EXERCISE NOTICE
BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE
OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. 
SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON
TRANSFEREES OF THESE SHARES.

 

(b)                                 Stop-Transfer
Notices.  Optionee 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.

 

10.                                 Successors and
Assigns.  The Company may assign any of
its rights under this Agreement to single or multiple assignees, and this
Agreement shall inure to the benefit of the successors and assigns of the
Company.  Subject to the restrictions on
transfer herein set forth, this Agreement shall be binding upon Optionee and
his or her heirs, executors, administrators, successors and assigns.

 

11.                                 Interpretation.  Any dispute regarding the interpretation of
this Agreement shall be submitted by Optionee or by the Company forthwith to
the Administrator, which shall review such dispute at its next regular
meeting.  The resolution of such a
dispute by the Administrator shall be final and binding on the Company and on
Optionee.

 

12.                                 Governing Law;
Severability.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of California excluding that body of law pertaining to conflicts of
law.  Should any provision of this
Agreement be determined by a court of law to be illegal or unenforceable, the
other provisions shall nevertheless remain effective and shall remain
enforceable.

 

13.                                 Notices.  Any notice required or permitted hereunder
shall be given in writing and shall be deemed effectively given upon personal
delivery or upon deposit in the United States mail by certified mail, with
postage and fees prepaid, addressed to the other party at its address as shown
below beneath its signature, or to such other address as such party may
designate in writing from time to time to the other party.

 

14.                                 Further
Instruments.  The parties
agree to execute such further instruments and to take such further action as
may be reasonably necessary to carry out the purposes and intent of this
Agreement.

 

15.                                 Delivery of
Payment.  Optionee herewith delivers to
the Company the full Exercise Price for the Shares, as well as any applicable
withholding tax.

 

A-6

 

16.                                 Entire
Agreement.  The Plan
and Option Agreement are incorporated herein by reference.  This Agreement, the Plan, the Option
Agreement and the Investment Representation Statement constitute the entire
agreement of the parties and supersede in their entirety all prior undertakings
and agreements of the Company and Optionee with respect to the subject matter
hereof.

 

	
  Accepted
  by:

  	
   

  	
  Submitted
  by:

  
	
   

  	
   

  	
   

  
	
  DEMAND MEDIA, INC.

  	
   

  	
  OPTIONEE

  
	
   

  	
   

  	
   

  
	
  By:
  

  	
   

  	
   

  	
  By:
  

  	
   

  
	
  Name:
  

  	
   

  	
  Name:
  

  
	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
  Address: 

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Street

  
					

 

A-7

 

EXHIBIT B

 

INVESTMENT REPRESENTATION
STATEMENT

 

	
  OPTIONEE

  	
  :

  	
   

  
	
   

  	
   

  	
   

  
	
  COMPANY

  	
  :

  	
  Demand
  Media, Inc.

  
	
   

  	
   

  	
   

  
	
  SECURITY

  	
  :

  	
  Common
  Stock

  
	
   

  	
   

  	
   

  
	
  AMOUNT

  	
  :

  	
   

  
	
   

  	
   

  	
   

  
	
  DATE

  	
  :

  	
   

  

 

In connection with the purchase of the above-listed shares of Common
Stock (the “Securities”) of Demand
Media, Inc. (the “Company”),
the undersigned (the “Optionee”)
represents to the Company the following:

 

(a)                                  Optionee 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 Securities.  Optionee is acquiring these Securities for
investment for Optionee’s 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 of 1933, as amended (the “Securities
Act”).

 

(b)                                 Optionee
acknowledges and understands that the Securities constitute “restricted
securities” under the Securities Act and have not been registered under the
Securities Act in reliance upon a specific exemption therefrom, which exemption
depends upon, among other things, the bona fide nature of Optionee’s investment
intent as expressed herein.  Optionee
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.  Optionee
further acknowledges and understands that the Company is under no obligation to
register the Securities.  Optionee
understands that the certificate 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
satisfactory to the Company and any other legend required under applicable state
securities laws.

 

(c)                                  Optionee is
familiar with the provisions of Rule 701 and Rule 144, each
promulgated under the Securities Act, which, in substance, permit limited
public resale of “restricted securities” acquired, directly or indirectly from
the issuer thereof, in a non-public offering subject to the satisfaction of
certain conditions.  Rule 701
provides that if the issuer qualifies under Rule 701 at the time of the
grant of the Option to Optionee, the exercise will be exempt from registration
under the Securities Act.  In the event
the Company becomes subject to the reporting requirements of Section 13 or
15(d) of the Securities Exchange Act of 1934, ninety 

 

B-1

 

(90) days thereafter (or such longer period as any
market stand-off agreement may require) the Securities exempt under
Rule 701 may be resold, subject to the satisfaction of certain of the
conditions specified by Rule 144, including, in the case of an affiliate,
(i) the resale being made through a broker in an unsolicited “broker’s
transaction” or in transactions directly with a market maker (as said term
is defined under the Securities Exchange Act of 1934), (ii)  the
availability of certain public information about the Company, (iii) the
amount of Securities being sold during any three (3) month period not
exceeding the limitations specified in Rule 144(e), and (iv) the
timely filing of a Form 144, if applicable.

 

In
the event that the Company does not qualify under Rule 701 at the time of
grant of the Option, then the Securities may be resold beginning ninety (90)
days after the Company becomes subject to the reporting requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934 in certain
limited circumstances subject to the provisions of Rule 144, which
requires the resale to occur not less than six months  after the later of the date the Securities
were sold by the Company or the date the Securities were sold by an affiliate
of the Company, within the meaning of Rule 144 and the availability of
certain public information about the Company (subject to certain exceptions);
and, in the case of a sale of the Securities by an affiliate,  the satisfaction of the conditions set forth
in sections (i), (ii), (iii) and (iv) of the paragraph immediately
above.

 

(d)                                 Optionee
further understands that in the event all of the applicable requirements of
Rule 701 or 144 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 Rules 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.  Optionee
understands that no assurances can be given that any such other registration
exemption will be available in such event.

 

(e)                                  Optionee
understands and acknowledges that the Company will rely upon the accuracy and
truth of the foregoing representations and Optionee hereby consents to such
reliance.

 

	
   

  	
  Signature
  of Optionee:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:
                                                ,

  	
   

  

 

B-2Exhibit 10.24

 

Confidential treatment has
been requested for portions of this exhibit. The copy filed herewith omits
information subject to the confidentiality request. Omissions are designated as
[*****]. A complete version of this exhibit has been filed with the Securities
and Exchange Commission.

 

 

GOOGLE SERVICES AGREEMENT

 

COMPANY
INFORMATION

 

COMPANY:  DEMAND MEDIA, INC.

 

	
   

  	
   

  	
  Business Contact:

  	
   

  	
  Legal Contact:

  	
   

  	
  Technical Contact:

  
	
  Name:

  	
   

  	
  Mike
  Wann

  	
   

  	
  Rick
  Danis

  	
   

  	
  Mike
  Wann

  
	
  Title:

  	
   

  	
  SVP
  Business Development

  	
   

  	
  VP,
  Business & Legal Affairs

  	
   

  	
  SVP
  Business Development

  
	
  Address, City, State,

  Postal Code:

  	
   

  	
  1333
  Second Street, Suite 100

  Santa Monica, CA 90401

  	
   

  	
  15801
  NE 24th Street

  Bellevue, WA 98008

  	
   

  	
  1333
  Second Street, Suite 100

  Santa Monica, CA 90401

  
	
  Phone:

  	
   

  	
  310-917-6450

  	
   

  	
  425-974-4663

  	
   

  	
  310-917-6450

  
	
  Fax:

  	
   

  	
   

  	
   

  	
  425-974-4763

  	
   

  	
   

  
	
  Email:

  	
   

  	
  mike@demandmedia.com

  	
   

  	
  rick.danis@demandmedia.com

  	
   

  	
  mike@demandmedia.com

  

 

TERM

 

TERM: Starting on
June 1, 2010 (“Effective Date”)
and continuing through  May 31,
2012  (inclusive) (“Initial Term”).  Upon expiration of the Initial Term, the
agreement may renew for an additional one (1) year term with the parties
mutual written consent obtained at least 30 days prior to the end of the
Initial Term (“Optional Renewal Term”). 
(The “Initial Term” and “Optional Renewal Term” are collectively the
“Term”).

 

SEARCH
SERVICES

 

	
  x
  WEBSEARCH SERVICE (“WS”)

  	
   

  	
  Search Fees

  
	
   

  	
   

  	
   

  
	
  Sites approved for WS:

  [*****].com

  [*****].uk

  [*****].com

  [*****].com

  	
   

  	
  

  $[*****]/ [*****] Requests for [*****]

  
	
   

  	
   

  	
   

  
	
  x
  CUSTOM SEARCH ENGINE (“CSE”)

  	
   

  	
  Search Fees

  
	
   

  	
   

  	
   

  
	
  Sites approved for CSE:

  [*****].com

  [*****].uk

  [*****].com

  [*****].com

  	
   

  	
  

  $[*****]/[*****] Requests for [*****]

  

  $[*****]/[*****] Requests for [*****]

  
				

 

Confidential material
redacted and filed separately with the Securities and Exchange Commission.

 

 

ADVERTISING
SERVICES

 

	
  x
  ADSENSE FOR SEARCH (“AFS”)

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sites approved for AFS:

  [*****].com, [*****].com, [*****].com, [*****].com, [*****].com, [*****].uk

  	
   

  	
  

  See Exhibit A

  	
   

  	
  
 [*****] %

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  x ADSENSE FOR CONTENT (“AFC”)

  	
   

  	
  [*****]

  	
   

  	
  [*****]

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Sites approved for AFC:

  [*****].com, [*****].com, [*****].com, [*****].com, [*****].com, [*****].uk

  	
   

  	
  

  See Exhibit B

  	
   

  	
  
 [*****]%

  

 

Confidential material redacted and filed separately with the Securities
and Exchange Commission.

 

2

 

CURRENCY

 

	
  o AUD

  	
   

  	
  o JPY

  
	
  o CAD

  	
   

  	
  o KRW

  
	
  o EUR

  	
   

  	
  x USD

  
	
  o GBP

  	
   

  	
  o Other

  

 

Confidential material
redacted and filed separately with the Securities and Exchange Commission.

 

3

 

This
Google Services Agreement (“Agreement”) is
entered into by Google Inc. (“Google”)
and Demand Media, Inc. (“Company”) and
is effective as of the Effective Date.

 

For
avoidance of doubt, the AFC, AFS, WS and CSE (which was included via amendment
on January 1, 2009) services covered under the Order Form between the
parties dated May 1, 2008 are now covered under this Agreement and are no
longer covered under the Google Services Agreement dated November 1, 2006.

 

1.     Definitions.  In this
Agreement:

 

1.1.  “Ad”
means an individual advertisement provided through the applicable Advertising
Service.

 

1.2.  “Ad Deduction”
means, for each of the Advertising Services, for any period during the Term,
the Deduction Percentage (listed on the front pages of this Agreement) of
Ad Revenues.

 

1.3.  “Ad Revenues” means, for each of the
Advertising Services, for any period during the Term, revenues that are
recognized by Google and attributed to Ads in that period.

 

1.4.  “Ad Set”
means a set of one or more Ads.

 

1.5.  “Advertising
Services” means the advertising services selected on the front pages of
this Agreement.

 

1.6.  “AFC RPM”
means AFC Ad Revenues [*****].

 

1.7.  “Affiliate”
of a party means any corporate entity
that directly or indirectly controls, is controlled by or is under common
control with that party.

 

1.8.  “Brand Features” means each party’s trade
names, trademarks, logos and other distinctive brand features.

 

1.9.  “Company
Content” means any content served to
End Users that is not provided by Google.

 

1.10.            “Confidential
Information” means information disclosed by (or on behalf of) one
party to the other party under this Agreement that is marked as confidential or
would normally be considered confidential under the circumstances in which it
is presented.  It does not include information that the recipient already
knew, that becomes public through no fault of the recipient, that was
independently developed by the recipient, or that was lawfully given to the
recipient by a third party.

 

1.11.            “CSE Branding
Guidelines” means the brand treatment guidelines applicable to CSE
and located at the following URL: http://google.com/coop/docs/cse/branding.html
(or a different URL Google may provide to Company from time to time).

 

1.12.            “End Users”
means individual human end users of a Site.

 

1.13.            “Google
Branding Guidelines” means the brand treatment guidelines applicable
to the Services and located at the following
URL: http://www.google.com/wssynd/02brand.html (or a different URL
Google may provide to Company from time to time).

 

1.14.            “Google
Program Guidelines” means the policy and implementation guidelines
applicable to the Services and as provided by Google to Company from time to
time.

 

Confidential material
redacted and filed separately with the Securities and Exchange Commission.

 

4

 

1.15.            “Intellectual Property Rights” means all copyrights, moral
rights, patent rights, trade marks, rights in or relating to Confidential
Information and any other intellectual property or similar rights (registered
or unregistered) throughout the world.

 

1.16.            [*****].

 

1.17.            “Net Ad Revenues” means, for each of the Advertising Services,
for any period during the Term, Ad Revenues for that period minus the Ad
Deduction for that period.

 

1.18.            [*****].

 

1.19.            “Results”
means [*****],[*****],[*****] or [*****].

 

1.20.            “Results Page”
means any Site page which contains any Results.

 

1.21.            “Request”
means a request [*****].

 

1.22.            “Search Box”
means a search box [*****].

 

1.23.            “Search Query”
means a text query [*****].

 

1.24.            [*****].

 

1.25.            [*****].

 

1.26.            “Search
Services” means the search services selected on the front pages of
this Agreement.

 

1.27.            “Services”
means the Advertising Services and/or Search Services (as applicable).

 

1.28.            “Site(s)”
means:

 

(a)       the Web site(s) located
at the URL(s) listed on the front pages of this Agreement, together
with the additional URL(s) approved by Google from time to time under
subsection 6.3(a) below.

 

2.     Launch, Implementation
and Maintenance of Services.

 

2.1.  Launch.
The parties acknowledge launch of the AFS, AFC, and WS and CSE Services
as of the Effective Date. In the event that any additional Services are
implemented under this Agreement, Company will not launch its implementation of
such Services [*****], until Google has approved the implementation in writing,
[*****].

 

2.2.  Implementation and Maintenance

 

(a)       For the remainder of the
Term, subject to Sections 6.3, Google will make available and Company will
implement and maintain each of the Services on each of the Sites.

 

(b)       Company will ensure that
Company:

 

(i)        [*****] in
relation to each page, [*****], on which the Services are implemented; and

 

(ii)       [*****] on each of those
pages.

 

Confidential material
redacted and filed separately with the Securities and Exchange Commission.

 

5

 

(c)       Company will ensure that the
Services are implemented and maintained in accordance with:

 

(i)        the applicable
Google Branding Guidelines;

 

(ii)       the applicable Google
Program Guidelines;

 

(iii)      the CSE
Branding Guidelines;

 

(iv)      the mock ups and
specifications for the Services included in the exhibits to this Agreement
[*****];

 

(v)       Google technical protocols
(if any) and any other technical requirements and specifications applicable to
the Services that are provided to Company by Google from time to time.

 

(d)       Company will ensure that
every [*****] generates a [*****] containing that [*****].

 

(e)       Google will, upon receiving
a [*****] sent in compliance with this Agreement, provide [*****] when
available.  Company will then [*****] the
applicable Site.

 

(f)        Authorizations.  Company is responsible for
any inquiries from third parties listed in or having rights to [*****].

 

(g)       Company will ensure that at
all times during the applicable Term, Company 
has a clearly labeled and easily accessible privacy policy in place
relating to the Site(s) and that this privacy policy:

 

(i)            clearly discloses to End
Users that [*****];  and

 

(ii)           includes information about
End Users’ options for cookie management.

 

2.3  [*****].

 

(a)   [*****].

 

(b)   [*****].

 

(c)   [*****].

 

3.     Policy and Compliance Obligations.

 

3.1       Policy Obligations.  Company will not, and will not [*****] allow
any third party to:

 

(a)       modify, obscure or prevent
the display of all, or any part of, any Results;

 

(b)       edit, filter, truncate,
append terms to or otherwise modify any Search Query;

 

(c)       [*****];

 

(d)       display any Results in
pop-ups, pop-unders, exit windows, expanding buttons, animation or other
similar methods;

 

(e)       interfere with the display
of or frame any Results Page or any page accessed by clicking on any
Results;

 

Confidential material
redacted and filed separately with the Securities and Exchange Commission.

 

6

 

(f)        display any
content between any Results and any page accessed by clicking on those
Results or place any interstitial content immediately before any Results Page containing
any Results;

 

(g)       [*****];

 

(h)       directly or indirectly, (i) offer
incentives to End Users to generate Requests or clicks on Results, (ii) fraudulently
generate Requests or clicks on Results or (iii) [*****];

 

(i)        “crawl”, “spider”,
index or in any non-transitory manner store or cache information obtained from the
Services (including Results); and

 

(j)        display on any
Site, any content that violates [*****].

 

(k)       Compliance Obligations.  Company will not knowingly
or negligently allow any use of or access to the Services through any Site
which is not in compliance with the terms of this Agreement.  Company will use commercially reasonable
efforts to monitor for any such access or use and will, if any such access or
use is detected, take all reasonable steps requested by Google to disable this
access or use.  If Company is not in
compliance with this Agreement at any time, Google may, with notice to Company,
suspend provision of all (or any part of) the applicable Services until Company
implements adequate corrective modifications as reasonably required and determined
by Google.

 

4.     [*****].

 

(a)           [*****].

 

5.     Third Party Advertisements.  If Google is providing AFS to Company for any
Site(s), Company will request at least [*****] and will display the AFS
Ads on the applicable Results Pages [*****].

 

6.     Changes and Modifications.

 

6.1.  By
Google.  If Google modifies
the Google Branding Guidelines, Google Program Guidelines, the Google technical
protocols or the CSE Branding Guidelines and the modification requires action
by Company, Company will take the
necessary action [*****].

 

6.2.  By Company

 

(a)       Company
will provide Google [*****]
notice of any change [*****]
that could reasonably be expected to affect the delivery or display of any [*****].

 

6.3.  Site List
Changes

 

(a)       Company
may notify Google from time to time that it wishes to add or remove URL(s) to
those comprising the Site(s) by sending notice to Google [*****].

 

(b)       If
there is a change in control of any Site [*****]:

 

(i)            Company
will provide notice to Google at least 30 days before the change; and

 

(ii)           unless
the entire Agreement is assigned to the third party controlling the Site in
compliance with Section 15.3 below, from the date of that change in
control of the Site, that Site will be treated as removed from this
Agreement.  Company will ensure that from
that date, the Services are no longer implemented on that Site.

 

Confidential material
redacted and filed separately with the Securities and Exchange Commission.

 

7

 

7.             Intellectual Property.

 

Except to the extent expressly stated otherwise in
this Agreement, neither party will acquire any right, title or interest in any
Intellectual Property Rights belonging to the other party, or to the other
party’s licensors.

 

8.             Brand Features; [*****]

 

8.1.  Google grants  to Company a
non-exclusive and non-sublicensable license during the Term to use the Google
Brand Features solely to fulfill Company’s obligations in connection with the
Services in accordance with this Agreement and the Google Branding
Guidelines.  Google may revoke this
license at any time upon notice to Company. 
Any goodwill resulting from the use by Company of the Google Brand
Features will belong to Google.

 

8.2.  Google may include Company’s Brand Features in
customer lists.  Google will provide Company
with a sample of this usage if requested by Company.  [*****].

 

8.3.  Company grants to Google a
limited, nonexclusive license to use, copy, modify, distribute and display
[*****].  This license may be sublicensed
by Google to [*****] as a part of services delivered by Google to such Google
Affiliates and syndication partners. 
This Agreement does not grant Company any rights to any content used in
connection with the [*****].  Company
must own or have the right to use and provide the [*****].  Nothing in this Agreement will restrict
Google from using data Google obtains from a source other than Company.  Except for the license granted under this Section 8.3,
Company retains any right, title and interest [*****].  In addition, Company retains all rights to
[*****], to the extent not otherwise licensed or transferred to Google pursuant
to other agreements, [*****].

 

9.     Payment.

 

9.1.  Search
Services

 

(a)       Google will, unless it has
notified Company otherwise, [*****] payable by Company under this Agreement
[*****].

 

(b)       Even if the [*****] under
subsection 9.1(a), Google will [*****] Company for [*****] after the [*****]
are rendered.  [*****], Company will pay
the invoice amount, if any, to Google within [*****] of the date of invoice;
[*****].

 

(c)       [*****].

 

9.2.  Advertising
Services

 

(a)       For each applicable [*****],
Google will pay Company an amount equal to [*****].  This payment will be made in the month
following the calendar month in which [*****].

 

(b)       Google’s payments [*****]
will be based on Google’s accounting [*****].

 

9.3.  All
Services

 

(a)       As between Google and
Company, Google is responsible for all taxes (if any) associated with the
transactions between Google and advertisers in connection with Ads displayed on
the Sites.  Company is responsible for
all taxes (if any) associated with the Services, other than taxes based on
Google’s net income.  All payments to
Company from Google in relation to the Services will be treated as inclusive of
tax (if applicable) and will not be adjusted. 
If Google is obligated to 

 

Confidential
material redacted and filed separately with the Securities and Exchange
Commission.

 

8

 

withhold
any taxes from its payments to Company, Google will notify Company of this and will
make the payments net of the withheld amounts. 
Google will provide Company with original or certified copies of tax
payments (or other sufficient evidence of tax payments) if any of these
payments are made by Google.

 

(b)       All payments due to Google or
to Company will be in the currency specified in this Agreement and made by
electronic transfer to the account notified to the paying party by the other
party for that purpose.  The party
receiving payment will be responsible for any bank charges assessed by the
recipient’s bank.

 

(c)           In addition to other rights
and remedies Google may have, Google may [*****] between Company and Google.
Google may.

 

9.4.  Accounting.

 

[*****]
during the Services Term, Google will make available to Company a [*****] from
a [*****] covering the [*****] mechanisms [*****] under this Agreement.  Company may request [*****] no more than
[*****].

 

10.      Warranties; Disclaimers.

 

10.1.            Warranties.  Each party warrants that (a) it has full
power and authority to enter into this Agreement; and (b) entering into or
performing under this Agreement will not violate any agreement it has with a
third party.

 

10.2.            Disclaimers.  Except as expressly provided
for herein and to the maximum extent permitted by applicable law, NEITHER PARTY
MAKES ANY WARRANTY OF ANY KIND, WHETHER IMPLIED, STATUTORY, OR OTHERWISE AND
DISCLAIMS, WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR USE, AND NONINFRINGEMENT.

 

11.      Indemnification.

 

11.1.            By
Company.  Company will
indemnify, defend, and hold harmless Google from and against all liabilities,
damages, and costs (including settlement costs) arising out of [*****].

 

11.2.            By
Google.  Google will indemnify,
defend, and hold harmless Company from and against all liabilities, damages, and
costs (including settlement costs) arising out of [*****]. For purposes of
clarity, Google will not have any obligations or liability under this Section 11
arising from [*****].

 

11.3.            General.  The party seeking indemnification will
promptly notify the other party of the claim and cooperate with the other party
in defending the claim.  The indemnifying
party has full control and authority over the defense, except that (a) any
settlement requiring the party seeking indemnification to admit liability or to
pay any money will require that party’s prior written consent, such consent not
to be unreasonably withheld or delayed, and (b) the other party may join
in the defense with its own counsel at its own expense.  [*****].

 

Confidential
material redacted and filed separately with the Securities and Exchange
Commission.

 

9

 

12.      Limitation of Liability.

 

12.1.            Limitation

 

(a)       NEITHER PARTY WILL BE LIABLE
UNDER THIS AGREEMENT FOR LOST REVENUES OR INDIRECT, SPECIAL, INCIDENTAL,
CONSEQUENTIAL, EXEMPLARY, OR PUNITIVE DAMAGES, EVEN IF THE PARTY KNEW OR SHOULD
HAVE KNOWN THAT SUCH DAMAGES WERE POSSIBLE AND EVEN IF DIRECT DAMAGES DO NOT
SATISFY A REMEDY.

 

(b)       NEITHER PARTY MAY BE
HELD LIABLE UNDER THIS AGREEMENT FOR [*****].

 

(c)       THE LIMITATIONS SET FORTH IN
THIS SECTION 12.1 SHALL NOT APPLY TO ANY UNDISPUTED AMOUNTS DUE UNDER THIS
AGREEMENT FROM ONE PARTY TO THE OTHER PARTY.

 

12.2.            Exceptions
to Limitations.  These limitations of liability do not apply
to Company’s breach of Section 4, breaches of confidentiality obligations
contained in this Agreement, [*****], or indemnification obligations contained
in this Agreement.

 

13.      Confidentiality; PR.

 

13.1.            Confidentiality.  The recipient of any Confidential Information
will not disclose that Confidential Information, except to Affiliates,
employees, and/or agents who need to know it and who have agreed in writing to
keep it confidential.  The recipient will
ensure that those people and entities use Confidential Information only to
exercise rights and fulfill obligations under this Agreement and keep the
Confidential Information confidential.  The recipient may also disclose
Confidential Information when required by law after giving the discloser
reasonable notice and the opportunity to seek confidential treatment, a
protective order or similar remedies or relief prior to disclosure.

 

13.2.            [*****].

 

[*****].

 

13.3.            PR.  Neither party will issue any public statement
regarding this Agreement without the other party’s prior written approval,
except that (i) Google may reference Company as an Adsense customer in a
press release and reference and incorporate Partner’s Brand Features and screen
shots into other Google marketing materials (e.g., website, presentation
materials, brochures) with Company’s prior written approval (except that use
within customer lists do not require prior approval as described in Section 8.2);
and (ii) either party may make public disclosures as required by any
securities exchange rules.

 

14.      Term and Termination.

 

14.1.            Term &
Optional Renewal Term.  The
term of this Agreement, which may include an Optional Renewal term pursuant to
the parties mutual written consent, is the Term stated on the front pages of
this Agreement, unless earlier terminated as provided in this Agreement.

 

14.2.            Termination.

 

(a)       Either party may terminate
this Agreement with notice if the other party is in material breach of this
Agreement:

 

(i)            where the breach is
incapable of remedy;

 

Confidential material
redacted and filed separately with the Securities and Exchange Commission.

 

10

 

(ii)           where the breach is capable
of remedy and the party in breach fails to remedy that breach within 30 days
after receiving notice from the other party; or

 

(iii)          more than twice even if the
previous breaches were remedied.

 

(b)       Google may, with 30 days
prior notice to Company, remove or require Company to remove [*****] from any
Site or set of pages on a Site on which the [*****]. Google may, at its
sole discretion, after [*****] from the Effective Date, remove [*****] if the
[*****] from such site for the prior [*****]. For purposes of clarity, once
[*****] is removed from a Site, it is no longer considered [*****] under this
Agreement and is no longer subject to the terms of this Agreement.

 

(c)       Google reserves the right to
suspend or terminate Company’s use of any Services that are alleged or
reasonably believed by Google to infringe or violate a third party right;
[*****].  If any suspension of a Service
under this subsection 14.2(c) continues for more than [*****], Company may
immediately terminate this Agreement upon notice to Google.

 

(d)       Upon the expiration or
termination of this Agreement for any reason:

 

(i)            all rights and licenses
granted by each party will cease immediately; and

 

(ii)           if requested, each party
will use commercially reasonable efforts to promptly return to the other party,
or destroy and certify the destruction of, all Confidential Information
disclosed to it by the other party.

 

15.      Miscellaneous.

 

15.1.           Compliance
with Laws.  Each party
will comply with all applicable laws, rules, and regulations in fulfilling its
obligations under this Agreement.

 

15.2.           Notices.  All notices will be in writing and addressed
to the attention of the other party’s Legal Department and primary point of
contact.  Notice will be deemed given (a) when verified by written
receipt if sent by personal courier, overnight courier, or mail; or (b) when
verified by automated receipt or electronic logs if sent by facsimile or email.

 

15.3.           Assignment.  Neither party may assign or transfer any part
of this Agreement without the written consent of the other party, except to an
Affiliate but only if (a) the assignee agrees in writing to be bound by
the terms of this Agreement and (b) the assigning party remains liable for
obligations under this Agreement.  Any other attempt to transfer or assign
is void.

 

15.4.           Change of Control.  Upon the occurrence of a change of control
(each, a “Change of Control Event”), the party experiencing the Change of
Control Event will provide notice to the other party promptly, but no later
than 3 days, after the occurrence of the Change of Control Event.  The other party may terminate this Agreement
by sending notice to the party experiencing the Change of Control Event and the
termination will be effective upon the earlier of delivery of the termination
notice or 3 days after the occurrence of the Change of Control Event.  For purposes of this Agreement, “Change of
Control Event” means (a) the sale of all or substantially all of the
assets of a party to another person or entity (other than to a subsidiary of
such party); (b) any merger or consolidation of a party into or with
another corporation or entity in which holders of the capital stock of such
party immediately prior to the consummation of the transaction hold, directly
or indirectly, immediately following the consummation of the transaction, less
than 50% of the capital stock in the surviving entity in such transaction; or (c) any
other acquisition [*****] by a third party not an Affiliate of the
acquired party or its stockholders (or group of third parties (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended) not an Affiliate of such party or its
stockholders) of a majority of such party’s outstanding voting power.

 

Confidential material
redacted and filed separately with the Securities and Exchange Commission.

 

11

 

15.5.           Governing
Law.  This Agreement is governed by
California law, excluding California’s choice of law rules.  FOR ANY
DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE PARTIES CONSENT TO
PERSONAL JURISDICTION IN, AND THE EXCLUSIVE VENUE OF, THE COURTS IN SANTA CLARA
COUNTY, CALIFORNIA.

 

15.6.           Equitable
Relief.  Nothing in this Agreement will
limit either party’s ability to seek equitable relief.

 

15.7.           Entire
Agreement; Amendments.  This
Agreement is the parties’ entire agreement relating to its subject and
supersedes any prior or contemporaneous agreements on that subject.  Any amendment must be in writing signed by
both parties and expressly state that it is amending this Agreement.

 

15.8.           No
Waiver.  Failure to enforce any
provision will not constitute a waiver.

 

15.9.           Severability.  If any provision of this Agreement is found
unenforceable, the balance of this Agreement will remain in full force and
effect.

 

15.10.         Survival.  The following sections of this Agreement will
survive any expiration or termination of this Agreement:   7 (Intellectual Property), [*****], 11
(Indemnification), 12 (Limitation of Liability), 13 (Confidentiality; PR) and
15 (Miscellaneous).

 

15.11.         Independent
Contractors.  The parties
are independent contractors and this Agreement does not create an agency,
partnership, or joint venture.

 

15.12.         No
Third Party Beneficiaries.  There are no third-party beneficiaries to
this Agreement.

 

15.13.         Force
Majeure.  Neither
party will be liable for inadequate performance to the extent caused by a
condition (for example, natural disaster, act of war or terrorism, riot, labor
condition, governmental action, and Internet disturbance) that was beyond the
party’s reasonable control.

 

15.14.         Counterparts.  The parties may execute this Agreement in
counterparts, including facsimile, PDF or other electronic copies, which taken
together will constitute one instrument.

 

Signed:

 

	
  Google

  	
   

  	
  Company

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Nikesh Arora

  	
   

  	
  By:

  	
  s/
  Charles Hilliard

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Print
  Name:

  	
  Nikesh
  Arora

  	
   

  	
  Print
  Name:

  	
  Charles Hilliard

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President, Global Sales and Business

  	
   

  	
   

  	
   

  
	
   

  	
  Development Google, Inc.

  	
   

  	
  Title:

  	
  President & CFO

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  05/28/2010

  	
   

  	
  Date:

  	
  05/28/2010

  

 

Confidential material redacted and filed separately with the Securities
and Exchange Commission.

 

12

 

EXHIBIT A

 

[*****]

 

[*****].

 

[*****].

 

[*****].

 

[*****].

 

[*****].

 

Notwithstanding
the foregoing, [*****] shall be as follows:

 

[*****].

 

[*****].

 

Confidential material redacted and filed separately with the Securities
and Exchange Commission.

 

13

 

EXHIBIT B

 

[*****]

 

[*****].

 

[*****].

 

[*****].

 

[*****].

 

[*****].

 

[*****].

 

[*****].

 

Notwithstanding
the foregoing, [*****] shall be as follows:

 

[*****].

 

[*****].

 

[*****]

 

Confidential material redacted and filed separately with the Securities
and Exchange Commission.

 

14

 

EXHIBIT C

 

[*****]

 

Confidential material
redacted and filed separately with the Securities and Exchange Commission.

 

15

 

EXHIBIT D

 

[*****]

 

Confidential material
redacted and filed separately with the Securities and Exchange Commission.

 

16

 

EXHIBIT E

 

[*****]

 

Confidential material
redacted and filed separately with the Securities and Exchange Commission.

 

17

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